Commentary: How to have a more productive relationship with your financial adviser
It's the time of year--Valentine's Day--when people are thinking about the relationship with the most important person in their lives: their financial adviser.
It's the time of year-Valentine's Day-when people are thinking about the relationship with the most important person in their lives: their financial adviser.
Okay, so we're probably not number one on your relationship list, and you're probably not going to buy us chocolate (although we wouldn't mind if you did), but that doesn't mean there isn't merit in revisiting the relationship you have with your financial adviser.
Here are the things that can help you maximize the relationship you have with your financial adviser.
Have Clear Goals
You likely have a reason for saving, and it's these savings goals that dictate so many of the strategies that go into your financial plan. In order for your adviser to provide better advice, your goals should be as specific as possible. Ideally, these goals should carry a specific dollar amount that you want to accumulate, the date when you want to achieve your goal and what purpose that money has.
Let's say that your goal is to save money for college. Rather than simply saying "I want to save for retirement," be specific how much you want to save. A better goal would be "I want accumulate $200,000 in 10 years to reach my retirement savings goal." When your goals are specific, it allows your adviser to know which strategies and which asset allocation are best suited to help you save for your goals.
The reason you hired your financial adviser is because you felt that there were aspects of your financial situation that you needed help with. You may be struggling with debt. You may need assistance developing a savings plan. Or you may have complex financial planning needs that you simply can't navigate on your own. Whatever it is you felt you needed help with, be upfront with your adviser.
If you go to meet with a personal trainer, they'll ask what your diet is and how often you exercise. It's best to tell your trainer if you're eating too much junk food or can't remember the last time you've worked out so that they understand where focus needs to be placed. Similarly, it's important to be upfront with your adviser about what financial skeletons you may be dealing with. If you have debt or unwise spending habits, being honest gives your adviser necessary context to know what hurdles you may need to clear.
The relationship you have with your adviser is a partnership. This means your adviser should proactively contact you to check in to see if anything has changed with your personal circumstances or if your goals have changed.
Because it's a partnership, it's also important that you're communicating with your adviser, too. If your adviser makes a recommendation to change a portion of your financial plan or they have a specific question for you about your plan, be available to have that dialogue. The more information you are able to give your adviser, the better advice they'll be able to give you.
Opting to work with a financial adviser is an important investment to make. Taking the time to ensure you're providing your adviser with all the tools they need to will better ensure you're getting the most out of your relationship with your financial adviser.