A Guide to Determining If You Should Work With a Financial Advisor [Part III]

What to Expect at Your First Meeting and Beyond

Once you’ve found an advisor (or two) to meet with, have a game plan for the first meeting. Be prepared for the types of questions your advisor will ask you so that you can be ready with useful information. This will help ensure the meeting is productive and that you and the advisor are both on the same page regarding the type of advisory relationship you are entering into.

Here’s what you can expect when you first meet with your advisor.

Gather Data, Discuss Goals, Establish a Plan

Before for your first meeting, you may be asked to complete a general questionnaire on things like your income, assets, risk tolerance, tax situation, marital status, home ownership and level of financial experience and education.

This saves you and the advisor time so you can spend more of the meeting getting to know each other.

While no two advisors are exactly alike, at the first meeting with an advisor, they’ll typically start with asking you “big picture” questions. These questions give them an idea of how aggressive or conservative your financial goals are and how much you know about finance.

Sometimes at the first meeting, an advisor will also present a general model portfolio, based on your initial questionnaire. At this time you can help the advisor by providing feedback on the portfolio. Do you feel it’s too aggressive if the market changes? Would you prefer to invest in stocks that are socially responsible or environmentally friendly? Now’s the time to help the advisor know how best to fulfill your needs.

After your first meeting, advisors will usually prepare a revised portfolio allocation based on your feedback. This will often be a computer-generated asset allocation plan based on inputs like time frame and risk tolerance.

Once you decide on the right advisor and path for you, they will provide the appropriate paperwork for you to fund the account. This will set in motion the agreed-upon asset allocation plan and formalize your relationship with the advisor.

Typical “big picture” questions are:

  • Where do you want to be in 10 years?
  • Do you have a healthy relationship with money?
  • Are you good at saving/budgeting?
  • What are you looking for in an Advisor?
  • What scares you about your current financial situation?
  • What’s your ideal retirement age?
  • What kind of retirement lifestyle do you want?
  • What are you financial life goals?
  • If you are not on track with your goals, are you willing to change your financial habits?
  • What financial concerns keep you up at night?

If you have thought through these questions in advance and are prepared to answer them, you can save time and make a more reasoned evaluation of whether the advisor understands your needs.

Be Open and Honest

You’ve done your research and gone through the proper vetting process. You’ve met with your advisor to review goals and decided on the nature of your partnership together.

Now it’s time to fully commit to the process. When discussing your financial picture with your advisor, be honest about your ability to manage money and your tolerance for risk. Share your financial struggles and your goals. Remember: although you might be independent in many other aspects of your life, asking for financial advice is a commitment to learning and requires collaboration.

It can be difficult to open up about money challenges and speak to another person about your finances—a topic that feels very personal at times. But remember that your advisor is your advocate. The most successful partnerships between investor and advisor are achieved when trust and transparency is present on both sides. By approaching the relationship as a true partnership, you will be one step closer to achieving a successful financial future.

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