You should always be able to ask as many questions as you’d like when working with your financial advisor. So, before you have your annual review, think carefully about what you’d like to ask.
Here are a few suggestions: Are my goals still realistic? When you first began working with your financial advisor, you may well have articulated several financial goals. For example, you might have said that you wanted to pay for most of your children’s college education, or that you’d like to retire at age 55, or that you hope to travel internationally every year during retirement. In fact, you could have many different goals for which you’re saving and investing. When you meet with your financial advisor, you’ll certainly want to ask whether you’re still on track toward meeting these goals. If you are, you can continue with the financial strategies you’ve been following; but if you aren’t, you may need to adjust them. The same is true if your goals have changed. You and your financial advisor will want to build a strategy to address any new or different goals such as emergency cash needs, having adequate insurance protection or estate planning.
Am I taking on too much — or too little — risk? Put market declines in perspective. The financial markets always fluctuate, and these movements will affect the value of your investment portfolio. Suppose you watch the markets closely every day and track their impact on your investments. You may find yourself fretting over their value and wondering whether you’re taking on too much investment risk for your comfort level. Conversely, if during an extended period of market gains your own portfolio appears to be lagging, you might feel that you should be investing more aggressively, which entails greater risk. In any case, it’s important to consult with your financial advisor to determine your risk tolerance and use it as a guideline for making investment choices.
