Are You Getting the Most From Your Financial Advisor?
When you meet with your financial advisor, what do you spend most of your time talking about?
For many investors, the conversation centers on one thing: portfolio performance. How did my investments perform since our last meeting? Did I beat the market? What happened this quarter?
Your portfolio plays an important role in your financial plan, and understanding how your investments are performing is worthwhile. But your financial life is much bigger than your investment account.
A productive relationship with a financial advisor should give you an opportunity to regularly look at the full picture: where you are today, what has changed, where you want to go, and whether your financial strategy still supports those goals.
Here are some of the conversations you may want to be having with your advisor.
1. What Has Changed in Your Life?
A financial plan is built around your life, and life rarely stays exactly the same.
Marriage, divorce, the birth or adoption of a child, a new job, retirement, an inheritance, the death of a loved one, the purchase of a home, or a change in your health can all affect your financial priorities.
Even changes that seem relatively small can create a reason to revisit your plan.
For example, a job change may affect your:
Income and monthly cash flow
Retirement plan options
Insurance coverage
Stock compensation
Tax situation
Savings strategy
Regular conversations with your advisor create an opportunity to catch these changes and determine whether anything in your financial plan should be updated as a result.
2. Have Your Goals Changed?
Financial planning starts with understanding what you are working toward.
Retirement may be the biggest long-term goal, but it is rarely the only one. You may also be saving for a home, helping children or grandchildren with education, starting a business, planning for major travel, supporting aging parents, making charitable gifts, or thinking about the legacy you want to leave behind.
And those priorities can change over time.
A goal that felt important five years ago may matter less today. Another goal may have become much more important.
Your advisor should understand those changes and help you evaluate whether your current financial strategy still reflects the life you are trying to build.
3. Are You Still on Track?
Creating a financial plan once is only the beginning.
Change happens, and that’s why the financial plan itself should be revisited periodically.
A planning conversation might include questions such as:
Are you saving enough for retirement?
Is your anticipated retirement date still realistic?
How much income might you need in retirement?
Are you adequately funding other major goals?
Has your risk tolerance changed?
Do any assumptions in your financial plan need to be updated?
These conversations provide much more context than looking at an investment return in isolation.
4. Does Your Insurance Coverage Still Fit Your Needs?
Risk management is another important part of financial planning.
Insurance needs can change significantly throughout your life. A policy that made sense when you were single and beginning your career may look very different once you have a spouse, children, a business, significant assets, or different financial obligations.
Depending on your situation, a review could include:
Life insurance
Disability insurance
Long-term care planning
Property and casualty coverage
Umbrella liability coverage
Your financial advisor may not provide every type of insurance directly, but they can help you identify areas worth reviewing and coordinate those considerations with the rest of your financial plan.
5. Are Your Dollars Working Efficiently?
Another conversation we frequently have with clients is about financial efficiency.
You may be doing many of the right things individually — saving, investing, contributing to retirement accounts, maintaining cash reserves — but those decisions also need to work together.
For example, an advisor may look at questions such as:
How much cash should you keep available?
Which accounts should you prioritize for savings?
How should different accounts fit into your retirement income strategy?
Are your investments aligned with your time horizon and goals?
Are there accounts or assets that could be consolidated?
Are you taking advantage of planning opportunities available to you?
Financial planning can help connect those individual decisions so each dollar has a purpose within the larger strategy.
6. Are There Action Items You Should Be Considering?
A good financial planning meeting should also result in clear next steps when action is needed.
Depending on your individual circumstances, those conversations could include topics such as:
Roth conversions
Retirement plan contributions
Beneficiary updates
Account titling
Charitable giving strategies
Retirement income planning
Required distributions
Estate planning coordination
Tax planning opportunities
Some of these decisions may involve your CPA, attorney, insurance professional, or other members of your financial team. Your advisor can help identify when those conversations need to happen and make sure the different pieces of your financial life are working together.
7. What Role Do Taxes Play in Your Financial Plan?
Taxes can have a significant impact on financial decisions, particularly when it comes to retirement income, investments, charitable giving, and withdrawals from different types of accounts.
At Aurora, we use tax analysis software to model different scenarios and help clients understand the potential tax impact of certain financial planning decisions.
For example, we may evaluate how different retirement withdrawal strategies or Roth conversion scenarios could affect a client's projected tax situation.
Aurora does not prepare tax returns or replace the role of a CPA. Instead, tax analysis can become another input into the financial planning process and help clients have more informed conversations with their tax professionals.
8. Do You Understand What You Are Paying For?
Your advisor should also be able to clearly explain how they are compensated and what services are included in the relationship.
You should understand:
The fees you are paying
How those fees are calculated
What services are included
Whether additional services carry additional costs
At Aurora, financial planning is incorporated into our client relationships rather than treated as a separate, one-time exercise with an additional planning fee.
That matters because we view the financial plan as an ongoing tool.
It gives our advisors a broader view of each client's financial life, and it gives clients context for the recommendations we make. When you understand why a recommendation is being made and how it connects to your long-term goals, it becomes much easier to make an informed decision about whether to implement it.
Your Portfolio Is One Part of the Conversation
There will absolutely be meetings where portfolio performance deserves significant attention. Markets change, investment strategies evolve, and your portfolio should be monitored as part of your overall plan.
But over the course of a long-term advisor relationship, there should be many other conversations happening too.
Your goals. Your family. Your retirement. Your taxes. Your insurance. Your estate. Your income. Your spending. Your priorities.
Those pieces collectively determine what financial success looks like for you.
At Aurora Financial Strategies, our advisors use financial planning to understand that broader picture and help clients make financial decisions with their long-term goals in mind.
If most of your conversations with your advisor begin and end with investment returns, it may be worth asking a bigger question:
What else should we be talking about?