According to Investopedia‡, curiosity is one of the top five traits needed from a financial advisor, meaning they are able to ask inquisitive questions to uncover client needs. Doing this can help you build a holistic financial plan based on your unique situation. Here are five questions your financial advisor should be asking you.

Do you have a financial plan?

You cannot reach a goal if you do not have a plan. Your financial plan is your baseline. It should encompass your budget, savings, investments, debts – everything. A comprehensive financial plan should also include your retirement and estate plan. This will help you understand how best to invest your money and determine steps you can take to protect and grow your savings. Your financial plan is a living document that reflects your values and what is important to you.

What do you want your retirement to look like?

Alliance for Lifetime Income‡ reported that around 4.1 million Americans will turn 65, retirement age, now through 2027. If you are in this age bracket, you want to make sure you are prepared for your retirement years and change in income. Your retirement goals should be one of the top five topics that your financial advisor discusses with you. Your financial advisor should help you determine the number needed to retire at your comfort level and discuss a tax-efficient withdrawal strategy for your funds.

Do you have an estate plan?

One of the next questions your financial advisor should ask you is about your estate plan. You need to have documents in place that outline your wishes and provide next steps for your loved ones to navigate if you are not able to do so. For those who have trusts included in their estate plan, an important consideration should be who is listed as your trustee. This can be an individual or it can be a corporation. There are pros and cons to each option, so this is something that you should explore to determine which one is the best choice for your personal circumstances.

In addition, your estate plan should specify whether you would like to be involved in charitable giving or you want to gift sums of money or other assets to loved ones.

Are you prepared for unexpected medical expenses?

Next, your financial advisor should help you outline a healthcare plan. Medical emergencies can happen in the blink of an eye and be detrimental to finances if you aren’t prepared for them, both now and in retirement. It is always important to have a savings account or dedicated Health Savings Account that you can use to cover medical expenses, and it should be part of your financial plan. In addition, your financial advisor should ask you if you are prepared for Medicare and the expenses that could be associated with Medicare coverage.

For many, retirement spending can look like a smile, where you will start by spending a lot of money on hobbies, travels, and other interests, then level out before expenses increase again because of medical needs. Your financial advisor can run scenarios to see how your retirement savings will stack up.

If you are a business owner, have you determined your exit plan?

Finally, if you are a business owner, your financial advisor should be talking to you about your succession plan. This should include how you are going to exit the business and pass along ownership to the next generation or potentially stay on as an owner. As a business owner, you are familiar with all the different layers that are involved in running a business, so your exit plan should encompass all the different facets of your business. Ultimately, a financial advisor can help you incorporate the value of your business into your financial plan and establish objectives for you while helping you minimize pain points associated with owning and selling a business.

Asking you thoughtful questions about your life and finances should be a regular practice from your financial advisor. Open communication should be an integral part of your relationship with your financial team. Questions shouldn’t be intimidating but instead provide relief knowing that professionals have your best interest at heart and can build a plan in line with your individual preferences.

Interested in learning more about Private Wealth Management? With UMB, you have a guiding partner from financial advising and wealth-building strategies, to retirement and legacy preservation plans.

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Financial planning services are offered by UMB Private Wealth Management a division within UMB Bank, n.a. that manages active portfolios for individuals, fiduciary accounts, employee benefit plans,

Disclosure:

This brief summary is for discussion purposes only and should not be relied upon for the implementation of any proposed changes prior to consultation with your independent attorney for legal advice, including specific interpretation of your documents. UMB does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information, and it should not be relied on as such.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.