10 Questions You Need to Be Asking Your Financial Advisor

10 Questions You Need to Be Asking Your Financial Advisor

May 3, 2021 All Articles Investments Retirement Taxes 0
Financial Advisor

Regulations often change and it’s no different with the regulations involving retirement accounts like IRAs, 401(k)s, and 403(b)s among others. Staying up to date on how these changes will affect your retirement accounts and your financial planning in general is an important aspect of maintaining your financial wellness. It may be a good idea to speak to someone who specific training in these types of accounts. Below are some questions to ask your advisor to help you ascertain if they have the expertise you are looking for:

  1. Are you a fiduciary advisor?
    Fiduciaries are required to act in your best interest. They must provide independent, conflict-free advice. Only a fiduciary advisor will be able to answer this question with a direct “yes.”
  2. What resources do you have to keep current with tax laws regarding retirement plans? Can you give me a list or examples?
    Credentials and licenses can mean nothing. A well-informed professional or advisor spends numerous hours on continuing education, keeping abreast of the changes within their industry and how they impact their clients.
  3. What was the most recent tax law change around retirement plans?
    The news is filled with proposed changes. What do you really need to know? What do you really need to be paying attention to? And, what are the actual laws now in place?
  4. What changes have you made in your advice regarding that tax law change?
    A well-informed professional or advisor is not only dedicated to keeping current with everything “retirement plans,” They are learning and devising strategies to help you and your family have the most success within the constraints of these laws.
  5. How do you navigate tax planning for each of your clients?
    Being a financial professional with retirement plans is one thing; however, it should go hand in hand with your overall tax planning. Often, this involves working with a tax planning consultant as well as your tax preparer (CPA or EA) if the expert is not one in the same.
  6. What courses have you taken, and which resources do you use, to keep current with how to make IRA and other retirement plan distributions?
    Although taxes are a critical component of your retirement assets, they are not the only component. This financial professional should be well-versed and well-experienced in how to best distribute these assets.
  7. How do you manage investments within an IRA or retirement plan and how do you get paid?
    There are three ways to make money on your retirement assets: lower taxes, lower fees, higher returns. Understanding the investments and how your financial professional gets paid to manage this money is essential.
  8. Does your investment process hedge the risk of the market going down as soon as I begin distributions?
    The sequence of investment returns can significantly impact your investment portfolio when taking distributions. It is important to manage this risk in retirement by maintaining sound asset allocation strategies, product diversification, and an understanding of how best to respond to changing market conditions.
  9. Can you tell us what will happen to our retirement accounts when we die?
    Beneficiary planning and tax planning in this area is best done with a team of professionals—a well-informed professional or advisor in regard to retirement plans, tax professional and an estate planner.
  10. How often will you review my overall plan to see if strategies need to change? What will the review entail?
    An annual review should occur and include assessing your unique situation, goals, family dynamics, feelings about risk and reward, as well as recommendations with regard to distribution, taxes minimization, investments, and beneficiaries.

Complexity can lead to confusion. Confusion can lead to inaction. Inaction can lead to lost dollars. Don’t let complexity cost you. Use these ten questions to help you find an individual you can trust to guide you in turning complexity into opportunity.


Securities offered through Calton & Associates, Inc. member FINRA and SIPC, a Registered Investment Adviser. Investment advisory services offered through Smart Money Group, LLC, a Registered Investment Adviser. Smart Money Group, LLC and Kennedy Financial Services, Inc. are not owned or controlled by Calton & Associates, Inc.