How to Work With a Financial Advisor

Financial advisers are one of the few professionals you can hire that will directly have impact on your well being. Much like your family doctor, a financial adviser directly impacts the quality of life you will be capable of sustaining throughout your lifetime. Therefore, it is paramount you know how to work with him/her to achieve your financial goals.

Instructions

1. A financial adviser (FA) will begin your business relationship by getting to know you and your goals. Are you a 22 year old college graduate with a great job that wants to be rich, or a 60 year old planning to enter retirement? These are the initial fundamentals for the FA to consider.

2. The FA will ask for all relevant financial information from you to assess your current financial situation. Common questions are: - What is your annual income (combined if in a relationship)? - How many children do you have? - What are your current debts? - What short terms goals must we work around to accomplish the long term goals?

3. The FA will create a plan based upon your goals, income, risk levels, and short term goals. Once this plan is created, it is important you stick to the plan. A good FA will not only create a reliable plan, but will help you remain within the boundary limits of the plan by understanding your needs and educating you upon the importance of sticking to the details of this plan.

4. The FA will help you execute the plan once in the initial phases and advise you on how to stick to the plan based upon the goals you have identified.

5. Conduct regular follow ups to monitor your success, identify weaknesses, and to renew your vigilance. Remember, the financial plan was created for you, so the majority of the financial discipline will be required from you in order to properly execute the plan.

6. When questions or difficulties arise, contact your FA for advice. Remember, a FA is analogous to your family doctor, so when you detect something abnormal that could negatively impact your portfolio, contact your adviser for assistance.

Tips & Warnings

• When a new short term objective arises (getting married, having a baby, etc), contact your financial adviser as soon as possible to let him know of your changing situation.

• Ask your financial adviser what his sales commission will be for selling you a financial product to reveal his true motives.

• Some financial advisers will ask for documentation (tax records, insurance policies, etc) to review the complete details of your current financial situation, so it is best to have these on hand for your first face to face meeting.

• Keep all documentation your financial adviser gives you in the same location as you keep your tax returns.

• Educate yourself in the goal execution process to make yourself a more knowledgeable client.

• Nearly all financial advisers work on some form of commission or sales quota. Be highly suspect when a financial adviser attempts to sell you products owned and operated by his company.

• Never take your financial advisor's word on anything. Always double check his research yourself, or with a trusted resource that has experience in the financial industry.

• All financial advisers are not created equal. There are great ones, and there are bad ones. Ask for the performance history of any financial adviser you are about to hire to avoid overpaying for services offered by a substandard adviser.

• Interview several financial advisers before settling on one choice.