A professional financial advisor is a perfect solution to all of your money problems, if you follow their guidance, anyway. In fact, after just a few meetings with a financial advisor, you can increase your savings tremendously. By revising your investments dramatically, you can receive the good advice on estate planning, insurance and so much more, saving you money you never knew you had.

Although this sounds easy, it can be difficult to find an advisor you can trust. In order to make sure you’re choosing the perfect company in Naples for all of your financial advising needs, here are some great questions to ask your potential advisor to learn if they are the perfect match for you.

Ask the Right Questions

dreamstime_xxl_38760705Personal Questions

  1. How old are you? Although asking the age of someone may be deemed rude, it’s important for someone who is in need of financial advising. Through their age, you’ll be able to learn if they’ve been through difficult economic times and if you are older, you may want a financial advisor who is younger than you so you know they’ll most likely outlive you.
  1. What’s your educational background? You’ll want a financial advisor who has the proper educational background, such as someone who is a Certified Financial Planner (CFP), a Registered Investor Advisor (RIA), someone who is a Certified Public Accountant (CPA) or has graduated with a Personal Financial Assistant (PFS) degree. These certifications and degree are what a certified advisor needs in order to be properly qualified to provide you the type of financial advice you need.
  1. How long have you been a financial advisor? As with any career, the experience is a worthy attribute, especially in the financial world. Involvement in a plunging market may provide potential advice to create the type of financial freedom you want. Not all financial advisors have a wealth of knowledge likes ours do in Naples.
  1. Do you accept fiduciary responsibility? Fiduciary responsibility is a legal term meaning the financial advisor you choose (or their company) has a fundamental obligation to provide you with suitable investment advice for your best interests, not theirs. This should be given to you in a written statement showing that they accept the responsibility.
  1. Have you or your financial company ever been sued or reported for legal actions? Every financial advisor and advising company must follow all rules and procedures by the Financial Planning Standards Council.
  1. What’s the largest, smallest and average portfolio you manage? There are some advisors who only take high-net-worth clients and some who only take average or low. You must learn if the financial advisor you have contacted is suitable for you, your income and your financial needs.
  1. Could you give me references of three clients? References are important when choosing a financial advisor. You’ll want to ask the references how working with them was, how they found the advisor and the length of time they worked together. It’s also recommended you learn what the advisor’s weak and strong points are, and whether or not they would advocate them to another person in need of financial guidance.


dreamstime_xxl_38760705_2Financial Firm Questions

  1. Describe your firm. Although this should be a question that’s asked to every financial advising company, it’s often forgotten. Take the time to get to know the financial firm you wish to use and ask the financial advisor to describe it. You’ll want to know how many associates work there if it’s a stand-alone firm or one that’s part of a larger company, the amount of money they control and who will be able to help you if your financial advisor isn’t available at the moment-in-time you need them.
  1. What services do you perform? There are plenty of financial services available to you, but it’s imperative you know the exact financial services your potential advisor can provide you. Can they help with estate planning, insurance, long-term-care advice and manage securities? This is all valuable information you need to know.
  1. Do you use other firms or professionals to assist you, such as an accountant, broker or estate attorney? If so, who are they? You’ll need and should want to know who the other individuals are who may be assisting you and your financial needs in the future. If there are other professionals/firms, be sure to ask them the same personal questions from above too.
  1. What investment firms do you use within your practice? There are many wonderful investment firms many financial practices use; some include Fidelity, Vanguard, Schwab and T. Rowe Price. Learn what investment firms are available to you by asking that important question.


Fees and Costs Questions

  1. Do you offer different levels of service, and how much do you charge for each? For most individuals, fee-only advisors are usually best. It’s crucial you learn how you will be charged for the services you wish to use and how much for each service. Doing so will help you when considering your investments and more.
  2. What are the fees for typical bond and stock funds? The answer to this question is important, especially if you’re interested in stocks and bonds. The fees are highly dependent on if the advisor takes commissions or not. Learn more of the details you need when you contact your potential financial advisor online today.


dreamstime_xxl_38760705_3Investment Questions

  1. Are there different investment pools or models that are dependent on my risk tolerance? With almost anything in life, the amount of risk relates to the decisions you make in a volatile market and the amount of money you’d be willing to lose if the market takes a turn for the worst. In order to learn what type of pool of model you fit, it’s crucial you ask that question.
  1. Why kind of allocation guidelines do you use? What would you allocate in my portfolio? As many readers may know, a younger person can employ a higher percentage of equities; however, the more equities, the higher the risk. Talk to our financial advisors to learn more about your allocation guidelines.
  1. Does your advisory firm count home equity as part of an allocation? This may be important to some, but not to all. It’s up to you to learn what’s important when deciding on a financial advisor. If this is something you’d like to learn more about, be sure you ask that question.
  1. As part of an allocation, do you use pensions, future social security payments or annuity payments? Financial advisors are prone to the classic classification of fixed-income assets as “investments.” Reach out to your financial advisor to learn detailed answers about allocations.
  1. Are there economic risks I should be aware of, and what are the investments you would recommend to help alleviate these risks? When you ask this question, there are a few different answers that are satisfactory; they include inflation, health, death and taxes.
  1. What different kinds of investments do you recommend? This is one to which you want to pay attention. A good response from a financial advisor would include real estate investment trusts, index funds, a portion of money markets and certificate of deposits. However, it’s crucial you stay cautious about the answer your advisor provides you. For example, if a financial advisor says they can do much better than the S&P 500 index concerning equities, they’re likely not telling the whole truth because very few in the industry have beat the index during a succession. To learn more about these common investments we recommend, contact our financial advisors online today.
  1. On a scale of one to 10, where one represents a pure buy-and-hold investor, and 10 represents a market-timer, where do you put your clients? A satisfactory answer is one through four. This is because anything five through 10 implies the financial advisor thinks they can predict the future and sometimes it’s timing.


dreamstime_xxl_38760705_4Planning Questions

  1. How often do you provide me with an up-to-date forecast and evaluate my situation? An answer you can be happy with is yearly.
  1. When planning a retirement forecast, does it include financial events, such as the death of a spouse and subsequent survivor benefits, real estate purchase or sale or other events that may pose a crucial financial change? To put it simply, the answer should include this. If it doesn’t, you can assume it’s not a very complete analysis.
  1. Is your financial planning model based on inflation assumptions and constant return or does it include effects of inflation and variable returns? This is a tough question to answer for a few different reasons. Neither will give you a perfect answer because inflation and constant returns in forecasts don’t include the effects of a retiree making a withdrawal during a down-market year. However, there are numerous amounts of statistics that provide models, and they even give success probability. To learn more about that, be sure you reach out to our financial advisor.
  1. When retirement planning, does your forecast account for taxes on interest, dividends, state and federal income tax and capital gains? All should be included, especially tax rates. If they aren’t included in the planning, again, it isn’t a very complete analysis.


Last Question

25. Why do you think you would be a good financial advisor to me? Before you ask this question, though, you’ll want to answer it yourself. What are you looking for in a financial advisor? What kinds of answers do you wish to hear when you ask the above questions? Consider all of the answers and what you want, then reach out to the professionals at Advanced Wealth Advisors to schedule a consultation with our advisory team.