Questions to ask your financial adviser at your annual review
You should always be able to ask as many questions as you’d like when working with your financial adviser. So, before you have your annual review, think carefully about what you’d like to ask. Here are a few suggestions:
Are my goals still realistic?
When you first began working with your financial adviser, you may well have articulated a number of financial goals. For example, you might have said that you wanted to pay for your children’s education, or that you wanted to retire at a certain age, or that you wanted to travel for two months each year during your retirement. In fact, you could have many different goals for which you’re saving and investing. When you meet with your financial adviser, you’ll certainly want to ask if you're still on track toward meeting these goals. If you are, you can continue with the financial strategies you’ve been following; but if you aren’t, you may need to adjust them.
Am I taking on too much — or too little — risk?
The financial markets always fluctuate, and these movements will affect the value of your investment portfolio. If you watch the markets closely every day and track their impact on your investments, you may find yourself fretting considerably over your investments’ value and wondering if you are taking on too much investment risk for your comfort level. Conversely, if you think that during an extended period of market gains your own portfolio appears to be lagging, you might feel you should be investing more aggressively, which entails greater risk. In any case, it’s important that you know your own risk tolerance and use it as a guideline for making investment choices, so it’s definitely an issue to discuss with your adviser.
How will changes in my life affect my investment strategy?
Your life is not static. Over time, you may experience any number of major events, such as marriage, divorce, children, new jobs and so on. When you meet with your financial adviser, you will want to discuss these types of changes, because they can affect your long-term goals and, consequently, your investment decisions.
How are external forces affecting my investment portfolio?
Generally speaking, you will want to create an investment strategy that’s based on your goals, risk tolerance and time horizon. And, as mentioned above, you may need to adjust your strategy based on changes in your life. But should you also make changes based on outside forces, such as interest rate movements, political events, new legislation or news affecting industries in which you have invested substantially? Try not to make long-term investment decisions based on short-term news. Yet, talk with your financial adviser to make sure your investment portfolio is not out of alignment with relevant external factors.
By making these and other inquiries, you can help yourself stay informed on your overall investment picture and what moves, if any, you should make to keep advancing toward your goals. A financial adviser is there to provide you with valuable expertise — so take full advantage of it.