Questions to Ask Your New Financial Advisor

If you are thinking about working with a financial advisor, you may be wondering how to find the right person to help you grow your financial health. Finding the right advisor is not as difficult as it may seem. This decision is not one to make in a rush, either. The most effective way to find an advisor that is able to meet your needs and give you the best guidance is to know what to ask your prospective financial advisor in advance.

What to Ask Your New Financial Advisor

Before you get swept away by big promises and confusing jargon, it is always a good idea to chat to your potential new financial advisor, either via email, phone or even in person. Speaking to the advisor is the best way to find out what they provide, beyond their advertised services. Some of the questions that will offer the most insight include the following:

What services do you provide clients?

Advisors provide a wide range of services that can range from retirement planning all the way to wills, business assurance, estate planning, medical aid, and investment planning. Depending on your specific needs, you may require help with a specific service or you may need general financial and business advice. Most financial advisory experts offer a broad selection of services that cater to the entire financial picture. If your prospective advisor understands investments but is not able to give you advice on retirement or taxes, they may not offer as much value as one who can advise on all areas of your finances.

What are your qualifications?

You should also ask about any certification or qualifications that your advisor has to ensure that they have the best possible training and experience within their field. Over and beyond certification, look for an advisor who has plenty of experience in helping clients with similar needs to yours. You could also find out how many clients the advisor takes on each year and find out if they operate within a market niche or instead cater to a diverse range of clients. Once you have a short list, it is even a good idea to do an online search just to make sure that there are no red flags in the form of open lawsuits or major complaints against the advisor.

How will we communicate about investments?

This is an important question. You don’t want to have to only ever hear from your advisor when you make contact. Instead, you want an advisor who is proactive, communicating regularly to let you know how your investments are faring. If anything else arises that may require decisions or changes on your part, you should not have to wait to find out more. The amount of communication between you and your advisor will vary according to your preferences and needs. You should touch base once a quarter, with a comprehensive annual meeting or phone call to plan for the financial year ahead. It is a good idea to establish a communication guideline upfront so that both parties understand expectations.

How will you measure my investment performance?

Another good question – this applies to all of your financial decisions. A good advisor will look beyond your individual investment fund performance and look at your overall portfolio performance. As important as return rates are, they are not the only measurement to consider. A diverse portfolio is ideal. Your advisor should be able to measure your performance over the long-term, helping you rebalance and adapt when you start to see a downturn in certain funds. Look out for any advisor who tries to throw all of your eggs into a single basket, investing in individual stocks. This can end up being disastrous.

Here at MJ Accounting, we work closely with Tyrone Morris from Momentum to give our clients the very best financial advising services in KwaZulu-Natal. Contact us today to find out more about working with our designated financial advisor in Durban and surrounds.