11 Questions to Ask Your Financial Professional When Starting a Retirement Account

Let’s face it— no matter what stage of life you are in, choosing the correct financial professional and starting a retirement account can be confusing. There are many important choices to make when it comes to selecting the right plan and the right professional.  

When you’re ready to tackle it, Artesys can help customize your retirement investing strategy. At Artesys, we work with businesses, individuals, as well as other financial professionals on various types of retirement plans. 

The first step to your retirement roadmap typically starts with meeting with your financial advisor. You’ll want to make sure they are knowledgeable and have your best interests in mind. This can be done by thoroughly vetting those working with your nest egg before making the jump. 

To make this process a breeze, below are 11 questions to ask a financial advisor in the first meeting: 

1. What investment approach is right for me? 

When it comes to investing there are a few different approaches, for example are you an offensive or defensive investor? Offensive investing is a “buy and hold” approach for those focused on maximizing their return. On the other hand, defensive investing is a “buy and sell” approach for those who wish to protect what they already have. 

To find out which type of investor you are, Artesys recommends taking a short risk tolerance questionnaire to find a portfolio that fits your unique needs. 

A good financial plan should be customized to your retirement goals and aspirations, rather than a one-size-fits-all approach.  

2. What type of retirement account is right for me? 

You may be asking yourself, “Where should I put my retirement money?” There is no across-the-board answer to that, but the right professional can help make this important decision. With the many types of retirement accounts out there, it can be overwhelming trying to make the right choice. Start by looking at what is offered by your employer (typically 401k) and make sure it fits your goals. Other options include an IRA, Roth IRA, savings accounts, brokerage account, and annuity products. 

Another thing you should be looking for when determining a plan are the tax implications (Roth vs. Traditional). Do you want to pay taxes now or defer them until retirement? If you anticipate earning a higher income closer to retirement, it may be a good idea to pay taxes now (with a Roth) to avoid being taxed at a higher rate in the future. 

3. Are you a fiduciary?  

A fiduciary is an individual who must act in the best interest of their client at all times. This is an important factor to consider when selecting your retirement professional(s). Fiduciaries are held to a higher ethical standard and must complete a rigorous registration process to attain this title. Not all financial advisors are fiduciaries, but advisors can work with professionals such as Artesys to provide this benefit to clients.  

4. What are your qualifications and how do they benefit me? 

Not all financial professionals are built the same. When starting a retirement account, it would make the most sense to consult with someone who has retirement investing experience, right? 

We categorize financial advisors into two areas: generalists and specialists. “Generalists” are the jack-of-all-trades and knowledgeable on many different topics and products. This can be helpful when you are looking for help managing your entire financial portfolio and estate. 

When it comes to retirement investing, it can be beneficial to find a “specialist” to help manage your portfolio. This is someone who specializes in retirement investing primarily and is considered an expert in the subject matter.  

If your financial advisor is more of a generalist, that’s okay! They can partner with a specialist to make sure your money is well managed.  

5. What types of investments do you use in clients’ portfolios? 

A good financial professional will ensure your portfolio is well diversified. Ever heard the phrase, “Don’t put all your eggs in one basket”? This means that your assets will be distributed between different stocks, mutual funds, bonds, cash, etc. The reason for diversification is to minimize risk. If your assets are diversified you will not be affected by swings in the market as much as you would if 100% of your investments are in one specific category. 

Most people are too conservative when investing their retirement funds, which can lead to lower than average returns and delay retirement goals. By looking at factors, such as your age and risk tolerance, we can build a portfolio that allows for maximum growth without being too risky. 

6. What type of clients do you serve? 

Finding out what type of clients your financial professional serves can give you a clue as to whether they are a right fit. If they mainly serve businesses or corporations but you are a young professional, it may not be a good fit. Finding someone who serves clients similar to you can ensure they are knowledgeable about your specific situation. 

7. How often will I need to check in or adjust my portfolio? 

Ideally, you should be adjusting your portfolio regularly to keep your investments aligned with your goals and the current market. If you find that you do not have the time (or knowledge) to regularly adjust your portfolio, it may be a good idea to hire a financial professional who can assist. Many investors can benefit from a professional actively managing their portfolio and making adjustments as needed, depending on the investor’s retirement and wealth management goals. Many financial professionals will team up with companies, such as Artesys, to assist with the management & strategy needed for a strong portfolio. 

8. What are the costs associated with your service? 

Like other professionals, financial advisors do not work for free. Some may work on a fee-based schedule in which case you would likely be charged a fee annually for their services. Others work solely based on commission from financial products. And some are a combination of the two. Fee-based advisors have a fiduciary duty to their clients, which means they must buy/sell investments that are a good fit for their client. Commission-based professionals can be fiduciaries as well (but not all), so it is important to ask this question. When you hire a fiduciary financial professional, you can be assured your account is being managed with your best interests in mind.  

9. How often will my plan be adjusted? 

Another great question to ask your financial professional is how often your portfolio will be adjusted. Monthly? Yearly? Quarterly? You want to make sure your portfolio is being adjusted multiple times a year to keep up with market trends and ensure it is still serving your needs. We understand that doing your due diligence is crucial when maintaining a healthy retirement plan, whether it’s for your employees or clients. Adding a managed account provider, such as Artesys, to your retirement plan can help ensure your plan is adjusted regularly and in accordance with market trends. 

10. What types of support and/or education can I receive from you? 

Finding a financial professional willing to help you learn during the process is golden. When looking for a professional, be sure to understand the relationship they have with their clients. Are they willing to teach you investing fundamentals, while handling the hard work for you? At Artesys, you will be paired with investing professionals that are always available for questions during any part of the process. You are never in the dark on your financial positions and will always be provided full transparency on how your investments are performing.  

11. How much do I need to contribute to my retirement? 

It’s recommended you start by looking at what plans your employer offers, and maximize your employer’s match- if one is offered. For example, if your employer matches the first 4%, you should be contributing a minimum of 4% to get the full benefit (who doesn’t like free money?!) 

Ultimately, the decision on how much to invest will be determined by your current age, income, savings goals, desired retirement age, etc. What standard of living will you require when you retire? Planning to flock to a warmer state to soak up the sunshine? That may affect how much you need to contribute to reach these goals. More information on estimating retirement expenses can be found here. 

Key Takeaways 

Finding a trusted financial professional is important to ensure your hard-earned money is being optimized for your personal retirement goals. Asking these 11 questions when starting a retirement account can help guide you in the right direction. If you have additional questions on retirement investing (or you’re ready to get started), contact your financial professional to learn how Artesys can help.  

Sources: 

“The Fundamentals of Investing.” Morgan Stanley, advisor.morganstanley.com/the-okby-group/documents/field/o/ok/okby-group/9887415_WM_MKT_Seminar_Fund_of_Investing_FACT_SHEET_m2_FINAL.pdf.  

Gaines, Camille. “What Are DEFENSIVE INVESTMENTS?” Retire Certain, 13 Sept. 2021, retirecertain.com/what-are-defensive-investments/.  

“Help with Choosing a Retirement Plan.” Internal Revenue Service, www.irs.gov/retirement-plans/help-with-choosing-a-retirement-plan.  

Hicks, Coryanne. “What Is a Fiduciary Financial Advisor?” U.S News, 15 Apr. 2021, money.usnews.com/investing/investing-101/articles/what-is-a-fiduciary-financial-advisor-a-guide-to-the-fiduciary-duty.  

“Passive Investing vs. Active Investing- Wharton@Work.” Wharton Executive Education, 1 Mar. 2021, executiveeducation.wharton.upenn.edu/thought-leadership/wharton-wealth-management-initiative/wmi-thought-leadership/active-vs-passive-investing-which-approach-offers-better-returns/.  

“Roth vs. TRADITIONAL IRA: Which Is Right for You?” NerdWallet, www.nerdwallet.com/article/investing/roth-or-traditional-ira-account.