Here are five details to understand and discuss with your investment advisor:

1. It may not be the person managing your assets. Find out who monitors day-to-day investment details.

Don’t assume your investment advisor is acting alone, it probably isn’t. They are the front person who manages your account and knows your personal financial situation. They can advise you on how to build your investments for a sustainable retirement, remind you to take your required minimum distribution (RMD), and guide you through your transition to retirement.

Chartered Financial Analysts (CFA) are trained and licensed to manage investments. They work for investment firms of all sizes to assess the stock market. A mutual fund may have a team of CFAs to invest for you. Meeting them may not be necessary, but understand their experience.

Your advisor should know the team investing your money and have access to them if they or you need more information.

2. Their recommendations may include other factors.

Their compensation can influence their advice, especially when it comes to charitable donations and money. If your investment professional receives an annual fee, he has a vested interest in making your money grow.

If they work for a large company, they may be influenced by commissions, promotions or other internal company factors. They can always make a good recommendation, but not the better One for you. Check with them if they are a fiduciarywho are bound to always act in your best interests.

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Understand where there may be conflicts. For example, if you want to donate a large portion of your money to charity, their income will be negatively impacted.

Another challenge concerns cash flow. We all know money doesn’t earn much interest, but everyone should keep some on hand. If you hold $50,000 in your advised account for this purpose, you may be charged an annual fee on these holdings. Instead, keep your cash needs in the local bank and save the fees, while getting FDIC insurance.

Also see: Should I invest in an IPO?

3. Their expertise may be limited.

Like the medical profession, finance professionals have specialties, such as tax issues, annuities or insurance. If you’re looking for information on the best way to save tax, consult an accountant with your investment professional. They each have different perspectives offering the best solution for you.

Use the same approach when buying insurance and annuities, where commissions are involved. There is a range of products, so if your investment advisor only sells from one company, get an alternative suggestion. Comparing for yourself could save you money and provide better benefits. Or hire an objective financial planner, even if you have to pay them an hourly rate.

Remember your investment advisor does exactly that, investments. If this is not their area of ​​focus, you will be better served by the team approach.

4. They may not be the right size for you.

If your wallet is smaller than that of their average customer, you may not get the attention you desire. If you are their most important client, the advisor’s knowledge and experience may not match your needs. Ask for more than the number of customers they have. Find out the average wallet size of their clients, because you want to know that they have other clients like you.

Read: Should retirees invest in emerging markets?

Tax strategies and investment options vary depending on the number of assets you own. Sticking with your current planner because you like it or are comfortable with it only makes sense if it fits your wallet. Or diversify by having a second or third investment portfolio with different advisors, each advisor bringing their own investment philosophy and specialized expertise.

For example, an inheritance may already be invested to good effect, so there is no need to transfer it to your investment advisor’s firm. Bottom line: Be aware that you may outgrow your investment advisor or need to find a better fit.

5. Know your advisor’s background.

While Consumer Reports tells the rest of the product story, the Financial Industry Regulatory Authority (FINRA) provides information about your financial advisor or potential advisor. They are an independent regulator and you can search for free at BrokerCheck. On this FINRA site, you can see your broker’s professional history, education, and licensing, and more importantly, if they’ve had any legal challenges against them.

The wealth of information is meant to be a way for the public to find the right person for them – qualified, legitimate and hassle-free.

When a friend asked me for advice on the two finance professionals she had met, I directed her to BrokerCheck. Although they seemed experienced and knowledgeable, what she found was instructive. One had worked for three different companies over the past four years, too much for his liking, and the other, more worryingly, had two lawsuits against him for presenting misleading information.

Read also : Three signs you’re ready to retire

You need to be comfortable with your advisor, but also aware of the limitations of their work and experience. You need to find out more than they are a “nice person” and create a return on your wallet. Stay involved enough to ask questions. Confident enough to be open to suggestions while examining objectively.

It’s your money and your responsibility.

Christine D. Moriarty, CFP, has over 25 years of experience coaching individuals, couples and business owners on their finances. She focused on the intersection of emotions, behavior and money. She is living her dream in Vermont and enjoys sitting down with a cup of Irish tea and a good book. Learn more about Silver peace.

This article is reproduced with permission from NextAvenue.org© 2022 Twin Cities Public Television, Inc. All rights reserved.

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