In my 25 years of financial consulting, what I have learned is that many financial professionals are not doing a thorough enough job collecting information and understanding a client’s complete situation before making their pitch. Often times these professionals are fishing for just enough information for them to make a pitch for an investment, insurance product or service.

It is important to understand that this is not how a wealth advisor or someone interested in actually creating a comprehensive financial plan for you does things.

In order to have an actual financial plan created, all of the information listed below has to be obtained in order for the person advising you to see the big picture of what you have going on and what you are trying to do. If the person you are working with is not asking these question, I would argue that you have gaps or omissions in your plan.

You see, it is possible to own investments, have savings and insurance policies without having a plan in place.  Having these things doesn’t mean that you have a plan.  You have just purchased products.

So, to help you out a bit, I have compiled my top 25 questions that I think your financial advisor should be asking you.  Now, I will say that these are not the only questions that should be asked.  Your situation and answers to these basic questions could lead to even more Q&A with your advisor.

Here are my top 25 questions:

  1. What amount of money do you need each YEAR to support your lifestyle?
  2. What is your income BEFORE taxes from each source? Is this w-2 or 1099 income? What is your occupation?
  3. What did you pay in taxes last year and the year before and are you receiving a refund?
  4. What BIG TICKET items do you need to purchase over the next 3-5 years?
  5. How are you tracking all of this? Spreadsheet, software?
  6. How much money have you saved and how much are you saving toward these purchases? Do you anticipate borrowing money to make these purchases?
  7. How much money do you have saved that IS NOT accounted for already?
  8. What is your target EMERGENCY FUND balance? How much DO YOU feel you should have for a rainy day?
  9. How much life insurance do you have OUTSIDE of work? What type? Premiums? Term? Face amount? Cash values?
  10. How much disability insurance do you have? Terms? Coverage amounts?
  11. How much long term care insurance do you have? Premiums? Term? Benefit amounts? Inflation protection?
  12. How much money do you have in INVESTMENTS? Company plans, IRA’s, trusts, annuities, alternatives, directly held, etc and how much are you contributing?
  13. How much money do you have in SAFER non-investments type accounts? CD’s, annuities, etc and how much are you contributing?
  14. Do you have UPDATED legal work in place? Trusts, power of attorney, health directives, wills, LLC’s?
  15. What do you owe on your home and what is it worth?
  16. What other debts do you have? Balances, Payments and terms?
  17. What are you trying to accomplish in life?
  18. At what age do you want to reach financial independence?
  19. What is your investment philosophy? How do you view risk?
  20. How much money are you willing to lose in the market?
  21. What is most important to you financially?
  22. Do you have children? Ages? Will you pay for their schooling? Do you have grandchildren?
  23. Are your parents still living and are they financially stable, have legal work and long term care covered?
  24. Do you have siblings and are they financially stable?
  25. Do you understand the difference between an investment advisor, insurance agent, financial planner and wealth advisor?

Again, if your advisor is not seeking information in all of these areas, I would suggest asking them why they aren’t inquiring about these things.  Chances are they do not work in these areas and have not taken the time to build other professional resources around them to assist you.

They may also not have enough experience helping people through different life events to understand the relevance of some of the questions.  Sometimes it is a situation of the advisor only knowing what they know which can leave gaps in your planning.

If you have a question about what you have read here today let me know.  I get questions about this and other money related topics all of the time and am happy to try to point you in the right direction.

Good Luck!
Brian


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The opinions in the preceding commentary are as of the date of publication and are subject to change. Information has been obtained from a third party sources we consider reliable, but we do not guarantee the facts cited are accurate or complete. This material is not intended to be relied upon as a forecast or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. We may execute transactions in securities that may not be consistent with the report’s conclusions. Investors should consult their financial advisor on the strategy best for them. Past performance is no guarantee of future results.