How to Work with an Adviser
From The Truth About Money, Part XIII – How to Choose a Financial Adviser.
Working with a financial adviser should be an enjoyable experience. It should not be adversarial or uncomfortable. You should look forward to talking to your adviser. Upcoming contact should not be anticipated with dread.
If you choose your adviser well, he or she should become an important part of your life, and you should be together for a lifetime. After all, financial planning is a lifelong activity, and a good adviser can help make the process both fun and profitable for you.
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How Often Should You Talk with Your Adviser?
It might sound obvious (and I hope it does): You should email, talk, or meet with your adviser as often as necessary. For some people, that could mean weekly. For others, a once-a-year phone call is sufficient. As with physicians, the sicker the patient, the more frequent the contact.
You should always contact your financial adviser before you make any financial decision. Whether it's buying a house or car, selecting a college, or choosing employee benefits at work, you should talk to your adviser about the issue at hand. The worst question to ask an adviser is, "Did I do the right thing?"
Remember, you might be experiencing a situation for the first time, but your adviser has seen it hundreds of times.
Six Reasons to Talk to Your Adviser
Reason #1: You or a member of your family has experienced a major change in health.
Health changes might affect your income, expenses, and insurance, as well as your long-term retirement and estate plans. Find out the options available to you.
Reason #2: You're thinking of buying or selling a home or refinancing your current mortgage.
This calls for a complete review of your entire debt structure. The transactions must be viewed with the rest of your personal finances in mind.
Reason #3: You've lost your job, or think you might lose it soon.
Your adviser can help you determine the best way to pay your expenses while your career is in transition. Health and life insurance issues and retirement account rollovers also need to be addressed.
Reason #4: You're thinking about retiring soon.
If you've decided that retirement is not far away, it's time to pay attention to your investment portfolio, long-term care insurance, the income and expense needs of your lifestyle, Social Security, health insurance coverage, and much more.
Reason #5: Children or grandchildren are on the way.
It's time to review beneficiary designations, along with updates to your insurance, college, and estate plans.
Reason #6: Your marital status might soon change.
Whether you're about to become single or married, this momentous event affects how you title investments; choose beneficiaries to IRAs, annuities, retirement accounts, and life insurance; wills and trusts; tax strategies; and a myriad of other issues.
Your adviser's job is to apply his or her experience and knowledge to your entire financial situation so that each part of your financial life is operating at its best. Because each decision affects other aspects of your finances, it's important to maintain a holistic approach.
Yet, sometimes, what might seem (to you) to be a simple matter could have major consequences.
Always talk to your adviser before you act and as soon as you believe a financial or lifestyle change or decision is about to occur.