What To Consider When First Meeting Your Financial Planner

by Hank

If you decide to hire a financial planner to help you with your investments, there are several things you should consider when you first meet your adviser in order to start your relationship off on the best foot.

Initial Agreement. When you sign up and commit to this relationship you sign an initial agreement that stipulates the arrangements. Make sure you communicate effectively and your exact situation and future plans in detail. This means that you give details on your income, expenses, savings, future plans to save, major monetary commitments. Like sessions with your shrink, now is not the time to fib about how bad or good your financial situation is.

Types Of Arrangements. This relationship can be one of two types. Either the investment manager acts on your demands, invests where you want to invest and take out investments when asked. Or, you can give the right to place your money in the appropriate investments on your behalf to the manager. In the latter case, you have to be more vigilant to make sure that you are kept updated and that the actions taken on your behalf are in the best direction for you.

Goals And Needs. After this exchange of information, your manager should advice you on the overall direction that your investments should have according to your needs. Taking that advice and your own understanding, you both should reach to a conclusion on what you want from your investments. These goals and needs should also be reviewed every couple of years or when large life events happen such as the birth of a new child.

Specific Targets. You might also want to investment manager about specific targets or goals. You should know exactly where you are headed and what you need to do to get there. Keep the flow of communication a two way street so that you can have a realistic view of what will be possible and can express your desires.

Updates. Once the agreement is set and the targets talked about, you should be kept updated about the performance of your investments. Also, ensure that you are in the loop about where the investments have been made on your behalf. This is important because staying aloof will put you at risk of being exploited unnecessarily, cheated, or invested in financial products that are not right for you for that matter.

Stay Informed. Keep an eye on the market or discuss investments with your adviser as needed to have an understanding of how things are generally going and any possible upcoming opportunities. If you feel that you are not getting the best out of the relationship, that risky investments were made when you did not want any, or reasonable returns are not as high as you would like, then you might want to have a talk with your investment manager. In persistent situations, to avoid long-term disappointment, there is no harm in getting someone else to manage your investments.

More people than ever are choosing to trust their investments with a financial planner or an investment advisor. Choosing a financial planner to represent you and your investing goals is not a decision that should be taken lightly.

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