Six Must-Ask Questions for Your First Meeting With a Financial Advisor

Most people don’t believe they need the help of a financial advisor until they have a significant sum to invest. But the best time to begin working with an advisor is as early in your military career as possible. Getting started in your 20s gives you a much better chance of reaching your goals than waiting until your 30s or 40s.

What’s the best way to get started? There’s enough information online for you to begin investing on your own and that’s a much better decision than doing nothing, but a knowledgeable financial advisor who is well versed in military life and benefits can  work with you to build a comprehensive financial plan for pursuing financial security.

When you meet with a financial advisor for the first time, it’s important to be prepared. Here are six useful questions to ask that will help you gain a thorough understanding of your advisor’s methodology and determine if it’s the right approach for you.

1. How Can You Help Me Set and Pursue My Financial Goals?

The first, and perhaps most important, question to ask a financial advisor is how they can assist you in setting and pursuing your unique financial goals. The amount of time and effort an advisor devotes to goal setting can give you a clear indication as to whether they are a true goals-based planner, or just interested in selling you financial products.

And asking them how they will help you pursue your goals can help you learn how involved they plan to be once your financial plan is in place. Are they committed to acting as your go-to financial coach, or will you be on your own? Are they prepared to help you shape specific and realistic goals? Are they familiar with military benefits and will they help you integrate yours into your overall plan? What about protecting your family from unexpected risks? The key here is to confirm that your advisor has not only the necessary qualifications and knowledge, but also a well-organized planning process.  

2. How Do You Recommend Balancing Debt Repayment with Future Investments and Savings?

There is no one best method for paying off debts, and no single formula for balancing debt repayment with investing. What you’re seeking to learn in asking this question is that your advisor is capable of communicating a clear strategy for both. Are you better off paying off your smallest balances first, or attacking those with the highest interest rates – and why? Should you pay off all of your high-interest debts before you begin investing or is it advisable to do both simultaneously? Again, the key here is to listen to their strategy, ask them to explain the basis for it, and make sure you are confident that it’s a good fit for your situation.

3. How Will You Address My Short-Term and Emergency Financial Needs?

Investing for long-term goals is a bread-and-butter issue for most financial advisors. But it’s critical that your long-term investment plan be built on a solid foundation. That’s where having an adequate emergency savings account comes in. Does your advisor recommend having such an account? If not, why not? If so, ask them to explain the role it will play in your overall financial plan. The answer you should expect to hear is that having such an account can prevent you from having to use a credit card or withdraw from long-term investments when unexpected expenses inevitably arise. 

4. What Investment Strategies Are Suitable for My Risk Profile?

This question assumes that your advisor has taken the time to understand your attitude toward risk. If they haven’t, ask them if they plan to do so and how that process works. Many advisors will have you complete a short questionnaire that takes into account things like your time horizon, your liquidity, and how likely you might be to sell if the value of your investment declines. If you are asked to do so, discuss the results with your advisor and ask them to explain how that will influence the recommended allocation of your assets.

As is the case with many of these questions, there is no single right answer. The key is to confirm that your advisor has a methodology that takes your risk profile into account when making investment recommendations.

5. How Will You Help Me Maximize My Military Benefits?

Serving in our Nation’s military entitles you to a broad array of benefits. You want to ensure you are taking full advantage of these benefits in your pursuit of financial security. To put it plainly, if your advisor isn’t well-versed in the specifics of military benefits, they probably aren’t the best advisor for you.

To make that determination, ask your advisor how they will integrate your benefits into your overall financial plan. Don’t hesitate to ask them specific questions about the BRS, the TSP, SGLI and the Post 9/11 GI Bill. It may also be a good idea to ask them how they will help you replace your benefits when you separate or retire from service.

6. Can You Help Me Create a Plan to Retire and Pursue Financial Security?

Retirement is probably the most universal financial goal. Most people want to have the option to stop working at some point, and the assurance that they will have the resources they need when that time comes. So, after sharing your specific retirement goals, ask your advisor directly how they help you work toward achieving them.

For active duty service members, the Thrift Savings Plan (TSP), with its matching contributions and low-cost investment options, should probably be the first option your advisor brings up. If you plan to make the military a career, they should also talk about the role your pension will play in your overall plan. If your advisor doesn’t address the TSP and your military pension, it may be an indication that they are not well versed in military benefits. That should be a red flag.

The TSP is not the only retirement savings option, though. A good advisor will take the time to explain the benefits of tax-advantaged accounts like traditional and Roth IRAs and help you decide which is the best option for you.  

Connect with A First Command Financial Advisor

Nine out of 10 First Command Financial Advisors are veterans or military spouses who thoroughly understand the challenges and opportunities associated with life in the military. They are well prepared to address these six questions, and they offer complimentary financial planning to active duty service members and their families. So don’t wait. Take the first step toward planning your financial future today by connecting with a First Command Advisor. Get Started.

TSP funds have very low administrative and investment expenses, and low expenses can have a positive effect on the rate of return of your investment.