Four Questions to Ask Your Financial Professional

Check the background of investment professionals associated with this site on FINRA's BrokerCheck.

Four Questions to Ask Your Financial Professional

One of the most important decisions we make in our lives is how we plan to manage our money. Some people feel confident enough to tackle it themselves. However, a study has found that people who consult a financial advisor fare better with their investment returns than those who don't. Their conclusion was that financial advisors often provide guidance in areas such as financial coaching and finding cost-effective investments.

Deciding to consult a financial advisor can be life changing. Financial advisors play a vital role in the lives of their clients. A person's money is their security, autonomy and legacy to leave to their loved ones, and these people often have tough questions. Four tough questions clients ask their financial advisors include:

1. What are your personal and professional values, and do they overlap with mine?

When you deal with a financial advisor you are trusting this person with more than just your financial world. You are inviting them into your life, which may stretch deeper than the stocks you want to buy and manage. You will be offering them your vulnerabilities, personal feelings, how you live day-to-day, and where you want to go in the future. They may also learn about your family members, so building trust and nurturing a relationship is essential. Talking about your personal life and getting to know your advisor is an important step in building a relationship foundation.

2. What is your investment philosophy in terms of your own money?

How does your financial advisor invest their own money and what is their philosophy? Are they as transparent with their strategy and goals as they expect you to be with them? Does your philosophy align with theirs? Understanding how your financial advisor manages their own money may help give you the insight and confidence you need to provide enough transparency to be beneficial.

3. How does a regular person like me do well in investing?

There are different ways to invest. Investors can explore stocks, mutual and index funds, exchange-traded funds (ETFs), annuities, fixed income, certificates of deposit (CDs), real estate, collectibles, and other methods. All forms of investing carry some level of risk, regardless of how you go about it. However, some strategies are riskier than others. The stock market is a popular investment vehicle and something most people are familiar with, so we will use it as an example to better understand investment risk. Investors tend to break up the stock market into value stocks and growth stocks. People invest in growth stocks hoping they will go up faster than the market or their industry and the investor can sell it off for a profit quickly. Value stocks are often less glamorous and represent more mature companies in industries that produce goods and services that have been around for a while and have a practical purpose. Value stocks are investments you hold for the long term and generally are less risky than growth stocks. Growth stock investing is significantly more volatile and dangerous.

4. What happens to my finances and strategy when you retire?

Imagine one day you wake up and the market is in turmoil. Maybe people are on edge about a possible interest rate hike or lousy employment numbers that were reported. The market is crashing, and suddenly your brain is on fire. Then, you learn your financial advisor you have been working with for decades, who knows you and your financial situation, strategy, and goals decides it is time to retire.

It couldn't be worse timing. That kind of news would leave anyone concerned because the relationship you built with your financial professional goes far beyond just the numbers.

The key is not to make an emotional decision. Instead, look at your options pragmatically. Do your due diligence and consider the opportunities available. Many financial professionals are attached to, or partners of a firm. In that case, you may ask your advisor about a succession plan or a recommendation for another partner they trust that could potentially provide the same high-quality, personalized service —or even another financial professional within the industry they think might be a good fit.

Talk to your financial advisor or contact us

If your financial professional plans to retire, talk to them about it and see if they can help you secure new representation, or reach out to BECU Investment Services.  Our financial advisors are always here to help. Our team will take the time to get to know you, understand your goals and implement a retirement strategy that's appropriate for you. Set up a complimentary consultation or call 206-439-5720 today.