Common questions financial consultants will ask investors

Investment Advice and Common Questions Investors Should Expect from a Financial Consultant

If you are looking for someone to manage investment portfolio you have then it will be necessary to find a financial consultant with required competency to perform this task in right manner. You will know that you are working with right person when the consultant asks right questions and tries to understand financial position you are in. 

This is the topic we will be covering in next few sections and go through details of some of the common questions you should expect from an experienced financial consultant.

An Insight into Common Questions Financial Consultants Ask

To provide correct advice it will be important for consultant to have a clear idea regarding your financial position and requirements. Moreover, financial consultant will try to understand your investment objectives as well as judge risk tolerance level you have to provide right advice. 

For this purpose you can expect a consultant to ask some specific questions and we will be exploring those questions in this section.

Questions – Related to Risk Tolerance Level

financial consultantProper financial advice can only be provided when a financial consultant is aware of your risk tolerance level. Consultant will also check portfolio volatility you are ready to bear and by having clear understanding of these details, consultant will be able to provide right advice.

In this context, you can expect your consultant to ask following questions which will help him or her evaluate your willingness as well as capacity of bearing risks.

•    How much portfolio decline you will be able to bear in a year?

•    What is your current level of income and savings?

•    What you consider as substantial loss?

•    How losses will effect your lifestyle?

These questions will help financial adviser get a clear idea about risk tolerance level you have so that investment options can be selected accordingly.

Questions – About Suitability of Investments

Before any kind of advice is provided it will be necessary for financial consultant to analyze suitability of investments. To achieve this task consultant will be asking certain questions such as:

•    What is your tax situation?

•    What is your time horizon for accomplishing financial goals?

•    How much of assets you want your consultant to manage?

Questions – Related to Conflict of Strategies

Financial consultant will try to ensure that investment strategies do not clash with your tax or legal strategies. To make sure such a thing does not happen, consultant will be putting forward some questions like:

•    Is there any other type of adviser such as an estate attorney that you are consulting at the moment?

•    Is there any specific tax or legal strategy that might have negative effect over financial investments you are planning to make?

•    Will coordinating with such advisers be possible who are presently working on your behalf?

In Conclusion

As we can see, there are several details to be checked and a competent financial consultant will try to analyze all relevant aspects and get clarification from your end so as to be sure that the most suitable investment options are selected.


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About Me

Hello, I am John Vega from Boca Raton, FL.  I stated this website to talk about home improvement.  I spent 10 year in the industry and I love to share what I know.  However, the site has morphed into a multi subject site.  If you need some home improvement advice and you can't find it here you can contact me on the contact page and I will be glad to help you out.