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Health & Fitness

Is Your Financial Professional Delivering What You Need?

Evaluate if your financial advisor is doing a good job for you by asking these three questions.

Let’s face it: if you’re like most investors, every once in a while you wonder if your financial advisor is doing a good job for you, specifically whether or not he or she is making you enough money.

That’s a question that can be very hard to answer, because your returns are influenced by a number of factors such as the economy, market conditions and your comfort with risk.

A better question to ask is whether your advisor is helping to improve your overall financial well-being. When answering this question, consider whether he or she has:

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  • Helped you define your goals and create a strategy to achieve them. Regardless of whether you are young, middle age, nearing or in retirement, a good financial advisor will take time to ask questions and identify your dreams for the future and then implement a plan to help you reach them. If your advisor hasn’t taken time for this step, find someone who will. You can’t get to where you financially want to be if you don’t know where you are going.
  • Recommended appropriate investments based on your goals, risk tolerance and time horizon. Of course, you need to hold your financial advisor accountable for any investment recommendations. However, the return isn’t the only measure of success. You also need to consider whether the recommendations are in line with your investment strategy and what you are trying to achieve.
    For example, as you near or enter retirement you may prefer to move toward more conservative investments. If so, you’re less likely to experience the returns that may come with higher-risk investments. On the flip side, you’re less likely to experience more extreme losses.
  • Charged a reasonable amount for his or her services. Your financial advisor should be willing to give you a breakdown of all fees in writing so that you can assess the actual cost of the services you’re receiving.
    If you feel that the fees are too high, determine what you would have to pay another advisor for comparable investments and services. Keep in mind that this evaluation may be more difficult because it’s subjective and different financial professionals may offer different levels of quality and service.
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