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The only 6 questions you need to ask when choosing who manages your money

By Sam Instone - June 21, 2023

Buying a new car this year?

You’ve probably been researching since about January.

Petrol or Hybrid...

BMW or Toyota...Add to this the questions, showroom visits, reading online articles, test drives – all for a car you'll likely drive for 3 or 4 years, and that will depreciate in value.

It's something to consider when deciding who to trust to manage your money, your future, and ensure you and your family are going to be okay.

Choosing your financial guide is one of the most important decisions you’ll ever make - it can make a profound difference upon life's trajectory. Hoping they have the answers isn’t enough, you need to be absolutely clear about the questions you need to ask.

Let's image you're now in a room with a person you’ve never met. A prospective adviser.

This meeting will define the course of your future.

You can ask six questions, what should they be?

1. What’s your investment philosophy?

Another way of saying this, is ‘are you right for me?’

It matters because a good, professional adviser will step back if you’re not a good fit for each other (where a lesser one may just take the business).

Ask about their investment philosophy and the principles that underpin it. If you agree, great – but you don’t have to.

2. What does financial planning mean?

It’s a relationship and a long one at that.

Your relationship with your financial adviser is a long-term commitment that may even last beyond your lifetime. It's important to understand how they see this potentially lifelong, problem-solving, possibility-capturing partnership in the years and decades to come.

Will they update your long-term financial plan each year so you stay on track, maintaining focus on your financial and life goals and adapting to any changes in your life?

3. What’s your succession plan?

A long relationship needs a succession plan in place. Will someone else be able to step in and continue working towards your financial goals with the same level of understanding and expertise, should something happen to this adviser? 

4. Will you always act in my best interests?

If a friend neglects to tell you that your jumper is on inside out, they probably want to spare your feelings. But if you then go out and address a roomful of people at a conference, your friend’s good intentions didn't help you at all.

It’s not easy to be candid with people, but a good adviser will be. Telling uncomfortable truths about your money, instead of comforting lies, is part of the role of a fiduciary. A certified fiduciary is the only way to get advice that's unconflicted (because conflicts do exist).

You need to know your adviser will celebrate your successes, but also tell you when you’re wrong. 

5. What does everyone else think?

When you’re planning your future it absolutely doesn’t matter what everyone else thinks – they’re your goals, dreams and aspirations.

But when you’re choosing your adviser, it’s important to learn about existing clients who are enjoying the experience of working with them.

A good adviser will happily share these, and relish being asked.

6. What are your fees?

There’s no point in avoiding this question - and good advisers feel the same. Transparency is key.

All aggregated fees are essential to know and get in writing. Get it out of the way early and enjoy a healthy and respectful relationship in the future. Remember that cheap parachutes, fire extinguishers and brain surgery aren't always the best option. No one also likes to overpay. But what's fair and represents good value to you? 

A meeting of minds

Appointing someone to manage your money and help plan your future can be daunting, but it's important if you want clarity, confidence and control.

It's not about trying to outsmart the person across the desk from you, but rather finding a partner who will be by your side along your journey.

Think of it like a sherpa; a trusted guide who assists you in reaching your financial summit, providing support, knowledge, navigation, sage advice, wise counsel, and motivation along the way.

Of course, the reality is that you’re free to ask your potential adviser as many questions as you like.

It’s crucial that you feel comfortable with them, so the more you talk, the more you’ll come to understand what makes them tick.

But time-poor people often do little or no research before meeting a financial adviser. The result is having to trust your gut instinct to make a decision. This is normally the worst way, as charismatic salespeople with hidden conflicts prey upon the 'personal relationship'.

Boiling it down to six key questions is an exercise in discipline.

Remember, this meeting will define the course of your future and the outcome depends on the questions you're going to ask.

If you don't find the “one”, the search for a great financial adviser must continue.

Save and invest for a better life