2 Critical Questions to Ask Your Financial Professional

Picture this scenario: You have a meeting tomorrow that you’ve scheduled with a financial professional because you know that proper planning is important.  You’re proud of yourself for taking action and scheduling this meeting and you feel a sense of accomplishment for doing so.  You know that this is a huge step to take.  However, you can’t shake this nagging feeling inside that says, “I have NO idea what I’m doing when it comes to this stuff, and besides, how do I even know that the person I’m meeting with has my best interests at heart?!” You’re not alone on this one.  It may be safe to say that most people feel this way and, if they’re not saying it, they’re thinking it.  I mean, who wouldn’t?  From the meltdown in the mortgage industry to the Bernie Madoff’s of the world, the financial services industry hasn’t exactly been portrayed as a bastion of virtue.  Granted, that may sound unfair since the number of financial professionals that truly do have a heart to put the clients best interests first far outweigh the number of those who are blinded by greed and seek their own gain. Yet, because of the latter, millions of Americans every year are hesitant to meet with a financial expert.  Some even putting off planning altogether, due to a lack of knowledge, expertise, and, ultimately, trust in the industry itself. So, the question that haunts the minds of every well-intentioned person who simply wants to properly protect what they have and leave a financial legacy to those they leave behind is this: “Is there really any way to equip myself to be able to discern if the financial professional that I’m meeting with is looking out for my best interests?” Of course there is.  And to be perfectly honest, this stuff really isn’t that complicated. Here it is in a nutshell: Proper financial planning really addresses two major issues…dying too soon and living too long.   It simply matches assets to liabilities.  That’s it!  Think about it.  It all boils down to life insurance and retirement planning .  Utilizing a s uitable life insurance policy protects your family against you dying too soon.  Having a review done by the right person makes absolutely certain your life insurance policy is the correct type, correct amount, & best value.   On the other side of the equation, a suitable investment strategy protects your family from living too long.  Having an objective review done in this area makes absolutely certain your investments match your liabilities considering risk, growth, & value.  Both of these strategies assure sufficient money to fully fund a lifetime of financial needs and, at the end of the day, the average person would sleep much better at night knowing that these two issues were off of their “to-do” list.  Wouldn’t you?  It’s a pretty powerful thing to know that your family is set financially and won’t have to struggle if something were to suddenly happen to you (i.e. Death) that cuts off your family’s income stream.  The majority of people have others that are dependent on their income and this can be a major cause of stress if not properly handled.  Likewise, in the wake of one of the worst market crashes in history (2008), millions of Americans saw their retirement accounts dwindle anywhere between 37% and 50% seemingly overnight.  The subject of outliving their retirement (i.e. running out of money before you die) is a very new reality that many people simply weren’t prepared for.  Fortunately, there are incredibly practical solutions to both of these problems, and having a fiduciary (person of trust who acts solely in your best interest) in your court literally can make all the difference in the world.  To know whether or not your advisor is really on the same side of the table as you, here are two very easy questions that you can ask in order to see who’s best interest they have in mind: 1.  Do You Offer More Than One Company’s Products? In my opinion, this is one of the most important questions that you can ask any financial professional.  Why? Because the answer to this question reveals to you whether or not the person sitting across the table from you can offer you multiple solutions from multiple companies.  Remember, the end-user here is YOU.  Wouldn’t you prefer to have someone that can choose from a variety of different companies, products, and services in order to best serve your needs over someone who has to “fit” your situation into their limited arsenal of proprietary products and services? A red flag should go up if you have someone telling you why “their” product or service is better than everyone else’s when it comes to financial planning.  Each individual situation is unique .  There is no “one-size-fits-all” product to meet everyone’s needs.  The bottom line is this: the person who can offer multiple products from multiple companies may have more independence, freedom, and objectivity when it comes to providing the right solution to fit your individual situation. 2.  Do You Have Sales Quotas? Let’s be clear…sales quotas are different from sales goals .  It is safe and healthy for a financial professional (or anyone for that matter) to set goals for themselves and to have a plan to achieve them.  That’s a fact that most people wouldn’t argue with.  A quota, on the other hand, is much different and has the propensity to cause many good people to do not so good things.  Is it fair to say that anyone who is working under a quota system is going to do something unethical?  Of course not and I would be grossly ignorant to suggest such a thing.  Having a sales quota means that someone working in that environment is bound and obligated to meet certain performance standards (i.e. sales transactions) in order to maintain their position.  Typically, failing to meet a quota can result in demotion, replacement, or even termination.  This is exactly the type of high-stress environment that I would NOT want my financial advisor to be working under!  Imagine if it were the end of the month and he or she had to either make one more sale or risk being fired, only to have to go home and tell their spouse and children that they may lose the house because of it.  That scenario is not as far from reality as we may choose to believe!  The point is that someone in that position may be under extreme temptation to offer a certain product or service that pays them more than an alternative solution that may be better for their client.  Conversely, if the professional that’s helping you is under no pressure or fear of losing their job under a quota system, everyone involved in the relationship will be able to relax, breath a little easier, and take the time to figure out which solution makes the most sense for YOU.   Obviously, there are many more questions that can, and should be, asked of your financial advisor before moving forward.  However, starting off your relationship with these two practical (and revealing) questions can very quickly and easily help uncover who you are working with and can help you to avoid wasting time, energy and possibly thousands of dollars in the process! Which question do you think is most important to ask your financial professional?  Leave a comment and help empower someone else! Image by  Deklofenak / Shutterstock Related Articles: 10 Questions to Ask a Financial Planner How to Avoid A Bad Financial Advisor: 5 Red Flags To Watch For Money Mentors: Who Should Influence Your Financial Life and Where To Find Them Introducing the Christian Financial Forums The Ingredients Necessary For A Healthy Financial Plan How To Spend Unexpected Income: 3 Questions To Ask Primerica – The pros and cons Adam Simon is a devoted Christian, husband, and father of four. At age 19, his life was dramatically changed by God, forever transforming his life to one of unwavering passion and service to Christ. Today, through his writing, speaking, and love of God, Adam shares his personal message of faith and family with people everywhere. You can reach out to Adam directly at asimon126@gmail.com and through Facebook & Twitter . The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .

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2 Critical Questions to Ask Your Financial Professional

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