5 Questions You Need To Ask Your Financial Advisor

When it comes to how to handle your hard-earned money you just can't be too careful. Many a person has put all of their trust and savings into the hands of an advisor who may not have had the expertise or knowledge as to the best way to handle the funds. In an instant you could find yourself having to start all over again. One bad investment or decision could wipe out a lifetime of savings.
When you are considering the services of a financial advisor, there are some important questions you should ask before you entrust him with your money. It is better to be well-informed before you hire him rather than sorry later that you did.
1. Is this advisor a fiduciary? In simple terms, a fiduciary is someone who will put the best interest of his or her client above his own benefits. A beneficiary has to tell you ahead of time how much he charges for his services. In addition, they have to tell you how they earn their money and let you know if they have any potential conflicts of interest that would prevent them from offering you comprehensive and fair services.
2. You should ask about this financial advisor's experience. Don't be afraid to ask about his schooling, degrees, certifications, and licenses. There are many degrees of knowledge that a financial advisor could achieve to make him even more valuable in his profession. After passing a 10-hour exam, an advisor can move up to the title of certified financial planner or CFP. The more knowledge and expertise your advisor has, the more well-informed decisions he may make on your behalf.
3. Find out upfront what this advisor charges and how he bases his fees. It's best to know from the start if there is a base fee to set up your portfolio. You should also know if you will have to pay based on a percentage of your assets. If a financial advisor receives a commission on certain products, it will be to his advantage to sell them to you but not necessarily to your advantage to purchase them.
4. Find out what kind of approach he has towards investments. This is an important question because you want someone who is on the same page as you are. If you are a conservative investor who is willing to wait patiently for your funds to grow you should not be paired up with a risk-taker who is looking to reap large rewards quickly. Sometimes this tactic works but when it doesn't it could be devastating.
5. Will this person be your dedicated financial advisor or does he work for a company, where you will be subject to different advisors as time goes on? You want to work with someone you trust and once you establish a solid relationship you will feel more secure in working towards the same goals.

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