As someone who has worked hard for your money and investments, you need to know what questions to ask your financial advisor. It's not enough to simply put your money into another person's hands without first understanding who the person is and how he or she works. Any investment professional you work with should be willing to answer your questions and be happy to take the time you need to explain your options and the market.
Knowing which questions are the most important will help you maximize your time and the potential of your wealth.
- The first thing to remember is that there are no dumb questions. We've all heard this before, but the financial market is complicated, and this is your future, after all. Ask questions, seek answers, and take an active part in your relationship with the professional you hire. He or she should know your goals and your comfort levels and work to keep you within both. As such, perhaps the most essential question you can ask your financial advisor is if a suggested opportunity fits with your individual investment goals. Are you looking for long term investments or a quick turn around? The longer an investment takes, the more likely it is that you will see a return. Short-term investing can be riskier, but it can also lead to rapid profits. Both are viable options, depending on your personal level of risk tolerance.
- Another important question you should ask your financial advisor is how the investment will make money. Will it pay dividends, or will it give you interest? What has to happen in order for the investment to start turning a profit? Also, what fees are involved with the investment? If there are fees to purchase, maintain, or later sell the investment, you need to know this upfront so you can plan for the costs. Having the full picture of an investment will prevent surprises down the road and help you better manage your money.
- You also need to know how to research the investment opportunity. While you will have many questions for your investment advisor about the strength of the investment, you should also ask how to obtain information about it from other legitimate sources. No matter how qualified your financial advisor is, virtually no investments are guaranteed, and other experts may be able to offer you more information to help you make the decision.
An investment planner is a great resource, and you should take full advantage of his or her knowledge. There are many questions you can ask your financial advisor to get the most out of an investment opportunity. No matter how new you are to investing, your planner should treat all of your questions with respect and take the time to make sure you fully understand where you are putting your money. Your wealth can give you a safe future, and it deserves to be in good hands.
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Questions? Email me at wesley@thewandwgroup.com and visit our website at
http://www.thewandwgroup.com . New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.
Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.
