5 questions to ask your financial advisor before the end of the year

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The end of the year is a time to give thanks and celebrate the holidays with our families. It’s also an opportunity to reevaluate the previous 12 months and ask your financial advisor some very productive questions.

1. What’s your investment decision process?

We often judge the merits of a decision by the outcome, when the process could be more important. If you were to outperform the market by throwing darts, that would be driven more by luck than skill and would not be repeatable over an extended period.

Instead, you should be just as interested in what method your advisor uses to build a portfolio as you are in the result. Do they use macroeconomic indicators to select asset classes or review the balance sheets of companies in search of a certain metric?

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Many investors lost significant capital in both 2001 and 2008 because their advisor lacked a repeatable process to make investment decisions in different economic conditions.

2. Should we do anything to mitigate my tax exposure?

3. What am I paying for that I’m not utilizing?

Sometimes I must remind clients that I can help them with other areas of their life because they’re so focused on the investments. A financial planner does more than invest your hard-earned money; we also provide estate, long-term care and education planning. Take advantage of all the services your advisor offers and maximize the relationship.

4. Am I on track to meet my goals?

5. Should we do anything different?

Your goals evolve over time, and that should change how an advisor manages your affairs. Did you have a life-changing event, find a new passion or experience a health event that requires a different approach?

There are times when clients choose to work longer in a lower-paying career that they find more rewarding. To the extent that you suffered losses in a retirement account, you’ll want to find out how that impacts your ability to retire while you still have time to adjust.

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