6 key questions to ask when choosing financial advice

Find out what financial advisory is, what the benefits are and the 6 key questions to ask to make sure your money is in good hands.

Asking the right questions is essential to choosing a financial advisory service that meets your objectives, manages expectations and avoids wasting time and money. In this article, we’ll look at what financial advisory is, its benefits and the 6 questions you should ask to make sure your investments are in good hands.

What does financial advisory mean?

Financial advisory is a professional service provided by specialists, such as a private banker or account manager (advisor), who help individuals and businesses manage their finances efficiently. These financial professionals help clients make informed decisions on a wide range of topics, including investments, risk management and succession planning. The aim is to help clients achieve their financial goals and ensure the protection and long-term growth of their wealth.

Benefits of financial advisory

Financial advisory has three main benefits for investors:

1. Personalised investment management: A financial advisor presents investment strategies tailored to the risk profile of each client, aligning interests with expectations to achieve a balance between risk and return.

2. Comprehensive financial planning: By taking a holistic view of a client's assets as a whole, a financial advisor can integrate different areas, such as investing in financial instruments or providing wealth advisory, to ensure cohesive and effective wealth management.

3. Access to expertise: Financial advisors have in-depth and up-to-date knowledge of financial markets, investment products and the regulatory framework, enabling them to provide informed advice to optimise the management of clients’ assets.

How to choose specialist support

Here are 6 questions to ask yourself or your financial advisor to make sure you’re in good hands.

1. What are the objectives?

This is a question you should ask yourself before you start talking to the specialists. It’s a question you’ll be asked, and one you should be prepared to answer in a thoughtful and structured way. 

The objectives can be many. Whether it's protecting wealth for the next generation or achieving aggressive capital growth, financial advisory should always be based on your needs, risk profile, objectives and even family and professional dynamics. Once you have presented this context to your private banker or advisor, they should be able to help you formulate and prioritise these objectives and develop a plan that addresses them in a balanced way and achieves the best risk/return ratio for the scenario you have outlined.

2. What is your investment strategy?

Your investment strategy will be determined by a number of factors, including your investment objectives, your investor profile, your time horizon and the type of assets you wish to invest in. Once these factors have been fully assessed and the overall investment understood, the strategy to be considered can then be defined, which can be based on a number of different criteria. For example, investment strategies may have a greater focus on the time horizon – such as strategies designed to invest only in equities or bonds, asset diversification strategies – such as strategies designed to mitigate market risk in periods of high volatility, etc. 

3. Where are you unwilling to be exposed?

You may not have a clear idea of all the assets or sectors you want to invest in, but there may be areas where you know you don’t want to invest. This may be due to market volatility, political concerns, environmental principles or other personal factors. Defining these restrictions from the outset will help ensure that your portfolio reflects your values and risk tolerance.

4. What assets and services should be considered?

Financial advisory is most effective with a holistic approach that considers all aspects of your life, not just your financial investments, but all your assets, including other investments such as collections or art. You may also want to consider retirement planning, insurance and succession planning. 

5. How will my investments be monitored?

It’s important to understand how your investments will be monitored. Ask about the frequency of portfolio review meetings, the performance reports you will receive and how important updates will be communicated. Understanding the level of support and type of monitoring you can expect will help ensure you are always aware of how your investments are performing and allow you to adjust your strategy if necessary or if external factors affect your plans.

6. What are the criteria for deciding when to exit?

Before moving forward, it is important to discuss the criteria for exiting investments. Ask yourself what your exit strategies and conditions are, how you will identify the right time to sell assets and how you will minimise losses and maximise gains. This clarity is fundamental to ensuring that your financial goals are achieved efficiently and safely.

Banco Carregosa, an expert in financial advisory

When it comes to the management of your wealth, having a trusted advisor is important. The team of experts at Banco Carregosa is ready to listen to you, understand your needs and develop strategies that meet your objectives. We’ll provide you with the support you need to help protect and grow your assets while feeling reassured.