You may have known what you wanted to discover and what you expected from your first meeting with a financial advisor, but what happens in subsequent meetings? Once you have shared your goals, described your financial situation, divulged your thoughts about risk, heard your financial advisor’s recommendations, and entrusted your money to your advisor’s care, how do you stay current with your financial plan, making sure that you and your advisor are on the same page and working toward the same end? Whether you meet with your advisor semi-annually, annually, or on your own desired, periodic frequency, you probably want your meetings to be fruitful and productive as you also seek to build a deeper relationship and understanding with them. Here are 6 questions and topics which you should consider covering at your scheduled meeting with your financial advisor if you desire to successfully attain your financial goals.
1. What Is My Current Financial Situation?
Your advisor should update you on your investments and your overall financial picture, reviewing your asset allocation, exposure to risk, account performance, and progress toward achieving your personal financial goals and objectives. You should also discuss how your account balances have changed, your debt load, your net worth, the degree to which you are exposed to volatility (i.e. risk), and an estimate of the likelihood that you will be able to live out the financial dreams that you have with your current asset base and investment strategy. Your advisor should communicate the review of your accounts and the status of your financial plan in a manner that is easy for you to understand and comprehend. Do not hesitate to ask questions if something your advisor says does not make sense or if it is not communicated as clearly as you would like.
2. Am I On Track?
Based on your personal asset base and planned uses for those assets in the future, you should discuss whether or not you are you on track to achieve your expected outcomes. The achievement of your lifetime financial objectives is one of the many areas where a financial advisor adds immense value to your financial life. Your ability to live your financial objectives should be the area where you focus your attention in your meetings with your advisor, taking precedence over your discussion regarding relative investment performance. There are plenty of online financial calculators and benchmark charts that can help you evaluate your financial plan, but they are often generic and do not take into account the timing and the magnitude of various factors that will impact your personal situation. Your financial advisor should look at your complete financial picture, ascertaining where you stand based on your personal financial desires. When you sit down with your advisor, he or she should show you different possible plan outcomes, suggested strategies to achieve your objectives, and possibilities for combating whatever “weather” you encounter in your financial life and the financial markets.
3. Have Life Changes Affected My Plan?
Since life does not stay static, your financial plan needs to be flexible. Take the time to revisit your goals, risk tolerance, debt exposure, and financial priorities on a regular basis (e.g., annually, bi-annually, when a significant “life event” is about to occur, or when a significant “life event” has occurred). Have you experienced any changes since your last meeting? If you had a baby or grandbaby, purchased a new home, sent the kids or grandkids to college, transitioned to a new job, or lost a parent and received an inheritance, you should discuss those changes and amend your plans accordingly. Sometimes, just a minor change can cause a ripple effect in your financial plan, so use your meeting with your advisor to re-examine / update your plan and find solutions for any problems or gaps that could occur due to “life events.” Your advisor should not only provide advice on how life changes could affect your investment allocation and approach, your advisor should also provide updated solutions as you encounter other financial changes; be it to your retirement or education plan, your tax planning considerations, or other financial needs which require attention.
4. How Much Risk Exposure Is My Portfolio Likely To Experience?
Risk is an under-discussed, yet important and expected, aspect of investing. More importantly, risk tolerance is evaluated and measured differently for every individual. Risk tolerance is defined as a measure of one’s financial and psychological ability to withstand losses. Each person has their own risk tolerance level based upon their asset base, investing experience, personality, and / or age. To facilitate a common understanding of risk levels at our firm and with our clients, we communicate risk level as a speed limit sign to indicate how “fast” or “slow” portfolios are travelling down the hilly, curvy, bumpy investment highway. On this scale, “speed” is determined by the returns and volatility a potential portfolio has historically experienced. You should visit on these issues in your meetings with your financial advisor, discussing your comfort level regarding downside and volatility risk and analyzing if your portfolio needs to be rebalanced. Your time horizon or progress toward your goals may dictate that you need to take more ~ or ~ less risk (or, in our vernacular, “increase” or “decrease” your investment allocation’s “speed limit”). Our job as advisors is to make sure our clients are confident and secure in their financial plans and investment programs, providing reasonable probabilities of achieving financial objectives and dreams.
We encourage you to seek out guidance from an advisor who is not trying to sell you something or convince you of a particular strategy that may not correlate to your risk tolerance. Make sure to be open and honest about risk with your advisor, asking plenty of questions if something is unclear. Asking about your advisor’s method of determining the amount of risk in your current portfolio is a great starting point. If your advisor will not listen to your concerns about risk or is too prescriptive with regard to your investment strategy without adequately determining what is best for you, you may want to consider a different advisor.
5. Which Adjustments Need To Occur?
If your current plan approach is well-suited to your long-term goals despite market turmoil or personal life changes, your plan may not need to be adjusted. If, on the other hand, your financial plan and corresponding strategies no longer fit with your goals, your advisor should explain why. Your advisor should not resort to complicated financial planning and investment jargon; instead, he or she should clearly explain proposed strategies, answering any questions about unclear topics, and recommending alternatives in a way that makes sense to you.
It may also be that minor adjustments are required based on your plans and dreams. For example, you may need to consider adjusting your spending and savings habits to ramp up your retirement contributions, open college funds for your children or grandchildren, give more to charity, adjust your investment approach to account for a new short-term goal, or change your “speed limit” (i.e. asset allocation-based risk profile) to provide the level of confidence and contentment you prefer.
6. Is My Plan Missing Something?
You need a unique financial plan to fit your unique life. Not everyone will need particular products or planning services, but your regular review meeting is a good time to make sure you are not overlooking anything. For example, do you have adequate insurance coverage to provide benefits should the income earner(s) in your household meet an untimely death? Is it time to consider long-term care insurance for potential elder care expenses? Have you considered your estate plan? Do you need to start putting money aside for children or grandchildren’s education? Do you need assistance cutting through the fog regarding the many options you could consider for your Social Security Benefits? Do not shy away from any of these questions or other questions you may have about your finances. You pay your financial advisor to maximize your money, optimize your strategies, provide wise counsel regarding your complete financial picture, and to prepare you for a successful financial future. Once you have an established relationship with an advisor, her or she should become your advocate. Your advisor also should be available to provide you with the confidence and peace of mind which lead to higher levels of financial contentment. Use your financial advisor’s expertise!
Schedule Your Review Meeting Today!
Is your current financial advisor providing you the guidance you need? Has it been a while since you have met with us? At Semita Asset Management, we like to sit down with you regularly to focus on your goals and how you can achieve them. We never like to leave expectations and concerns unaddressed. Whether you have been working with us for years; are new to wealth management, financial planning and investment advisors; or believe you may need to reevaluate your relationship with your current financial advisor, our proven financial planning and investment advice will help you set and successfully attain your goals for your finances and your life. Schedule your account review or free introductory meeting online today! We can meet with you in-person or via videoconference – whichever is most convenient for you.
If you would like to have an investment advisor that conducts client meetings in accordance with the principles outlined above, use the link above to schedule an introductory meeting today.
Michael Meagher is the Chief Executive Officer and Chief Investment Officer at Semita Asset Management LLC, with more than 46 years of industry experience. He specializes in providing strategic, goal-based financial planning, risk management, retirement planning, and portfolio management services. Michael graduated from the University of Houston with an MBA in finance and holds both the Chartered Financial Analyst (CFA®) and Certified Kingdom Advisor (CKA®) designations. Learn more about Michael by connecting with him on LinkedIn.
CFP® () and CFP® () in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements
*The designation of Chartered Financial Analyst [“CFA”] is conferred by the Chartered Financial Analyst Institute, Charlottesville, Virginia www.cfainstitute.org. The CFA candidate must meet the following requirements to be eligible for the designation:
1) Possess of an undergraduate degree plus four (4) years professional experience involving:
- Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments, which includes, but is not limited to, publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio; or
- Supervising, directly or indirectly, persons who practice such activities; or
- Teaching such activities, and
2) Successfully complete a study program that culminates with three (3) levels of examination each of which requires approximately 250 hours of study and preparation. The CFA Institute has a non-mandatory, or voluntary, program regarding continuing education requirements for the CFA charter holder.
**The designation of Certified Kingdom Advisor® [“CKA”] is conferred by Kingdom Advisors, Atlanta, GA www.kingdomadvisor.com The CKA candidate must be a disciple of Christ who has committed to be a person of character who, from a biblical worldview, serves clients with biblical financial advice in order to properly steward the resources entrusted to them. Kingdom Advisors has created the Certified Kingdom Advisor® designation to provide confidence to those looking for financial counsel from a biblical perspective. The Certified Kingdom Advisor® designation is given to advisors who:
- Complete the Kingdom Advisors’ Core Training
- Provide evidence of their technical competence
- Commit to personal stewardship
- Assert their belief in Jesus Christ
- Provide evidence of their personal integrity
- Commit to incorporating biblical wisdom into their financial advice