What to Expect When You Meet a Financial Advisor the First Time

Whether it’s with an agent, planner or advisor, meeting the person who is going to help you with your financial future can be intimidating. This is especially relevant when it seems you are barely treading water in the uncertain and tumultuous ocean we call our current economy. However, if you are serious about mapping out your financial future—not just your retirement—this is a vital, crucial process where you can begin to turn financial dreams into financial realities for yourself, your family and all your loved ones. So if you’re excited to do this, please keep reading.


What Should You Bring?

Based on experience, most advisors have a list of items they prefer to review. Typically, they will communicate this with you prior to your initial appointment (if not, please remind them). Among the most important pieces of information you should expect to have ready are the following:

* Tax returns and W-2 forms (some advisors go back as far as the last three years)

* Applicable pay stubs

* Monthly household budget, income and expense records

* Any loan information

* An accurate list of valuable assets

* Your investment records

* Information regarding your retirement accounts (self-directed or otherwise)

* Your significant other (this has to be a team effort to be successful)

Even if you haven’t been asked, you might consider creating a list of your short- and long-term financial goals to bring with you. This signals your financial advisor that you plan ahead, think long term and prepare for the future. In addition, the fact you’ve put your intentions down in writing (in black and white) is a great way to stay motivated and keep yourself on track.


What Should You Expect?

To help you understand your opportunities, and to best understand your goals for the future, your advisor will ask a variety of questions when you first meet. This will help to clarify your current financial state, your future goals, your risk tolerance and your expectations, as well as any plans you have in place right now. Your planner will also determine whether everyone is on board, as well as the degree thereof, with the goals of future financial planning. Being able to gauge how much support you can expect to receive in your efforts is yet more valuable feedback your agent can provide.

Obviously, you should try to bear in mind the obvious fact that not every financial planner will mesh well with your needs, goals and dreams. Some of them just won’t be suitable for you. Of course, this works both ways. You easily might not be a good fit for the way the financial advisor works because your particular set of circumstances might not match the offerings available. It is clear then: you are not the only one doing assessments in this get together.


What Should You Ask?

Before you decide to trust both your future and your hard-earned income to a specific financial advisor who may, or may not, assist you, there are two questions minimum, you should ask.

  1. Are you a fiduciary?

You might not be familiar with this term, but you definitely want to be (trust me on this). In our case, a fiduciary is an individual in whom another has placed the utmost trust and confidence to manage and protect the other’s money. The idea centers around a relationship wherein one person has an obligation to act for another’s benefit. This requires that the person be able to consider all of the circumstances and known facts and literally “put themselves in the other’s shoes” so that they can make the very best financial decisions and offer only those choices that are biased in the other’s favor.

Essentially, this question helps determine whether the financial planner is legally bound to represent your interests or if the agent’s self-interests will govern all the decisions that must be made. (You should soberly consider how much wealth you stand to lose when advisors act only on their own behalf, not yours.) The crux of the matter is this: only fiduciary financial planners are obliged to recommend choices that are in your best interest regardless of their own perspective and no matter how they may be affected.

  1. How are you paid?

Now that we know we ought to be in a fiduciary relationship, we must understand that various financial agents have all sorts of ways of generating personal income based on you, the client. For example, some advisors charge hourly rates while others will bill by the project. Many planners work for a percentage of your portfolio’s total value. Still others can use a combination of all these techniques. It’s also very common for advisors to generate income by earning commissions based on the products or services they’re able to sell to you. When you understand exactly how they earn their living you can more easily comprehend their motivation (or lack thereof). Some are working hard for you. Others are hardly working. Both get paid.

Further, you would not be going to a financial planner in the first place to seek one’s counsel if you yourself knew all the ins and outs of the markets. Quite probably, you’re considering this move as a way to become educated by someone you feel you can trust. This means there is some mystery involved. Now, when you know what to expect, this not only removes some of the uncertainty from the process, but it also helps prepare you for the best experience possible as you and your trusted agent work together to improve your financial goals. This is the kind of experience you deserve! It’s exactly what you want! The better prepared you are, the quicker you’ll be able to get down to the brass tacks of turning dreams of your financial future into concrete actions that make them come true.

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