The start of a new year offers a great opportunity to step back, look at your finances and see how things are going. There are a lot of really great questions to ask your financial advisor in this period to see how your investments are shaping up. While the new year is just an arbitrary date, it makes a nice clean break and gives us a chance to think about our finances in a new light. What are you financial goals for 2019? How can you make them realities? Let’s get into the top questions to ask your financial advisor today.
Top Questions to Ask Your Financial Advisor Today
How High are the Fees You’re Paying?
The new year is a great time to reexamine your investments and see how high the fees you’re paying are. After all, your advisor is here to help you. If their cost is higher than their usefulness, it’s time to think about getting a new financial advisor. What better time to examine these costs than at the start of the year? If the advisory fees are satisfactory, move on to the fund fees, transaction fees and account fees you’re paying.
It’s important to know where your money is going. You don’t want a ton of fees piling up and eating away at the money you’re trying to invest. If some products you’ve got in your portfolio aren’t winning you back enough money to merit their costs, it could be time to think about cutting them loose. Make sure your advisor knows this is a serious concern of yours!
How Much Risk Should You Be Taking?
The general rule of thumb is that the younger you are, the riskier and higher-return your investments should be. Then, as you grow older, your investments should be transferred more and more to safer, lower-return funds that won’t put you at risk of losing your nest egg.
Other considerations, like your income, your financial goals, your risk aversion and your comfort level can all affect this advice. Your financial advisor should have a good grasp on what kind of saving you prefer, and what type you would rather stay away from. Maybe your risky investments have been paying dividends, but the climate for them is shifting so you transfer to safer funds. Or, maybe your safe investments are moving too slowly to get you where you want to be in time for retirement, so you should diversify.
Whatever the case, the beginning of the year is a great time to examine your finances and your saving strategy. Maybe it’s time to shift into high gear and double down on your plan of attack. Or, maybe it’s better if you ease off the throttle and get more cozy with saving in slower increments. In either event, your financial advisor will have advice tailored to your situation.
What Employer-Sponsored Benefits Could You be Taking Advantage of?
Set aside a plan for how you can make the most of your employer-sponsored plans. If your employer offers plans like 401 (k) retirement matching, medical savings accounts and the like, these could be great ways to maximize your finances. Medical savings accounts offer a great way to save money for medical expenses without incurring the usual income taxes on your wages. Similarly, 401 (k) accounts offer a great way to let your money grow without being taxed at the usual rate.
If your employed offers any type of matching, make sure you’re hitting the maximum amount that you can afford. For instance, if they offer 6% matching, it’s in your best interest to put the full 6% into your savings if you can afford it. This matching plan is essentially free money for you when you go to retire, so you should absolutely be taking full advantage of it!
What Else Can You Get?
Make sure you have a good understanding of what your advisor’s firm offers you in terms of services. Most firms offer a robust suite of financial services, such as estate, banking or tax planning. If you’re leaving behind a sizable amount of money and assets when you go, you might be interested in making sure these are properly taken care of. Likewise, your taxes may be very complex due to your investments and holdings. These are things your advisory firm might be able to help you with!
Your advisor will surely be glad to help you discover which of their firm’s services you’d benefit from. You may even find some services you didn’t realize you needed help with!