Published July 28, 2017
A financial advisor’s basic duty is to ask the client questions, gather financial data, and ultimately design a plan that meets the financial needs and obligations of the client.
But the key component necessary to being a proactive and competent financial advisor is the continued dedication to making adjustments to a client’s financial strategy in response to life-changing situations.
The reality is that your wealth manager should be asking key questions to determine what stage of life you are in today and what major events are taking place in the near future in order to make the proper recommendations to adjust your ongoing financial plan.
How to Recognize a Proactive Financial Advisor
You need to reflect on the relationship you have with your advisor.
How often do you and your advisor meet or speak on the phone?
Is your advisor asking questions about your life and your goals, or is he/she selling you on ways to invest your money?
Is your advisor charging you transaction commissions, or is he/she managing your accounts on a discretionary basis and charging a quarterly or annual fee?
Is your advisor asking about your budget and your projected cash flow needs?
You most likely have a proactive advisor if you are being asked the more in-depth questions, such as:
“What itemized deductions did you take on your tax return?”
“Where do you want to live in retirement?”
“Have you executed documents for your wills and properly assigned beneficiaries on all of your accounts?”
“Do you want to take your pension as a lump sum or in the form of an annuity?”
“Are you maximizing the use of all of your corporate benefit plans?”
“Are you earmarking the funds that will be used first during retirement in order to minimize taxes throughout your retirement years?”
How to Know If a Financial Advisor is Reactive vs. Proactive
If your advisor is only asking you the baseline questions, such as, “When are you retiring?” or “Do you have insurance?” and waiting for you to ask the deeper questions, then you most likely have a reactive advisor. This means that you are responsible for asking the important questions that yield changes in your investment strategy and financial priorities.
At Willis Johnson & Associates, we hope and strive for the best by anticipating life-changing situations. When we map out multiple scenarios for our clients, their risk exposure may be mitigated if an unexpected life change were to come about. Our firm takes pride in what we do and our advisors have the ability and the skill set to assist our clients in so many facets of their lives. If you feel that your financial planning and investment needs are not being met, or are interested in finding a proactive advisor, please reach out to us so that we can help you plan out your unique and customized plan.
President and CEO