When you’re looking to work with an investment advisor, it’s important that you know that not everyone will be compatible with your goals. Finding the right advisor is paramount. To find someone who suits your needs, you should ask your investment advisor questions before and during your time working with them. Use the questions below to ensure you’re finding the right advisor for you.
How Do You Get Paid?
The investment advisor can receive payment through several different fee structures. One might charge you a fee only, meaning they could charge you a percentage of your assets. Others might make a commission from selling specific products, no matter if it’s within your budget. When you’re beginning this journey into investing, we recommend working with a fee-only advisor to avoid a conflict of interest.
What Are Your Qualifications?
It’s crucial that you don’t confuse financial advisors and investment advisors for the same person. While both terms are often used interchangeably, they are different. Ask your investment advisor about their qualifications because they should be registered with the SEC or a state regulator. The main difference between the two is that the financial advisor does not need to register and is not obligated to fiduciary responsibilities, unlike investment advisors.
What Services Do You Provide?
Not every investment advisor will provide the same type of services. Before looking for an advisor, ask yourself what you want to gain from this partnership. This will help you determine which advisor is best to work with based on your preferences.
All investment advisors give investment advice, but some might manage investment portfolios, provide financial planning, or offer brokerage services. Ask what services your advisor provides to determine if they can meet your needs.
What Is the Objective of Each Investment?
Each investment the advisor asks you to make can either provide value, growth, or income to your assets. One of the benefits of hiring a registered investment advisor is the freedom to choose which financial opportunities you want to take advantage of. For example, the advisor might show you growth stocks that have the potential to gain interest but do not pay a current income. You could ask your advisor not to offer you those types of investments if you’re only looking for value and income.
Ask your investment advisor what each objective is for what they’re showing you. This can help you determine if it’s worth your investment.
How Do You Prefer To Communicate?
Without good communication, it can be challenging to work with anyone. Asking what communication method they prefer is a question you should ask your investment advisor because it can better your partnership and ensure you’re on the same page. It’s best to know if they prefer phone calls, emails, texts, etc., so you can always get the quickest response to your questions or concerns.
An excellent investment advisor will be able to answer all of your inquiries and address any concerns. You should ask questions before choosing an advisor and throughout the process to ensure you understand exactly what you’re doing. What other questions do you find helpful to ask your investment advisor?