Since money doesn't grow on trees, when you hire and pay a financial advisor, you want to make sure you are getting the most out of the experience. While it can be easy to think that the advisor is the financial pro and that you'd better let him or her just do the job, it does pay to be proactive about your finances and about your relationship with an advisor. Don't just assume that what your advisor says is the best possible option. Go ahead and dig deeper to get the most out of your experience.
Ask Lots of Questions
When it comes to getting to know an advisor and what that advisor can do for you, there is no such thing as asking too many questions and no such thing as a dumb question. First, you want to ask questions to get a feel for the advisor's experience. Ask about his or her certifications and credentials, how long he or she has been in business, and the type of clients the advisor usually works with. Also, ask if the advisor has a clean record or if there has been any disciplinary action taken against him or her in the past.
Don't only ask questions the first time you meet with an advisor or during the "getting to know you" phase. If any concepts come up that you don't understand, ask the advisor what they mean or how they will benefit you.
Meet Regularly
You don't want an advisor who takes a hands-off approach to your finances. You'll get much more from the experience and will be able to see how your money is working (or not working) for you much better if you touch base with an advisor on a regular basis. You might meet monthly or quarterly, for instance, or your advisor might call you from time to time to check in. At some firms, you might not meet with the advisor regularly, but with a member of his or her team. As long as you know what's going on with your investments or at the advisor's firm, you won't be in the dark and will be able to get the most out of your experience.
Don't Feel Pressured to Take on More Risk
When you start working with an advisor, you might feel that since you have someone to hold your hand and help you figure out where to invest, that you can take on more risk than you would otherwise feel comfortable doing. Don't feel that you have to raise your risk tolerance to get the most out of working an advisor. In fact, the opposite is true. Your advisor should understand and respect your risk tolerance and put together a plan with it in mind.
Make Sure You Feel Comfortable
When working with a financial advisor, you are building a relationship. You want to develop a certain rapport with the person you work with, otherwise you won't feel comfortable going to him or her for financial help. If an advisor keeps interrupting you, won't answer questions, or just makes you feel uncomfortable in general, go ahead and find someone else to work with. You won't get much from the experience if you feel awkward around or just don't like the advisor.
