If they have the correct information, financial advisors may assist their customers in managing their assets, setting aside money for significant expenditures, lowering their taxes, building investment portfolios, identifying cost-cutting opportunities, and more. For each client to receive the full benefit of their knowledge, a financial advisor has to have a comprehensive understanding of their financial status.
While the majority of clients are aware to bring their investment information and savings totals to a meeting with their financial advisor, it can be simple to forget other crucial items that might help a financial advisor obtain a full picture of a client’s particular position.
Here’s what to know before meeting with a financial advisor for the first time.
1. Your Long-Term Goals
Where do you want to be in the next five, ten or 20 years? Most people have not taken the time to write out their goals for the upcoming years. If you don’t know where you are trying to go, it is impossible to know the right path to take to get there. Destinations are not unchangeable, so it is important to revisit this plan every few years to make sure you’re still on the right path.
2. Your Answers To Your Advisor’s Information Form
The most successful relationships between clients and financial advisors are based on openness and transparency. The best way an advisor can guide a client through the initial phases of the relationship is to provide them with a comprehensive, holistic data-gathering form. This removes the burden from the client to identify what is important and what is not.
3. Your Real Estate Holdings And Details
Clients often think of a financial advisor as someone who trades stocks, but holistic planning should include detailed information about all of a client’s real estate holdings. Current values, mortgage interest rates and amortization schedules, rental income (if applicable), and expenses related to property upkeep should be shared, to name just a few details.
4. Your Rental Income
Most people don’t look critically at their financial picture, so meeting with a financial advisor can be scary. Rental income is an often-overlooked detail. In today’s economy, that can be almost anything—Airbnb income, rental property income or even income from boat rental, RV rental or the shed space in your backyard. Rental income can be used as catch-up funds for retirement accounts for those who are over 50 or are paying down debt.
5. Your Most Recent Pay Stub
A pay stub can help an advisor learn a lot about their client from a holistic viewpoint, allowing them to add value through their financial recommendations. For example, tax withholdings, retirement contributions, cash flow and insurance payments help the advisor create a financial plan that can put the client in the best position to reach their goals successfully.
6. Your Current Budget And Cash Flow
Many people do not have a solid grasp of their budget. They may be spending more than they realize or missing savings opportunities. Understanding your monthly cash flow is paramount to achieving financial success. It’s not something advisors look at often, but it’s critical to helping clients achieve their short- and long-term goals and understanding what will be needed in retirement.
7. Your Level Of Financial Literacy
A client needs to be aware of their financial literacy level, and an advisor needs to be able to detect it. Filling your advisor in on the level of your financial intelligence and aptitude, as well as your history with finances, is very helpful. This sets the tone for the advisor to present solutions that not only meet you where you are but also help you progress at the right gradient.
8. Your Expectations For The Relationship
Many people have different perceptions of what a financial advisor can or should do. It’s key to have an idea of what you want to get out of the engagement and have clarity around the scope. This will lead to more meaningful conversations in your consultations with your advisor.
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First, bring your significant other if you have one, because you both need to be involved. And bring pen and paper, because you want to take notes and really be open-minded about the process. As far as the actual paperwork to bring, here are a few things that would be helpful:
- A budget, if you have one
- Pay stubs
- Statements/details about any investments
- Any insurance policies you have
- An employer benefits statement
- Tax returns for the past two or three years
- Statements/details on any debt you owe (mortgages, credit cards, student loans, business loans, personal loans, etc.)
- Information on any trust funds you may be a beneficiary to
Your financial advisor wants to get a sense of your assets and liabilities so they can assess your situation. And if you’ve ever had a financial plan in the past, bring that so your advisor can understand what you’ve been working with.
We created this financial advisor meeting checklist to help you get ready to meet with your advisor. Some of these items may not apply to your particular situation. Simply use this financial advisor checklist of documents to guide you as you prepare.
- Investment account statements
- Retirement account statements including 401(k) and 403(b) accounts
- Pension estimates, if applicable
- Annuity statements
- Life/Long-term care/Disability insurance policy information
- Home values and information on any real estate holdings
- Mortgage information
- Student loan statements
- Value or appraisal of any significant personal property like boats, automobiles or jewelry
- Business valuations (if you own your own business)
- Stock option plans
- Social Security statements
- In doubt about an item? Bring it along. We can help you sort through the details.
Keep in mind, you may not have all of these documents above. These are our top suggested documents to bring to your meeting with a financial advisor, if they apply to you.