When you're trying to build your nest egg, make some wise investments, and better manage your money, bringing in a professional is one of the best decisions you can make. Hiring an advisor can take your portfolio from ordinary to unstoppable.
But what questions should you have for them? Read on to figure out what questions and points of information you should have ready when you reach out to a financial advisor.
1. Ask Them About 401k Retirement Accounts
You have to put your retirement plans together if you want to handle your finances. Today, the 401k is a standard-bearer for retirement options.
When you understand 401k benefits and how they come into play, it's easier to plan for your retirement.
People deposit money into 401k accounts because of the tax benefits and the ability to withdraw for home purchases. These accounts give you the chance to grow your nest egg at higher interest return rates over the years.
2. Look Into Stocks, Bonds and Mutual Funds
Consider the different stock and bond opportunities that a financial advisor can point you toward.
They can help you navigate the markets, including the NASDAQ, New York Stock Exchange (NYSE), and other international exchanges.
Financial advisors can help you stay on top of the hottest stocks at the moment, and figure out which ones should serve as long-term picks. Think about these investments and their histories and studies taking place in those industries at the moment and in the future.
If the stock market has you skittish, your financial advisor can point you toward mutual funds. As opposed to just relying on single stocks, mutual funds include a combination of several different stocks, bonds, and other securities.
Your advisor can explain the differences between index funds and managed mutual funds.
They'll also give you a breakdown of the fees that you'll pay for these accounts and what sorts of minimum investments you should expect.
3. Have Them Audit Your Current Finances and the Way They're Organized
A financial advisor will truly earn their keep when it comes time to creating a financial plan for you. They'll start by auditing your current financial situation and helping you figure out what systems you should put into place.
For instance, they can help you pinpoint areas of excessive spending and create a budget for you. They'll explain how you can allocate your money toward the different goals in your life and can check in with you regularly to make sure your finances are taken care of.
4. Find Out How Much They Charge in Fees
Having a financial advisor is like a marriage in a lot of ways. You're trusting them with your future and your closest held assets while relying on their advice for what to do with it.
Be sure to ask your financial advisor how much they charge and what kind of rate structure they stick to. Many advisors charge about a 1% fee, which accounts for a percentage that they keep from all of your portfolios that is under their management.
Some advisors may also charge a transactional fee for investments that they help you make. The cost of your financial advisor is a crucial part of the relationship so that you're able to still enjoy the profits that they help you bring in.
5. Seek Information About Various IRA Accounts
When you want an option outside of the traditional 401k, ask your advisor about the various individual retirement account (IRA) options.
A lot of details go into running an IRA account, so it's important that you do your research. Investors appreciate IRA accounts because they can receive annual tax deductions, more flexibility with withdrawals, and the ability to use it as a catch-all for the other bank accounts that you run.
Consider a traditional IRA or Roth IRA depending on what retirement needs you to have.
6. Learn About How You Can Strengthen and Diversify Your Portfolio
It's important that you ask your advisor about the diversity they can add to your investments.
A quality advisor will help you find commodities such as gold and silver, real estate investment trusts (REITs) and exchange-traded funds (ETFs). They can also help you learn about getting directly into real estate, whether you're into flips or rental properties.
Financial advisors are especially helpful at helping you get into international investments and complex investments that will allow you to diversify.
7. Determine How They Can Assist You With Debt Issues
Managing your debt is another crucial piece of the financial puzzle. Ask financial advisors about how they can help you get out of debt.
Whether you seek a debt consolidation loan, ask for more time to settle your balances, or get a game plan for paying off your debts productively, a financial advisor can assist you.
When you become debt free you'll keep every dollar that you earn and can set aside money for future generations.
Assess the specialty of your financial advisor to see what kind of matters they're most likely to help you with.
Look for a Financial Advisor to Help You Long-Term
Leaning on the help of a financial advisor can help you more than you know. These are the professionals that can assist you when you're looking to grow your financial portfolio by leaps and bounds.
When you touch base with a financial advisor that can help you out, you can build wealth on your terms. Reach out to us on the web or give a call or text at (202)900-9925.