TLDR; I'm meeting my financial advisor for the first time and want to know what to ask so I best understand the account and management of it.
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When I (32f) was young, my grandmother set up an account for me with a couple thousand dollars and my mother told me about it around college time. My mother recommended that I don't touch it and it could be used for a big purchase one day. I haven't touched it besides maybe twice for smaller withdrawals, and it's grown to 180k now.
This whole time, I've never once talked to the person managing it. Now that I am taking more interest in my finances, I want to make sure this is the right setup for me. I've arranged to meet with the advisor in two days.
I'm wondering what questions I should ask the advisor. What would be important to assess the benefit of keeping that money in this account versus putting it somewhere else?
I'm not super literate with financial terminology, and still building up my confidence of managing that much money independently. I currently use Betterment for my other investment accounts.
Here's my outline so far:
– Description of account, why some is classified investments and some "other" (which I think means cash)
\- Fees involved; all-in cost for the account each year
\- My portfolio's returns and what I can compare that to
\- What benefits do I have keeping it here vs. putting it in a low cost index fund
\- Tax implications if I were to move it somewhere else
Thanks in advance!
Questions for my financial advisor managing investments
byu/mdwespam inpersonalfinance
Posted by mdwespam
2 Comments
Is the financial advisor a fiduciary, otherwise legally obligated to operate in your best interest?
That is a pretty good list, but do not ask the advisor what to compare it to.
Just compare it to the S&P500.
There is a 99% chance it will go 1 of 3 ways, if they are actively managing it.
1. They have outperformed the S&P500, in which case you have found a 1 in 100 advisor.
2. They have underperformed agasint the S&P500, in which case you should take it and invest it in the S&P yourself.
3. They have invested it in the S&P500, and are taking a fee, in which case you should take it and invest it in the S&P yourself.
Advisors can be worthwhile, especially for those who are just beginning or don’t know a lot. But they can also be absolute rip offs. Start with your questions, and report back.