Tompkins Financial Advisors Are Advising On How To Be A Proactive Client: Asking the Right Questions

3/9/2016 -- You've selected your financial advisor and your first meeting is set. As you begin this relationship, it is essential to develop a set of questions to ask your advisor so that you can help shape your investment strategy.

“The success of your relationship with your financial advisor will depend on whether you can clearly articulate your goals so that the two of you can develop a long-term plan that addresses your needs,” according to J. Richard Price, CFP^®, wealth advisor and managing director with Tompkins Financial Advisors. “The more you can collaborate in the process, the more you will get out of it.”

Here are five key questions to consider what will help maximize the potential benefits of working with a financial advisor:

How can my financial planner integrate my competing needs into a single strategy that will help me work toward saving or earning money?

At different stages of life, you will have different financial challenges. You may be looking to buy your first house (or upgrade from your existing home), figuring out how to pay for college tuition, and trying to build up your retirement account. Your financial planner needs to know what your obligations and goals are before drawing up a plan to help you meet them while saving for the future. At the outset, you should also disclose all of your assets. Your advisor can then work with you to create a realistic strategy that prioritizes your competing financial commitments and devises strategies designed with a goal of helping you build up your retirement savings.

How much money will I need for retirement?

The amount of savings needed for retirement depends on the individual. Generally, it is based on where you'll live, how much you'll need to live on, how healthy you'll be as you age, and how long you are expected to live. One standard rule of thumb is that you'll need 70 to 80 percent of your preretirement income per year to finance your living expenses. Keep in mind, however, that you may not need to come up with that entire amount, because Social Security will pay a portion of it if you are eligible to receive benefits from the program. While those numbers may seem intimidating, your financial planner will advise you how to start saving early so that you can aim to avoid a significant change in your lifestyle as you approach retirement.

How will my financial planner educate me so that I can collaborate in developing my financial strategy?

In a successful client/advisor relationship, the two of you will work together to create your financial strategy, rather than the advisor devising the plan without your input and then presenting it to you. Your financial planner should be willing to work with you collaboratively to develop your long-term plan. The more educated you become, the more you will buy into the plan and follow its recommendations. To achieve this goal, you'll need to tell your planner how you want to communicate and how often meetings or conference calls should occur.

Will your financial planner communicate with the key members of your financial team, including your tax accountant and estate planning attorney?

Your investment strategy should align with the other pieces of your financial picture, specifically your estate planning and tax obligations. To make sure all your advisors are on the same page, encourage your financial planner to reach out to your accountant and estate planning attorney so that they are all working together in your best interest. This will also save you time relaying information among all your advisors and will ultimately lay the groundwork for a more solid financial strategy.

How will your investment performance be measured?

Your financial planner should have a process to evaluate your investments and a set of benchmarks to determine when to buy or sell. “Ask for regular conferences with your advisor to discuss how your investments measure up to those benchmarks,” Price added.  Keeping informed about how your portfolio is meeting your expectations will allow you to work with your advisor to determine whether your portfolio needs to be rebalanced to ensure that it continues to fit your investment goals.

Investment Services provided through Tompkins Wealth Advisors. Trust and Estate Services provided through Tompkins Trust Company. Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. LPL Financial is a separate entity from Tompkins Financial Advisors. The investment products sold through LPL Financial are not insured Tompkins Trust Company deposits and are not FDIC insured. These products are not obligations of Tompkins Trust Company and are not endorsed, recommended or guaranteed by Tompkins Trust Company or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. Tompkins Financial Corporation, Tompkins Trust Company and Tompkins Wealth Advisors are not registered broker/dealers and are not affiliated with LPL Financial.