Financial advisor checklist: Questions to think through before your next meeting
Executive Director, Head of Private Wealth Planners, Wealth Planning and Advice at J.P. Morgan Wealth Management
- Bring a list of relevant, detailed questions to help you make the most of meetings with your financial advisor.
- This checklist covers nine themes to discuss – cash flow, debt, investments, retirement, insurance, education savings, long-term care, estate planning and wealth transfer/philanthropy.
- A detailed financial plan can provide clarity, reduce stress and help you prepare for unexpected events.
Financial planning is vital for helping you manage your finances effectively to achieve your life goals. Whether you're saving for retirement, managing debt or planning for your children's education, having a structured plan ensures that you make informed decisions and stay on track. In addition, a detailed financial plan can provide clarity, reduce financial stress and help you prepare for unexpected events.
A financial advisor can help you navigate the planning process. To make your plan more comprehensive, consider coming to your advisor with a list of detailed questions to help you make the most of your meetings. This checklist won’t cover every part of financial planning, but it can help you focus on the fundamentals and stay aligned with your goals.
There are nine key themes worth exploring with your financial advisor (not every theme may apply to your unique situation):
1. Cash flow
Cash flow management involves understanding your income sources and expenses as well as making sure you have a safety net for emergencies. The following questions can help you better understand your current cash flow situation:
Sufficient income to cover expenses
- Do you know your income sources and expenses?
- Are you using budgeting tools?
- Do you have an emergency fund?
- If in retirement, do you have excess cash flow? If so, how are you planning for required minimum distributions (RMDs) and the cash flow and tax impact?
Suggested next steps
Work with your financial advisor to create a detailed budget that tracks your income and expenses, helping you manage your day-to-day cash flow effectively.
2. Liability management
Successful debt management helps you maintain financial flexibility and ensures that your outstanding debt doesn't hinder your financial progress. The following questions can help you better understand your current debt situation and what potential adjustments you could make to optimize your financial health:
Access to liquidity
- Are you currently planning for any significant life events, such as weddings, tuition payments, travel or purchasing a home?
- Do you have the liquidity necessary to fund these goals? If not, are you considering selling assets to increase your liquidity?
Debt-to-asset ratio
- What is your current debt situation, including outstanding debts and payments?
- Do you have the capacity to take on more debt, or is there a need to reduce your debt?
Suggested next steps
Collaborate with your financial advisor to review your current debt levels and repayment plans. Discuss any upcoming life events that may impact your financial situation, and explore options to enhance your financial flexibility. If you're considering selling assets for liquidity, consult with your advisor to ensure it aligns with your overall strategy. Additionally, consider sharing any relevant account and debt statements for a comprehensive review of your obligations.
3. Asset management
Managing your assets effectively is crucial to achieving your financial goals. It involves understanding your risk tolerance, allocating your investments wisely and ensuring your assets are titled correctly. The following questions can help you assess your current situation and make informed decisions:
Understanding risk tolerance
- Are you comfortable with the ups and downs of the market?
- How much risk are you willing to take to achieve your long-term goals?
- Are you overexposed to a particular asset class or investments?
Asset allocation
- Do you know how your investments are spread across different accounts (e.g., taxable accounts vs. retirement accounts)?
- Are you open to exploring new types of investments?
Asset titling
- How are your assets owned (e.g., joint accounts, trusts, etc.), and are there any conflicts with your estate planning goals?
- Do your beneficiary designations align with your goals?
Suggested next steps
Work closely with your financial advisor to evaluate your investment portfolio and risk tolerance, ensuring they align with your financial objectives. Consider discussing diversification strategies to mitigate risk and explore opportunities in asset classes where you have limited exposure. Additionally, take the time to review all assets to ensure they are titled correctly and that the listed beneficiaries are consistent with your overall financial plan.
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4. Retirement
Thoughtful retirement planning and consistent saving are key to making sure you have the financial means to support your desired lifestyle in retirement. The following questions can help you and your advisor create or adjust a retirement planning strategy that makes sense for you:
Maximize retirement accounts
- What do you envision retirement looking like?
- Are you maximizing your retirement savings? Why or why not?
- Are you taking full advantage of employer contributions?
Establish retirement accounts
- Have you consolidated old retirement accounts?
- If you are a business owner, do you currently have a retirement plan set up?
Beneficiary designations
- Are your retirement account beneficiaries up to date?
Roth opportunities
- Could a Roth IRA or conversion benefit you?
Suggested next steps
Work with your advisor to review and update beneficiary designations as needed – especially after major life events – and review your retirement savings strategy to see if you're maximizing your annual contributions. Additionally, understand the differences between traditional and Roth IRAs, and evaluate the benefits of establishing or converting to a Roth IRA to enhance your retirement planning.
5. Risk management and life insurance
Life insurance is a key component of holistic planning, providing security for your loved ones in the case of unforeseen events. The following questions can give you and your advisor a good sense of how life insurance may fit into your broader planning goals:
Personal life insurance
- Do you have any major health concerns? If something were to happen to you, would your loved ones be financially secure?
- Do you have existing life insurance (for example, employer-provided coverage or an individual term or permanent policy)?
- What are your liquidity needs if you were to pass away?
- Is your estate likely to be subject to federal or state estate taxes?
- Do you want to cover any taxes that your beneficiaries might owe on inherited assets?
Business owners
- What is the succession plan for your business, and is there a need to fund a buy-sell agreement?
- Are there any key employees who need to be insured for business continuity purposes?
Suggested next steps
Assess your insurance needs to see if you currently have adequate coverage, and review your existing life insurance policies to determine if additional coverage is necessary. Your advisor can help you explore options like an irrevocable life insurance trust if it is applicable to your situation. If you own a business, discuss your succession plan and the insurance needs for key employees with your advisor.
6. Saving for education
Education savings options can help you fund your children's future education – or even your own. The following questions can help you assess your education savings needs and explore additional options:
Save for college
- What role do you want to play in funding your children’s education?
- Are you planning for potential scholarships or financial aid?
Save for K-12 education
- Are you considering private school for your children?
Suggested next steps
An advisor can help you set specific education savings goals and explore savings options like a 529 plan or Uniform Transfers to Minors Act (UTMA) accounts to support your children's educational needs. Work with your advisor to evaluate the differences in costs between public and private universities and review any potential scholarships or financial aid options.
7. Long-term care
Planning for long-term care is an essential part of securing your financial future, especially as you age. Typically, it involves preparing for potential healthcare needs and ensuring you have the necessary resources to cover long-term care expenses. The following questions can help you evaluate your need for long-term care insurance and develop a plan to address these needs:
Long-term care insurance
- Do you need long-term care or disability insurance to cover potential healthcare needs?
- Are you self-insured, or do you need additional coverage to protect against long-term care expenses?
- What is your contingency plan if you require long-term care or assistance?
Suggested next steps
Evaluate your long-term care insurance options with your financial advisor and discuss contingency plans with your family to ensure you're prepared for potential healthcare needs as you age.
8. Trust and estate planning
Estate planning often involves organizing the transfer of wealth to intended recipients, either during one's lifetime or upon death, with an understanding of potential tax consequences. It also includes appointing individuals to manage assets and affairs prudently, ensuring a seamless and tax-efficient transfer of wealth within families. The following questions can help you set or build on the foundation of your estate plan:
Basic estate planning
- Do you have the foundational documents in place, such as a will, revocable trust, power of attorney, healthcare proxy and living will?
- What type of legacy do you want to leave?
- Have you named guardians for minor children?
- Have you considered keeping your children's money in a trust for asset protection purposes?
- If you already have estate planning documents in place, when is the last time you reviewed them?
Suggested next steps
Consult with a trust and estate planning attorney to draft or review your estate planning documents, or consider revising your existing documents based on your evolving needs and goals. Work with your financial advisor to make sure your estate planning goals are reflected in your overall financial plan.
9. Wealth transfer and philanthropy
Wealth transfer and philanthropy strategies involve determining how you wish to share your wealth with loved ones and meaningful causes, establishing a tax-efficient plan to do so. The following questions can help you and your advisor create a comprehensive gifting and charitable giving strategy:
Basic gifting strategy
- Do you have excess capital to implement a wealth transfer strategy?
- Are you planning to transfer wealth to loved ones?
- Are you using your annual gifting exclusion?
- How do you want to be remembered by your loved ones?
Charitable giving
- What are your charitable goals?
- Have you considered setting up charitable structures?
- Do you have excess capital to implement a charitable giving strategy?
Suggested next steps
Determine whether you’d like to transfer wealth during your lifetime, and work with your J.P. Morgan advisor, personal tax professional and legal counsel to tailor your goals to your specific situation. Consider different ways to fulfill charitable goals, like establishing donor-advised funds, and review your excess cash bucket to optimize your charitable giving and tax planning.
The bottom line
Ultimately, your financial advisor is a key player in helping you create the life you envision living, regardless of age. More importantly, these questions can help you get the most out of a meeting with your advisor, ensuring a productive and fruitful conversation. A J.P. Morgan advisor can help you create a comprehensive and personalized plan, tailored to your financial situation and goals.
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