How to Get the Most from Your Financial Advisor – Part 1 of 2
By Stephen Sutherland, author of Liquid Millionaire.Posted in the Category of Investing, Stock Market, Wealth Building, Financial Advice on 25th November, 2009.
Tags: financial advisors, financial services.
How to Make Sure Your Financial Advisor is Helping Not Hurting
The biggest problem that people have regarding the financial services industry is whether they can trust their financial advisors.
People simple don’t trust financial advisers.
If you currently have an adviser, and you are unsure whether they are hurting or helping, and whether they have your best interests at heart, then this two part series of blogs is for you.
Today and on Friday I will provide you with a series of questions to ask your advisor in order to ensure they are providing you with the best possible service.
Intelligent Questions to Ask Your Financial Adviser
Question 1
Do you invest in Stocks and Shares ISAs and can you tell me about your personal track record versus the market over the long-term please? –For example, have you beaten the FTSE 100 or the Nasdaq Composite?
When they answer don’t be surprised if you discover that your adviser doesn’t personally invest in Stocks and Shares ISAs.
This is a flag. If they don’t, by listening to their advice, you could be heading for trouble. How can you take their advice seriously if they don’t do it themselves?
Secondly, if they do have a Stocks and Shares ISA account, ask them how they performed each year compared to the FTSE 100 and the Nasdaq Composite. You want to check to see if they’ve beaten the FTSE 100 and the Nasdaq Composite over the long-term. Once again, do not be surprised if they do not have records of how well they have done.
Question 2
Right now, is the market healthy? - Based on what?
Their answer to this question will tell you if they understand market health and direction. Ideally you want them to give you a concrete answer such as, “Yes, it’s healthy. The market is in a confirmed uptrend which means that you should be invested in the highest quality funds right now. My reasons for saying that the market is healthy are as follows….” Or, “No, it’s not healthy. Right now, the trend is confirmed down which means you are going to be better off in a cash-based fund such as Fidelity’s ISA Cash Park.”
Question 3
If the market is healthy, what should I be investing in? - Why?
When the market is healthy (in a confirmed uptrend), your job is to find the highest quality investment funds. This means if your adviser is saying it is healthy, the fund or funds they suggest you invest in should be funds that have proved they are worthy of merit.
Question 4
Are you personally invested in this fund or funds?
Ideally you’ll want them to be answering “yes” to this question. Once again, how can you take their advice seriously if they don’t do it themselves?
Find Out More
In Friday’s blog I will be giving you the remaining crucial questions to ask your financial advisor. In the mean time if you would like any further information about how to get the most from your advisor please contact a member of my team for a chat.
Your friend,
Stephen Sutherland
The UK’s Leading Authority in ISA Trend Investing and Author of Liquid Millionaire
Please Note: As always, let me remind you that I am not a financial adviser and therefore not authorised to give advice on what investments to buy or sell.
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