5 Often-Overlooked Questions to Ask Your Financial Adviser in the New Year

Get your financial year off on the right foot by getting the answers to these key questions.

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With the new year upon us, you’ve likely been giving some thought to your investment portfolio and your planning priorities for 2019. A new calendar year is always a great time to take a step back to reflect on your goals and reset your financial plan to make sure you are on track.

One of my favorite mantras is that great outcomes stem from asking great questions. This is also a useful way to think about your finances and can often save you from making costly mistakes.

Start 2019 one step ahead by asking your financial adviser these five commonly overlooked questions to help you optimize your finances.

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1. How much am I paying in fees?

It's not always easy to get a handle on your investing costs, but you should know what you’re paying—and getting that information should be as easy as asking your adviser to spell it out for you. Do you know what your annual advisory fees are? That’s a great place to start. Then, ask your adviser to outline anything else you could be paying for, such as fund fees, account fees and transaction fees. While costs like operating expenses on ETFs or mutual funds are often inevitable, some products have higher fees than others, and it’s crucial to keep an eye on how they are affecting your returns.

2. What employer-sponsored savings accounts and financial benefits should I take advantage of?

Make time to ensure you’re taking full advantage of any employer-sponsored retirement plans, savings accounts or other financial benefits available to you. Your adviser can help you determine how your 401(k) fits into your broader retirement plan, as well as the best way to leverage other financial plans your employer might offer, like medical savings accounts (a flexible spending account or a health savings account) or employee stock purchase plans. Remember that if your employer offers contribution matching to your 401(k) it’s generally smart to take advantage of the full match. An additional benefit of any amount contributed by your employer is that it doesn’t count toward the annual IRS limit you can contribute yourself to max out your 401(k), meaning you can put more toward your retirement.

3. How do the (relatively) new tax laws impact me?

The Tax Cuts and Jobs Act that passed in late 2017 first took effect last tax season, but chances are you may still be adjusting to the changes, so it’s a good idea to look closely at how they affect you at the beginning of the year. A few noteworthy differences to be aware of are that most tax brackets are lower, the child tax credit has gone up, the allowance for itemized medical expense deductions increased, alimony payments are no longer deductible from taxable income, and inheritance tax exemptions have risen significantly. Even if you are aware of the new tax environment, you could have overlooked some of its effects. Be sure to speak with your financial adviser as well as a tax adviser about how these and other tax changes could impact your finances.

4. How much risk is appropriate for me right now?

The answer to this question is going to be different for every investor, and your financial adviser can help you determine how much risk within your portfolio is appropriate for you based on your age, financial situation, long-term goals and general level of risk aversion. It’s just as important to remember that your risk tolerance will likely change as you get closer to retirement and make more conservative financial moves, so it’s wise to re-evaluate where you stand periodically.

5. What other services are available to me?

Finally, ask your adviser what other services are available to you through their firm. Can they help you with your estate, legacy, tax, banking or other planning? These items may be important pieces of your financial plan. Don’t be afraid to ask what you get for your advisory fee to maximize your financial professional’s expertise or for a reference to an outside expert.

Most importantly, make sure any conversation with your financial adviser delves into your specific long-term goals and how you are tracking against them. A final question to ask during a sit-down might be as simple as, “What else should I be considering, and do you have a specific recommendation for me?” Your life stage, your needs and your goals are all unique to you. Your plan of attack for the new year should be the same.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Joe Vietri, Charles Schwab
Branch Network Leader, Charles Schwab

Joe Vietri has been with Charles Schwab for more than 25 years. In his current role, he leads Schwab's branch network, managing more than 2,000 employees in more than 300 branches throughout the country.