5 questions financial advisors get from clients—and why they’re important
From retirement planning to life’s unexpected expenses, here are some examples of what’s on the clients' minds and how advisors typically respond.
A financial advisor who actively listens to your concerns and addresses your questions is key to helping you invest in your dreams. So, what are clients asking, exactly? Below are five common questions financial advisors field, along with their answers, that could shed light on how an advisor can help you pursue your goals.
When can I retire?
This might be the most common first question clients ask their advisors when they meet, especially in times of market fluctuation. Everyone wants to know whether they’re on track to achieve the retirement goals they’ve set. If you don’t yet have a long-term financial plan, that’s the first step. It will map out what steps you may need to take to reach specific retirement goals.
There’s more, however. You and your advisor may need to fine-tune your plan when you modify your goals, you have a life event or market conditions change. Financial advisors can run sample scenarios to show you how changes in the market could impact your ability to retire at a certain time, as well as how changes to your plan may help you retire earlier than you expected.
What can an advisor do for me?
Effective financial advisors offer more than just investment guidance. They’re also a trusted long-term partner, helping you navigate complicated financial matters and major life milestones successfully, so you can stay on course toward pursuing your dreams. An advisor can be an unbiased sounding board, helping to keep you from making investment decisions that may put your long-term plan at risk.
Advisors know everyone’s situation, goals and stages of life are different. If you just got married or are looking to buy a house, your investment and financial goals will be different than if you are nearing retirement. The best financial advisors take the time and effort to get to know you, including your unique dreams and aspirations, your family and your financial goals. They take a holistic view of what’s going on in your life at any given time, and that view goes beyond just dollars and cents. This ultimately helps an advisor identify strengths and weaknesses in your investment plan.
What is the right mix of investments for me as my life changes?
There isn’t a one-size-fits-all answer, but it’s important to have a portfolio with a diversified mix of investments. Different types of investments carry different levels of risk. That means they may have larger fluctuations and carry different potential for returns. Though one investment may not perform well at a specific time, another could prove fruitful—even in a down market.1
Your specific investment mix will also be influenced by your investing time frame, as well as your current circumstances. If you’re closer to retirement and have already built up a significant amount of assets, you may want to be a little more conservative to try to protect what you’ve earned, although all investments carry some level of risk. If you’re earlier in your investment time frame and you have many years until retirement, you may want to take on some additional risk for the chance of potentially larger returns.
Don’t forget that the right mix of assets may change as your life changes, and an advisor may be able to help you look at your goals with a holistic view of how you’re tracking. A financial advisor can help you develop a plan for your short- and long-term goals—or adjust your current plan—for the investment mix that can help you best pursue your goals.
Is there anything else I should consider?
Whether or not you already have a written financial plan, chances are you have ideas about your goals and what’s important to you. However, an advisor can help you with certain strategies or nuances that may not be at the top of your mind. Some of these may include:
- Paying for healthcare, which is one of the largest expenses for retirees
- Determining when to start claiming Social Security
- Considering other sources of guaranteed income to supplement your Social Security to help ensure you don’t outlive your income
- Communicating your estate plan to your children via a family meeting
- Managing your required minimum distributions to avoid penalties, minimize taxes and protect growth opportunities
How often should we be meeting?
You might have heard the myth that you’ll only get a once-a-year obligatory phone call after becoming a client. The truth is, the cadence of your meetings and check-ins is often up to you. An annual meeting is a good starting point to help keep your advisor apprised of any changes in your life situation or financial goals. But in times of volatility, or when a major change happens in your life, such as a new job, it may be worth reaching out to your advisor to discuss any potential impact on your plan.
No matter what questions you may have about your financial situation, a financial advisor can help you take the next step. A financial plan can help you prioritize your various goals and determine a strategy to pursue them. This may ultimately make you feel more confident as you move forward.
1Diversification is a technique to help reduce risk. There is no guarantee that diversification will protect against a loss of income.
This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances. Please consult your financial or tax professional before taking any action.
Advisory services are provided by Advice & Planning Services, a division of TIAA-CREF Individual & Institutional Services, LLC, a registered investment adviser.