From time-to-time, the AT Law Blog will be spotlighting posts that we think are relevant to our readers that come from other professionals we know and trust.
This one comes from Christopher R. Manske, CFP®, who leads a disciplined and well-credentialed team providing sophisticated wealth management and individualized investment advice. His co-author, Jordan Fandry, is a participant in a leadership seminar sponsored by Manske Wealth Management as she completes her tenure at the University of Houston.
So you’ve hired an investment professional. Now you want to engage with them meaningfully about your portfolio and how it supports your goals. Here are five excellent questions to help you participate beyond simply looking at your monthly statement.
1.What is my risk level and why?
This is referred to as your risk profile, and it is the label that is most dependent on your time horizon (how long you have to invest) and the amount of loss you can endure. There is no “one size fits all” answer because your time horizon is unique to you. It may be dependent on how close you are to retirement or how many years until your child attends college.
2. What goals are the most important?
Consider the following: why do you want to invest and does your Financial Advisor understand that? Are you saving for retirement or for your child’s education? Do you wish to make an impact with a particular charity? If it’s obvious to you what you wish to accomplish, then it should be just as clear to your Financial Advisor.
3. How am I diversified?
Properly diversifying your portfolio has been shown to lower risk and increase return over time. This can be an interesting discussion that will take into consideration the answers to many of the other questions listed here.
4. What fees am I paying?
A Financial Advisor is paid in two basic ways: commissions or fees. A financial planner can be paid in three ways: commissions, fees, or charging by the hour. It’s likely, you’re aware of which method your Financial Advisor uses. But what are the actual fees?
5. How are things going for you?
The most successful advisor-client relationships are a two-way street in which both parties enjoy talking with one another. A Financial Advisor can have excellent, well-thought-out advice… but without a trusting relationship, it’s difficult to deliver it in an effective and meaningful manner.
In an industry where clients often lament the lack of regular contact from their advisory team, Manske Wealth Management is set apart from the rest of Wall Street by its slogan: Every Client, Every Month.TM Click here to learn more about Manske Wealth Management.
Become Your Own Financial Advisor – Jean Folger for Investopedia – February 2017.
Investment Due Diligence: Five Essential Questions. Sako & Wallace for Financial Mentor – September 2016.
Determining Risk And The Risk Pyramid. Investopedia Staff – October 2013.
Patience Is A Trader’s Virtue. Hans Wagner for Investopedia – December 2006.
How Fees & Expenses Affect Your Investment Portfolio – SEC Publication No. 164 – February 2014.