Topics You Should Discuss With Your Financial Advisor

After you have completed the sometimes overwhelming task of selecting a professional financial planner, you may have a great deal of questions about what topics you need to cover with your representative in order to maximize the benefits of his or her experience.

While financial planning is a hugely personal enterprise and those talking points may vary widely from customer to customer, there are some topics that every person should discuss with his or her financial advisor.

It is helpful to write down questions and concerns before your first visit with your professional financial planning advisor. Outline any areas where you would like additional information about the market or your individual options in a given financial program. Consider your family’s long-term financial goals and be open to new ways of achieving them.

The primary purpose of consulting with your financial advisor is to obtain knowledge about the field of finance that you perhaps could not have obtained on your own and to trust the judgment of your selected professional when it comes to your wealth management. Ultimately, what you discuss with your financial planning advisor is completely up to your discretion and your own unique reasons for seeking financial counsel.

Short-Term vs. Long-Term Goals

A good financial planner will begin by ascertaining your short-term and long-term financial goals. Be prepared to share your vision for your financial life for the next year, five years, 10 years and on. While you do not need to have every detail of your savings plan thought out before you arrive, it is helpful to write down any vital or nonnegotiable financial goals you may have for yourself and your family.

Be clear and open about why you sought professional financial counseling. For some people, the reasons are very specific, such as setting up college funds for their children or realizing the dream of homeownership sooner. For others, wealth management is a matter of big-picture financial health and the desire to accrue liquid assets. Have a general overview of what you would like to accomplish with your financial advisor before you ever meet with him or her.

It is helpful to establish family financial goals on paper beforehand and then have your wealth management professional tune them up to optimal service with his or her expertise in the field. Be willing and able to discuss specific strategies for attaining your financial goals, not just idealized statements of what you would like them to be.

Be prepared to take difficult advice from your financial advisor that may at first seem intrusive or unwelcome in the changes it represents from what you are accustomed to doing. Remember that this is precisely what you have hired this person for, to plan and organize your budgetary life in ways that you have not been able to do on your own, and roll with those suggested changes trusting that your overall financial health will improve because of them.

Your Money Habits

The spending and saving of money is one of the most personal and sensitive subject matters you can discuss with a stranger. This can make initial talks with your chosen financial planning representative somewhat uncomfortable if you are not accustomed to being completely open and honest with another person about your finances and the way you handle your money.

It is vital to come to meetings with your financial planning advisor with paperwork in hand. You need account statements and any pre-existing budget plans you have been following. It is the job of your financial planner to analyze your spending and saving habits. You will need to disclose income from all sources and be ready to take advice about changes regarding how you have previously been utilizing that money. Learn more about how to talk to a financial advisor.

Many people believe that “savings” simply means gathering a large sum of money and leaving it in the bank. This model is no longer viable, as interest rates at banks are simply not high enough for you to see any return on your savings. There are other more viable ways of using this money. Therefore, you should listen to and accept the commentary your financial planning advisor will offer you about the changes you should make.

Remember not to take advice as personal criticism and that it is the role of your advisor to help you curb bad spending habits or lackluster saving patterns.

Insurance Coverage

All forms of insurance coverage fall into the bracket of your financial well-being and may come into play in conversations with your financial planning advisor. Life insurance in particular is a subject you should be discussing with your advisor. You need to outline beneficiaries and proxies not just in the event of your death but also in the possibility of disability or long-term illness.

Your financial planning representative can help you figure out if you have enough life insurance coverage, how much disability and long-term care coverage you may need to purchase and ways to get better health care coverage for your dependents. Life insurance is also currently being touted as one of the safest investments for the roughly 25 percent of your total investment portfolio that financial advisors recommend you keep outside of stocks.

Many financial planning firms and wealth management institutions are directly affiliated with life insurance providers and can help you get set up with discounted accounts pertaining to the coverage you may need. Be open to the idea of purchasing coverage you might not have initially thought was necessary. Remember that financial planning, in the big picture, is all about maintenance and foresight.


Your Personal Risk Adversity

One of the most personal factors in financial planning is determining your tolerance for risk. Where do you want your money invested? How much of it do you want invested in any given place? These are questions you need to fully explore with your financial planning advisor before determining stock market wealth management options for your family.

Secured options such as a 403(b) investment account may be the more comfortable option if you are closer to retirement age and not keen to take much financial risk with your nest egg. If you are younger, single or just more tolerant of risk in general, riding the market can produce great windfalls, which can in turn be invested in annuities or bonds for a safer, more stable return.

The most important word with regard to your investment portfolio is diversification. Speak to your financial planning advisor about exchange-traded funds (ETF), which are essentially a number of investments that allow for different asset classes and investments on as broad or narrow a scale as the investor is comfortable with. You can enjoy special tax advantages by investing in items such as municipal bonds and maintain a high level of peace of mind that your money is going to withstand any turns the market may take.

Emergency Savings

Do not be surprised if your financial planner quotes you a minimum figure for your emergency savings that is twice or more what you thought you needed. It is the job of the financial advisor to think as conservatively as possible with regard to the use of your money, and these advisors are tasked with seeing that you are financially covered in the event of an unforeseen event such as job loss or a sudden health problem.

Conventional wisdom dictates that having between three and six months’ worth of your entire budget stashed away in emergency savings and that the structured savings plans offered through employment are enough for a rainy day. By contrast, most good financial advisors will insist that you stockpile a solid year’s worth of full expenses in your savings. Do not balk at the initial tightening of your belt that this may require. Think of your emergency savings as an investment in your family’s continued security and stability no matter what the economic climate.

Options such as a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account may be suggested as supplements to the 401(k) or Roth accounts you may already possess through your employer. Remember that with something as potentially life-altering as savings, it is always better to err on the side of caution and frugality.


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