15 Essential Questions to Ask a Financial Advisor When Planning Your Retirement

Looking for a financial advisor to help you with retirement? Sometimes it can be more difficult than shopping for a house or a car. Learning how to make money can feel like a scary thing to get your head around.

However, there are a few simple questions that can help you determine if your financial advisor is right for you. The following are the 15 best questions to ask your financial advisor.

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1. What is your financial philosophy?

Money is a personal matter, and hopefully you will have a relationship with a financial advisor that will last for years to come. Therefore, it is important to determine if you are ideologically compatible.

It’s okay if your philosophies differ—it can represent a learning opportunity for you—but if you want to trust your counselor, you’ll want to agree on some important things.

2. What services do you provide?

Different financial advisors offer different things. If you want a special offer, make sure the advisor can deliver. Depending on your needs, you can ask about:

  • Tax planning

  • Insurance coverage

  • Budgeting advice

  • Home preparation

  • Finance

  • Retirement planning

3. What professional qualifications do you have?

Each financial advisor will have their own specific qualifications. Pursue a respected industry designation, such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA).

In order to sell or recommend specific products, advisors may be required to take a licensing exam from the Financial Industry Regulatory Authority, better known as FINRA. He may also need to register with the state.

4. Who are your regular customers?

Find an advisor who has experience dealing with clients in a similar situation to yours. For example, if your focus is retirement planning, make sure your advisor has a track record of helping clients plan for their golden years.

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5. Are you an entrepreneur?

Some people prefer to make sure that their financial advisor is a fiduciary. This means that advisers are bound by law to always act in your best interest.

There are many non-career advisors who do good and ethical work. However, choosing an insurer can give you additional peace of mind.

6. How do you make money?

Financial advisors can use a variety of payment systems. If you choose a commission-based advisor, he may steer you toward the wrong product for your needs.

Instead, you can choose an advisor who charges you a service fee. If you choose a no-fee financial advisor, find out if that fee is down to a percentage of your assets, or if it comes in the form of a fee.

7. Will you provide details of the writing fee?

If you want to be extra careful, ask your financial advisor to provide a written list of all fees and expenses. This way you can avoid unpleasant surprises. Your financial advisor should understand your desire for “better than worse.”

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8. How to communicate?

Communication is an important part of any professional relationship. This is especially true when it comes to money. So, make sure you are comfortable with the counselor’s communication style.

Will your financial advisor call you first, or will you receive an email message? Or, your advisor may prefer to meet in person. Know and adapt your communication style.

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9. How much money do I need to retire?

For most people seeking financial advice, this is the golden question. There is no “right” answer here, as experts have many different theories. But your financial advisor should be able to give you a ballpark estimate, and explain how they arrived at that number.

Do you have other personal financial goals that need to coexist with your retirement goals? Your financial advisor should be able to help with this as well.

10. When can I expect to retire?

Once you know how much money you need to retire, it’s important to know when you’ll get there.

There is no clear answer to this, because future returns are unknown. But your financial advisor should be able to tell you what your retirement plan should look like based on your specific situation.

11. When should I file for Social Security?

Deciding when to file for Social Security benefits can be difficult, as the age you choose will affect the size of your monthly paycheck. It’s easy to find blanket advice online, but your financial advisor should be able to make a recommendation that fits your needs and goals.

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12. Do you offer educational resources?

Different people will have different ideas about how they want to work with their financial advisor. If you’re someone who wants to learn while you’re on the go, ask your financial advisor how much they can offer in terms of educational materials.

13. What kind of tax can I expect to pay in retirement?

Some people fail to manage the taxes in their retirement plans, leaving them with a big surprise later on. Your financial advisor can help you prepare for the taxes you will face in retirement.

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14. What do you think is the biggest risk to my retirement?

One of the most important parts of financial planning is risk management so you can create a contingency plan. If you ask an advisor about your risk, you’ll see how close the advisor is to today’s financial environment.

If you’re putting your retirement responsibilities in the hands of an advisor, you’ll want to make sure you’re keeping a close eye on your current and future risks.

15. What will we do if I don’t reach my goal?

In a perfect world, all financial advisors would provide a reliable plan to help clients achieve their goals. But the world we live in is not perfect.

Your financial advisor should be able to give you transparency about what they will do if you don’t meet your financial goals.

bottom line

If you’re not sure where to start your financial advisor journey, you can find plenty of ideas online. However, it’s never a bad idea to ask your friends and family about their own experiences – sometimes, a direct recommendation is the best way to get on the right track.

Once you find the right professional, you’ll have expert help saving for retirement, learning how to eliminate financial stress, and achieving your other financial goals.

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