When we go to the doctor, we are all used to hearing those basic questions that they start their check-ups with: “Do you drink?… Do you smoke?… How much exercise do you get a week?… Are you experiencing any pain?” Those questions, although simple, are critical to doctors. They use those questions to establish a baseline for how they will conduct the rest of the appointment and their advice and recommendations moving forward. An appointment with your financial planner works the same way.
There are specific things about your life, your spending habits, and your future plans that are critical to the plan that your advisor will lay out for you.
Your visit can be a lot more effective, and a lot more comfortable, if you know these basics ahead of time. In order to be prepared for your visit with a financial planner, make sure you think about these five points before you walk through the door.
Future Goals: It’s impossible to create a successful plan of action for your future if it’s not clear what that future looks like. Be prepared to give specifics of where you want to be, and what you would like to accomplish with your finances in the years ahead. Is there a target figure you want for retirement? Do you want to be able to finance your kids’ college education? These goals can be just a few years down the road or decades into the future, but be prepared to give a clear picture of what you are looking for.
Present Income: Once the future is laid out, it’s critical to nail down what your current situation is. Before an advisor can work out a plan moving forward, they need to know what you have to work with now. Be prepared to give a realistic account of your total current assets. Be honest about what you are bringing in now in terms of cash flow as well as how you expect that cash flow to change in future. If you know a raise is coming, or if you are at risk of possibly losing your job, these are thing that your financial planner needs to know. The appropriateness of any investment vehicle they suggest is based greatly on what you have now, and what you expect to have moving forward.
Budget Practices: The first part of this is: Do you have a formal budget in terms of your household’s cash flow? If the answer is no, creating one is probably the first step. If you do have one, it’s important that you lay out your budget for your advisor so they know what cash you have available to invest each month. They can’t put together a plan for you to put $500 a month in a specific investment if you don’t have the $500 available to invest. Be straightforward and honest with your planner so that they can be straightforward and honest about what plans and steps are right for you.
Division of Roles: In other words: how involved do you want to be in the process? Most financial planners send out a quarterly report for their clients, but if four updates a year isn’t enough, discuss this. Especially if you are going into the appointment as a married couple, lay out who will be staying in contact and getting updates on the progress and growth of the investments. Do you prefer email or phone for the form of contact? What times of the day are you available to chat? Be clear about what type of involvement you want in the planning process and how you want that involvement to be carried out.
Questions or Concerns: This discovery process to clear up the basics in your meeting is a two way street. Make sure that you have a list of questions or concerns you may have with the planning process and your financial future, and feel free to ask them in your appointment. The success of your relationship with your financial advisor is largely based on understanding, comfort and transparency. Make sure to be honest and voice your concerns or ask them to explain something that you don’t particularly understand. Any question that you don’t ask them then is a question you will be asking yourself later as you lay awake at night wishing you knew the answer.
Making an appointment with an advisor is a critical step in your financial planning process. Often times, it’s a wakeup call for future investors as they see where they stand now, and where they could stand down the road. By being prepared and knowing the important questions going in, you can make the appointment go smoothly for both you and your advisor. The meeting could seem like a small step for you now, but it could be a giant leap for your finances in the future.
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