The best financial advisors are prepared to deliver comprehensive recommendations and personalized advice. That means they’re not just looking at your portfolio, but at your entire financial picture. It also means they’re changing the dialogue at different stages of your life—when certain topics become more or less important.
For younger families, household budgeting looms large. For those heading into retirement, security is top of mind. In between these stages, you’ll make thousands of money-related decisions that may seem minor or isolated, but actually do play a role in your broad financial plan.
Whether you’re already working with a local financial advisor, or you’re still looking for the right personality fit, here are some questions that shouldn’t go by the boards:
1. How should I handle my credit card debt?
Together with your advisor, you should address debt early and often, especially heading into retirement, because it’s part of your balance sheet. Your advisor can help you outline spending priorities, and make a plan to pay down high-interest debt.
2. Should I buy a new car?
According to an Edmunds.com study, car lease agreements are up 41 percent over the past five years, with Millennials leading the charge to lease vehicles versus buy them. If you’re inclined to trade up for a new car every couple of years, it probably makes sense to lease. But there are some factors worth discussing with an advisor—including lease terms and financing (if you choose to buy).
3. Should I pay off my mortgage?
Believe it or not there are some good reasons not to pay off your mortgage before you retire. But they don’t make sense for every family. If you have a low interest rate and you’re getting a tax break on mortgage interest, you may want to keep up that monthly payment. An advisor can run the different scenarios for you.
4. Should I make a career change?
Too often clients assume their financial advisor is only interested in how to spend, save, and grow money. In truth, good advisors are equally invested in how you earn money, which means helping you compare and contrast different employment opportunities as they come along.
5. Should I give my child money?
All parents hope to see their kids thrive. But opinions differ on when to cut children off financially, in terms of adult allowances, a fifth or sixth year at college, seed money for businesses, etc. Financial advisors can serve as moderators for these conversations—ensuring that both perspectives are equally weighed and offering advice on when helping your kids begins to hinder your personal goals.
6. I’m getting remarried. What do I need to know?
Often clients sit down with their advisors after a milestone event like divorce or remarriage. But it makes sense to be proactive. Your advisor will map out the different decisions you need to make—protecting your assets and providing for children—so you can have important conversations sooner rather than later.
7. We’re adopting a child. What do we need to know?
U.S. families participated in more than 260,000 intercountry adoptions last year, with many more adopting children in the United States or working with surrogates to grow their families. If you’re exploring one of these paths, it’s important to take a clear look at all the financial considerations first. Do you have adequate funds set aside for the adoption process? Do your wills need to be updated? Do you need more life insurance? Your best bet is to sit down with a financial advisor who has helped other families adopt.
8. We’re relocating. Are we making the right move?
Choosing the ideal place to enjoy your retirement isn’t as simple as picking a scenic spot along the coastline or in the mountains. You should be asking if it’s tax advantageous to move to your desired locale. A lot of Pennsylvania natives, for example, have been saving in 401(k) accounts whereby the money goes in after PA taxes (i.e. the accounts are federally tax deferred but not state deferred). If these families were to relocate to the Jersey Shore, their retirement income would also get taxed coming out, by the state of New Jersey. So don’t start the property hunt until you’ve talked to your advisor.
9. What type of life insurance should I get, and how much do I need?
You may have heard the old rule of thumb that you should be insured for no less than ten times your annual income. But “no less than” only gets you halfway to an answer. The truth is there are no quick formulas to determine how much insurance your family needs. Instead, you need to have a conversation with your financial advisor so you don’t get oversold or undersold by an insurance agent who doesn’t know your goals.
10. Will you talk to my CPA about __________?
A lot of wealth management questions overlap with legal or accounting terrain. For example, you might have questions like:
- Should I make a nondeductible IRA contribution?
- Should I take a lump sum rollover from my pension?
- Should I make a charitable contribution using cash or appreciated securities?
An independent fiduciary wealth advisor will be willing to work collaboratively with the various professionals in your life, to explore the pros and cons of different strategies, and to support positive outcomes.
At the end of the day, regular communication is the golden rule. When your financial advisor is attuned to your entire financial picture, he or she can anticipate questions and issues that maybe aren’t on your radar—but should be.