3 Questions to ask your Financial Advisor
A good Financial Advisor plays a critical role in your fiscal wellbeing, much like a physical trainer does with respect to your health! Chosen wisely, a good Financial Advisor can ensure that you avoid common money-related pitfalls, ensure that your key bases are well-covered, and see to it that you’ve got the right amount of money available at the right time. Here are three questions you need to ask your Financial Advisor – today.
Am I on Track to Achieve my Goals?
The merits of Goal Based Financial Planning have been well documented. Simply investing money on and off, in an ad hoc manner, will have very limited efficiency in the long run. Your Financial Advisor should be able to help you set up a robust goal-based Financial Plan, which is both realistic and challenging, and which details your meaningful life-milestones. If you’re currently off-track, your Financial Advisor can advise you on the necessary course correction measures to take; which may include cutting lifestyle spends, saving in more aggressive assets, or other action points.
Am I Adequately Covered on the Risk Management Front?
Risk Management is an oft-ignored aspect of Financial Planning. As Human Beings, we tend to nurture the belief that low probability outcomes (such as an accident, a serious illness, or even premature death) can only happen to “other people”. As a result, many people end up getting wiped out when catastrophic events occur in their lives. Ask your Financial Advisor if you’re adequately covered in terms of Term Coverage and Health Insurance Coverage. Go a step beyond and understand if your specifics dictate the need for other coverages such as critical illness or personal accident.
Do I Have ‘duds’ in My Portfolio?
As the years roll by, it’s quite common for investors to pile on ‘duds’ in their portfolio. These investments will likely never go on to create value in their lives – a poor stock pick, an opaque life insurance plan, or even an NFO that never really took off. Collate a comprehensive list of all your holdings and put your Financial Advisor to work to weed out the ones that require pruning.