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Four Questions to Ask Your Advisor at Your Next Review Meeting

Jeff Stolper, CPA, CFP®

Director of Financial Education

Last Updated
November 18, 2021
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What You Need to Know About Your Financial Plan

When working with an advisor you trust, it can be easy to take a “set-it-and-forget-it” approach. Isn’t that why you’re paying someone else to manage your finances? If you’re working with a qualified fiduciary advisor, they are legally required to act in your best interest, but it’s still wise to have a face-to-face meeting at least once a year to have a financial check-up. Following are four important questions to ask your advisor during your review meeting.

Question 1 – What progress have I made toward my goals?

This is, essentially, the reason for the meeting. Your advisor should be able to give you a clear picture of what progress you’ve made over the last year and past several years. This conversation should be focused primarily on your goals. While investment performance is an important contributor, it should be discussed in relation to your objectives, not only in comparison to benchmarks and market indexes.

At Creative Planning, our wealth managers have access to sophisticated planning software that can show you exactly where you stand on the path toward achieving your goals. Your wealth manager can help you visualize where you began, where you are now and how far you still need to go. Work with your wealth manager to adjust any inputs and assumptions, and modify your plan accordingly.

Question 2 – What needs to be adjusted?

Begin this conversation by discussing any changes in your life, goals or financial situation. Consider the following questions as you prepare for your meeting.

  • What changes have occurred in your life over the last year? Did you experience any major life events such as a marriage, divorce, the birth of a child, a job change, etc.?
  • What new goals have you set? Are you hoping to purchase a second home, remodel your kitchen, buy a car, pay for college for a child or grandchild?
  • Have there been any changes to your retirement goals?
  • Have there been any changes to your health or the health of a loved one?
  • What financial concerns keep you up at night?
  • What would make you feel more comfortable about your financial situation?
  • Have there been any changes to your income or assets? Have you changed jobs, received an inheritance, made a major purchase, etc.?

Your financial life is dynamic and ever changing, and your financial plan should be, too. Your advisor will use the answers to the questions above to recommend any changes that should be made to your overall financial plan and investment portfolio. You may also wish to download our Annual Financial Planning Checklist at the end of this article for a list of more items to review on a yearly basis.

Question 3 – Am I effectively minimizing my tax liability?

It’s important to ask about optimizing your overall tax efficiency. This conversation should cover the following:

Portfolio taxes – Your advisor should be using several strategies to help minimize taxes within your portfolio:

  • Asset location – Placing tax-efficient investments in taxable accounts and tax-inefficient investments in tax-advantaged accounts can help minimize your tax liability.
  • Harvest losses – Using investment losses to offset gains.
  • Incorporate tax-efficient funds – By incorporating investments with built-in tax efficiencies, you can minimize the percentage of returns lost to taxes.

Charitable giving strategies – You’re likely aware that charitable donations can help reduce your overall taxes, but are you contributing in the most effective manner? Your advisor can help identify strategies for maximizing your charitable impact while minimizing your taxes.

  • Gifting – Making gifts to loved ones during your lifetime can be a rewarding experience, but you don’t want to inadvertently increase your tax liability or that of your family member. Work with your advisor to develop a tax-efficient giving strategy.
  • Estate taxes – Your advisor can also help you identify and implement tax-efficient estate planning strategies to help plan around any potential estate tax liability.

Question 4 – What fees am I paying?

If you’re working with a fee-only fiduciary advisor, this will be a quick and easy discussion. Your fees should be transparent and easy to quantify. Your advisor should know exactly what you’re paying for advice, as well as any fees associated with your investments. When you work with a fee-only advisor, you can usually expect to pay a percentage fee based on the asset(s) they manage on your behalf.

At Creative Planning, our wealth managers meet with clients on a regular basis to update them on their progress toward achieving their financial planning goals. Additionally, they’re supported by an in-house team of certified public accountants, insurance specialists, attorneys and other professionals to provide comprehensive advice tailored to each client. To learn more about how we help clients, schedule a complimentary, no-obligation consultation.

Visit www.IRS.gov for more information about taxes.

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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