12 Questions You Must Ask Your Financial Advisor Before the Year Ends

INVESTING - SAVING FOR RETIREMENT
Schedule a meeting with your advisor and ask these key questions before the ball drops.
Updated Feb. 5, 2024
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No matter how smart you are about money, there’s no substitute for advice from a trained expert who deals with complex money matters daily.

If you have a financial advisor, you should plan an end-of-year meeting to review your financial standing, go over any goals, and make any last-minute tax moves to build wealth for your future.

These questions will ensure you and your financial advisor are on the same page about your current and future financial goals.

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How did my investments perform this year?

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A solid investment portfolio is the backbone of any lifelong financial strategy, but understanding the stock market isn’t the most straightforward task for a layperson.

Your financial advisor should be able to break down the information into digestible chunks to tell you exactly which investments performed well, which ones didn’t, and why.

What were my capital gains and losses?

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Capital gains refers to the profit you make from selling an investment, while capital losses refers to the financial hit you take if you sell an investment for less than you paid.

Your financial advisor should be able to walk you through everything you gained and lost this year and your strategy for maximizing gains in the next year. The advisor should also offer a plan to sell losers to reduce your tax burden.

Is my investment portfolio performing as expected, or do I need to change tactics?

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If your investments aren’t performing as solidly as you’d hoped, you need to ask your financial advisor exactly what the problem is and what changes they recommend making.

Some investment ups and downs are to be expected. But the closer you are to retirement, the less you can afford to lose money on bad investments.

If you’re seeing too many losses, you need to talk to your advisor about an updated strategy.

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How will my investments’ performance impact my taxes this year?

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Depending on how your investments performed this year, you might need to report income from capital gains on your taxes. 

Your financial advisor can let you know what you do and don’t need to report and if you should start preparing for next year’s potential tax liability based on any expected gains.

Be sure to discuss tax harvesting — selling losing investments — to offset any capital gains in your portfolio.

Do I need to adjust my financial strategy based on any recent life changes?

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A lot can happen in a year, from adding a new family member to a relocation or job change.

Bring your financial advisor up to speed on where you are at this stage in life and ask them what money moves you should make to account for your new circumstances. 

Should you be putting more money in savings? Do you need to open a college savings account for a new child?

Are there any changes to tax law that I need to know about?

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As a layperson, you don’t necessarily need to be up to date on all the complicated laws governing taxable income, but your financial planner certainly does.

They should also be able to explain any crucial tax law changes to you in clear language and then collaborate with you on a strategy to minimize your taxes for 2024.

Are there money moves I should make for tax purposes before December 31?

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It’s the tail end of the tax year, so you only have a few weeks left to maximize your tax situation.

If you want to make any charitable donations, 401(k) contributions, or other retirement savings contributions to reduce your taxable income, now’s the time to do so.

Talk to your advisor about additional ways to reduce your tax burden as the year winds down, not just for the 2023 tax year but moving into 2024 as well.

Do I need to update my estate plan?

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Have you experienced significant life changes over the last year, like a remarriage, divorce, or birth of a grandchild? If so, now is the perfect time to update your estate plan to ensure your inheritance is distributed how you want it to be after your death.

Talk to your financial advisor about changes you want to make regarding power of attorney, asset allocation, charitable donations, and estate beneficiaries.

What moves should we make if the markets are volatile in the coming year?

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Investing in the stock market means learning how to deal with volatility. In 2022, the S&P 500 was off 19.44% but has bounced back this year, gaining more than 18%. Hopefully, the major indexes will continue to gain next year, but you can’t count on it.

Ask your financial advisor what changes they’d recommend for your portfolio if anything unexpected comes up over the next 12 months. You might not need to implement these plans, but you’ll feel better knowing you’re prepared for anything.

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Am I still on track for retirement?

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Now that you’re another year closer to retirement, it’s worth checking in with your financial advisor about your retirement plans.

For instance, you might want to talk about whether or not you plan to move, whether you expect to pick up part-time work, and what your housing situation will look like in retirement.

If any of these things have changed in the last 12 months, now is the time to review and plan for them.

Am I still on track for paying off any debt at a reasonable rate?

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Debt — especially high-interest debt — is the last thing you want to bring into retirement. Talk to your financial planner about any changes to the amount of debt you’ve taken on or paid off throughout the year.

It’s worth reviewing your budget with a professional to find out if you can afford to increase any debt payments to get them paid off in the coming year.

Am I still being charged a fair rate for your services?

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This final question is definitely blunt, so you may want to soften it. But don’t overlook it just because you’re worried about seeming impolite.

The person who handles your finances should be charging you a fair rate to do so, period. If your financial professional can’t give you a transparent answer that breaks down exactly what services you’re paying for and how they calculate that fee, consider that a red flag.

Bottom line

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No one cares as much about your financial future as you do. So even when you have an expert on your side, it’s important to take an active, engaged role in your financial planning.

If you find yourself less than satisfied with the answers you get from your financial advisor, the beginning of a new tax year is the perfect time to start shopping for a new one. 

You need someone who helps you meet your fiscal goals long before you retire, not someone who keeps you from maximizing your financial potential.

FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.

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Author Details

Michelle Smith Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.

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