Financial advice is easy to come by. Great advice? Not so much.
So, how do you know if you are getting great advice from your financial advisor? There are a couple of points that I believe need to be reviewed in order to determine if you are getting great financial advice.
Great Financial Advice Checklist
Develop an investment policy statement with your financial advisor to understand where your money is invested. It’s a statement that clearly outlines what your agreed investment objectives are and the acceptable investment philosophy that exists.
Know what the fees are. There are so many different ways for an advisor to charge fees — and there is not one right way. The best way is the way that you understand and are comfortable with. I’ve heard advisors and clients say everything from flat to percentage of assets under management, monthly or annual retainers, hourly, performance fees are the way to go. The truth is, it’s whatever you prefer and agree on.
Review your advice with your advisor periodically. If it’s money matters, then benchmark against an appropriate index. If it’s life goals then review your savings and protection needs. Continue to repeat this process forever. That’s right, planning doesn’t stop in retirement.
You should agree with the investment and planning philosophy of your advisor. I’m not saying whatever philosophy your advisor presents should be adopted. You are in control of the decisions and that means you should entrust someone who you believe shares the same philosophy as you do.
Great financial advice for you might not be great for another. These are only a few points to consider when you’re searching for great financial advice. Use them as guides as you figure out what financial advice you should use.