Does your portfolio truly line up with your life objectives? You can see how your strategy aligns with your needs, timelines, and risk tolerance by asking a few key questions. If your financial goals—like buying a home (or a second home), eliminating debt, or retiring within your timeline—aren’t guiding each trade or fund selection, your plan might need a closer look.
This post will help you clarify your aim, evaluate whether your advisor’s approach aligns with those goals, and confirm it fits your comfort level with market changes. By exploring the questions ahead, you’ll gain the insight to keep your money on track for the future you envision.
Understanding Your Investment Strategy and Performance
Knowing how your money is invested and how it’s performing is the foundation for smart financial decisions. That’s why it’s important to explore the strategies your advisor uses, why they matter, and what benchmarks can help you track progress.
How do you plan to shape my portfolio to support both short-term needs and longer-range aims and why does my time horizon matter so much?
Imagine you have a few immediate targets—maybe a new car purchase—and some distant dreams like leaving an inheritance for your children. Your advisor’s investment strategy should reflect both. If your holdings are too aggressive when you need the money soon, you could be forced to sell at a loss. Conversely, being overly conservative for longer-term goals might mean missing out on growth.
Your time horizon for when you plan to use a portion of your investments is very important.
The longer you have, the more leeway you typically get to ride out market dips. If you’re aiming to use the funds in five years or less, you might keep a sizable portion in bonds or cash-like instruments. If it’s decades away, a bigger equity allocation may make sense. Your individual goals and risk tolerance should shape every choice.
What if I’m uneasy about large market swings? Are the profits I’m receiving worth that volatility?
It’s natural to feel nervous during a big market dip. Some people can stomach a 10% pullback, while others lose sleep if their balance drops 3%. The potential for high returns may not justify your stress levels about them, which is something worth discussing with a financial advisor.
It may be worth reviewing the following:
- Volatility vs. Reward: There are tools and measurements that help gauge whether the return you’re earning is proportional to the risk you’re taking. A stock that soars in a bull market could plunge when conditions change. Talk with your advisor about these metrics and possible scenarios so you fully grasp the trade-offs.
- Adjusting Your Allocation: If you decide that a roller-coaster ride isn’t for you, your advisor can rebalance into steadier assets. This could mean fewer equities and more bonds or focusing on dividend-paying stocks that historically fluctuate less.
How do you decide on the right mix of stocks, bonds, or cash for me?
Your portfolio’s composition significantly affects whether you’ll hit your financial goals. By asking how they arrive at the final mix, you’ll learn how closely their approach reflects your comfort with risk, your need for income or growth, and any near-term priorities.
Here’s what you might discuss to get more clarity:
- Portfolio Strategy vs. Market Shifts – Find out if your advisor adjusts allocations based on market outlook or if they stick to a consistent strategy regardless of daily headlines.
- Your Liquidity Needs – If you need cash soon (for income or a major purchase), your advisor should account for that by setting aside funds in relatively stable assets.
- Sector and Geographic Diversification – See if they spread investments across multiple industries and regions, which may help buffer your account against localized downturns.
- Customization vs. Templates – Ask whether they use standardized models for all clients or truly personalize the allocation to your specific situation.
If I have specific ethical or personal preferences, how can we reflect those in my positions?
You might want to avoid certain industries or invest in causes that match your personal values. Investment management doesn’t have to ignore your moral compass. Typically, advisors can help you tailor your approach to reflect your preferences—like screening out sectors you disapprove of and focusing on areas that align with your beliefs.
Which benchmarks do you use to gauge my results, and why did you pick them?
Some advisors compare your investment portfolios to the S&P 500 or other market indexes. That can be useful if you hold a lot of U.S. equities. But if a big chunk of your money is in bonds or international stocks, a single index isn’t enough.
It’s helpful to align benchmarks with your holdings.
If your portfolio is 60% stocks and 40% bonds, then a blended benchmark (like 60% stock index + 40% bond index) often provides a clearer sense of performance. You’ll see whether you’re pacing well, given your chosen risk level, or lagging in ways worth exploring.
Advisor’s Role and Methodology
Your advisor can greatly influence your financial outlook, so it helps to understand how they work and why. Talk about the tools and resources they rely on, their professional standards, and how they develop personalized strategies.
What’s your personal investment philosophy?
When you’re working with a financial advisor, it helps to know how their perspective, experience, and investment philosophy influence their advice. For instance, an advisor who favors steady, lower-volatility strategies may suggest a more conservative portfolio—even if you’re comfortable taking bigger risks. On the other hand, a professional who’s inclined toward rapid growth might steer you toward aggressive assets that don’t align with your comfort level.
Here are a few points you might explore:
- Risk Appetite: Does your advisor naturally lean toward capital preservation, or are they more willing to take calculated risks? Understanding this can clarify how your investment goals and their outlook mesh.
- Market Outlook: Some advisors rely heavily on research and macroeconomic trends, while others emphasize long-term buy-and-hold strategies. Knowing how they react to market swings helps you anticipate potential shifts in your portfolio.
- Personal Track Record: If an advisor personally invests in a certain sector or style, they may be predisposed to recommend it. It’s worth asking if that approach suits your unique situation.
How frequently do you review my account, and what prompts you to rebalance it?
Portfolios can shift over time as some assets outperform others or your personal priorities change. A 50/50 stock-to-bond split can become 60/40 if equities are performing well or your willingness to wait becomes longer. Regular check-ins help your advisor see if you’ve strayed away from a target mix that makes sense.
Common triggers for rebalancing include:
- Specific time intervals (e.g., quarterly or annually)
- Asset allocations that move a set percentage away from your plan
- Major market swings that create an opportunity to lock in gains or buy undervalued positions
- Significant life events like divorce or having a child
- A change in personal circumstances (ex: receiving an inheritance) or a change in financial goals (saving for retirement)
Rebalancing keeps your risk level in line with your original financial plans—and might also open the door for tax loss harvesting if done strategically.
Fee Structure and Costs
Understanding how your advisor is paid helps prevent surprises and keeps everyone on the same page. It’s important to discuss common fee models so you know what to expect. Understanding the cost structure can help you see the value of the advice and services you receive.
How are you paid for managing my holdings, and should I know about any special incentives that could affect decisions?
Your advisor’s compensation model affects the financial advice you receive. It’s important to understand exactly how they are paid.
Advisor fees can vary in many different ways:
- Percentage of Assets Managed: Common among many advisory firms
- Flat Annual Fee: Might suit investors who don’t want costs tied to account size
- Hourly Charges or Project Fees: Pay only for the planning services you need
- Commissions: Could be on individual trades or certain products
Ask directly if they earn extra by recommending certain funds or insurance policies. That doesn’t necessarily mean it’s a poor product—just that you should be aware of possible conflicts of interest.
Please Note: A trustworthy advisor welcomes open dialogue. If you see them dodging questions, pushing high-fee products without sound reasoning, or making unrealistic promises, it’s a red flag. In such cases, consider seeking another perspective—getting financial advice from a different professional can confirm whether you’re working with someone who truly has your best interests in mind.
What other costs might lower my returns?
You may be comfortable with your advisor’s fee structure. However, it’s also worth examining costs within your investments themselves. These other expenses can really add up over time.
Other expenses worth asking your advisor about may include:
- Fund expense ratios
- Trading or transaction fees
- Administrative charges
Here’s a quick fairness test:
- Check if similar funds exist at lower expense ratios.
- See if your advisor offers added value—like estate planning insights or specialized tax strategy—that justifies a slightly higher rate.
- Compare your effective total cost with industry norms.
Please Note: If you’re still unsure, getting a second opinion from another financial planner can confirm whether you’re on the right track.
Communication and Relationship Management
A strong, open line of communication builds trust and helps you stay engaged with your financial plan. Make sure to look at how often you should expect updates, how to stay in touch, and how your advisor addresses your questions.
How often will you contact me about my account, handle big market swings or sudden life changes, and inform me about trades, fees, or strategy shifts?
Ask your advisor about their communication rhythm—some people appreciate monthly progress emails, while others prefer quarterly calls or on-demand check-ins. Find out what happens when the market swings or you experience a life change, like switching jobs. Will your advisor send an alert, call you immediately, or wait until the next review?
You should also clarify how you’ll learn about new trades, fees, or adjustments so there are no surprises. A clear, agreed-upon plan for staying in touch can help make sure you’re always informed and ready to adapt.
Do you prefer phone calls, emails, or face-to-face meetings, and how quickly do you respond to messages?
If you’re always on the go, quick updates via email or an online portal might be easiest. If you prefer walking through complex concepts in real-time, virtual or in-person visits might be more reassuring.
Ask about communication and response times upfront.
If you email a question, will you hear back that day or the next week? The right fit depends on how much interaction you want—and whether the advisor can meet those expectations.
Long-Term Planning and Goals
Achieving your financial goals often requires patience and a well-structured plan. It’s important that you review how advisors connect your immediate steps with bigger targets, such as retirement or education costs.
How do my current investments help me avoid running out of money once I stop working, and am I keeping pace with my personal targets?
Retirement planning shouldn’t be a fuzzy idea about “the future.” Maybe you hope to retire at 60, or you’d rather keep working part-time into your 70s. Being specific about your timeline and lifestyle goals makes it easier for your advisor to see if your current savings rate and portfolio mix can actually support the life you envision.
Additionally, you will also want to review the following:
- Returns, inflation, life expectancy: If real-world conditions differ from overly optimistic forecasts, your savings could deplete faster than expected. Clarify how your advisor calculates these factors to keep your goals grounded in reality.
- Allocation or withdrawal changes: If you decide to retire earlier or face a sudden change, flexibility is key. A well-structured portfolio can adapt to new circumstances without derailing your long-term security.
What’s the best way to pass funds along to loved ones while also meeting my own needs?
Estate and legacy planning is a balancing act: you want to care for your family without compromising your own security. Some strategies involve gifting money while you’re alive—potentially reducing estate taxes—while others involve trusts that protect assets for future generations.
If you plan to leave a large inheritance but worry about market risks, you may want to consider more conservative holdings. On the other hand, if you’re decades from transferring wealth, growth investments might better sustain your long-term financial ambitions.
How do we plan for rising medical costs, including long-term care options?
One major hospital visit or a lengthy nursing home stay can severely dent your finances. Incorporating healthcare into your financial goals shouldn’t be overlooked.
Here are some major areas to consider:
- Long-Term Care Insurance: Fewer and fewer people are finding it affordable to buy long-term care insurance, but products like these can help offset the considerable expenses associated with assisted living or in-home care. Your personal strategy for funding these expenses, should you require long-term care, need to be considered when planning for later stages of life.
- Dedicated Health Savings: A health savings account (HSA) can be invested and used tax-free for qualified expenses if you have a high-deductible health plan. It’s also worth noting that HSA funds can be used for non-qualifying medical expenses without penalty after you reach age 65.
- Regular Updates: Costs evolve, so your projections for medical bills (as it relates to your income needs) should be revisited when meeting with your financial advisor to allow for enough reserves.
Adapting to Economic and Market Changes
Markets and economies evolve constantly, which can affect your investment outcomes. Be sure to cover how your advisor keeps an eye on emerging trends, revises strategies, and helps protect your portfolio from potential downturns.
How will you help protect my holdings or spot opportunities when market swings occur?
Markets never move in a straight line. Some advisors reduce risk in anticipation of recessions; others jump on bargains when prices drop. It’s about having a plan before the headlines turn scary.
Possible approaches to ask about include:
- Shifting part of your portfolio into defensive sectors or bonds
- Buying more equities in a downturn to capitalize on lower prices
- Evaluating if the current climate calls for new strategies or a wait-and-see approach
Please Note: Emotional, spur-of-the-moment decisions often hurt returns more than they help. A level-headed roadmap can keep you from panic selling or missing potential rallies.
Get Your Questions Answered
Asking questions about your portfolio can give you a stronger sense of control over your money and future. Each inquiry reveals how your advisor thinks and whether your account truly aligns with your personal goals.
Think of these discussions as ongoing, not one-time events. Life isn’t static, and major milestones can shift how much you save, how much risk you accept, or when you’ll need your funds.
We invite you to schedule an introductory call with our team. Together, we can run through the above questions and any other inquiries you may have!
Sheena is a highly regarded financial professional known for her clear explanations and practical advice on complex financial matters. She earned her CERTIFIED FINANCIAL PLANNER™️ designation in 2010 and holds a Bachelor of Science degree in Finance from the University of Wisconsin LaCrosse.
