Your financial advisor is an important part of your fiscal health- you want someone that knows what they are doing. Luckily, with a few questions, you can get a good gauge on how beneficial an advisor will end up being to you. Don’t just blindly hire someone, but ask questions and get a feel for their expertise.
A Canadian financial advisor needs to have a lot of knowledge in order to guide their clients in the correct decision when it comes to increasing wealth. The marketplaces are extremely intricate, and the more practical knowledge your financial advisor has about these things, the better your chances are of making the best financial decisions. Here are five questions that you will want to ask prospective financial advisors prior to placing any of your money under their care:
1. What is the long term prognosis? You want to grow your wealth, right? Well, you also want to have a good handle on what to expect. This question won’t ever be 100 percent accurate, but knowing the general whereabouts that your money will be headed in is a very good thing. For example, if your investments have performed at a 5 percent increase per. year and look like they will continue in that direction, this can be a better situation than if your potential investments only look like they will grow at 3 percent per. year.
2. What are my risk factors? All investments carry a degree of risk with them. Any financial advisor that says there is no risk is lying to you. The trick to having a successful portfolio is to adequately minimize your risk factors while maximizing the potential for profits. This leads to portfolio diversification, or in other words, mixing in higher risk/higher reward investments with other investments that focus more on small gains with minimal amounts of risk. Your adviser should be able to explain these things quite clearly.
3. What will my retirement situation look like? A financial planner should be able to center your portfolio around your specific goals. Retirement is one of the more sought-after goals, and your advisor should be able to clearly let you know what to expect. This will differ based upon income, savings, and age, but the basic premise is the same. Your advisor shouldn't leave you in the dark about what your prospective future financial situation will look like.
4. What can I do to improve my situation? This is an often overlooked point, but your financial advisor should be able to give you a good idea of the things you can do to maximize your financial future. Whether it’s putting less money in CD's and more in corporate bonds or starting looking for a career with a better 401(k) matching policy, your advisor should be able to give you ideas on how to improve your financial situation; whether you apply those ideas is your decision.
5. How can I budget better? A financial advisor isn't going to tell you how to spend less on groceries, but they can give you some guidance over how to refinance high interest home loans or go about bettering your credit score so you pay less on auto loans. Your financial situation can always be improved upon, and your advisor should be able to give you educated ideas about what you can do here.
A Canadian financial advisor needs to have a lot of knowledge in order to guide their clients in the correct decision when it comes to increasing wealth. The marketplaces are extremely intricate, and the more practical knowledge your financial advisor has about these things, the better your chances are of making the best financial decisions. Here are five questions that you will want to ask prospective financial advisors prior to placing any of your money under their care:
1. What is the long term prognosis? You want to grow your wealth, right? Well, you also want to have a good handle on what to expect. This question won’t ever be 100 percent accurate, but knowing the general whereabouts that your money will be headed in is a very good thing. For example, if your investments have performed at a 5 percent increase per. year and look like they will continue in that direction, this can be a better situation than if your potential investments only look like they will grow at 3 percent per. year.
2. What are my risk factors? All investments carry a degree of risk with them. Any financial advisor that says there is no risk is lying to you. The trick to having a successful portfolio is to adequately minimize your risk factors while maximizing the potential for profits. This leads to portfolio diversification, or in other words, mixing in higher risk/higher reward investments with other investments that focus more on small gains with minimal amounts of risk. Your adviser should be able to explain these things quite clearly.
3. What will my retirement situation look like? A financial planner should be able to center your portfolio around your specific goals. Retirement is one of the more sought-after goals, and your advisor should be able to clearly let you know what to expect. This will differ based upon income, savings, and age, but the basic premise is the same. Your advisor shouldn't leave you in the dark about what your prospective future financial situation will look like.
4. What can I do to improve my situation? This is an often overlooked point, but your financial advisor should be able to give you a good idea of the things you can do to maximize your financial future. Whether it’s putting less money in CD's and more in corporate bonds or starting looking for a career with a better 401(k) matching policy, your advisor should be able to give you ideas on how to improve your financial situation; whether you apply those ideas is your decision.
5. How can I budget better? A financial advisor isn't going to tell you how to spend less on groceries, but they can give you some guidance over how to refinance high interest home loans or go about bettering your credit score so you pay less on auto loans. Your financial situation can always be improved upon, and your advisor should be able to give you educated ideas about what you can do here.