Investing is a serious process that can serve as the foundation for your financial future. If you are new to this field, it’s natural to have many questions and doubts. Decisions often involve not only potential profits but also investment risks, which are even greater without relevant experience.
This is precisely where financial advice becomes essential. To start your investment journey with confidence, it’s crucial to ask your advisor the right questions. Below are 10 important questions that can help you evaluate the advisor's experience and feel more secure in your decisions.
This is precisely where financial advice becomes essential. To start your investment journey with confidence, it’s crucial to ask your advisor the right questions. Below are 10 important questions that can help you evaluate the advisor's experience and feel more secure in your decisions.
1.How long have you been working in this field, and what experience do you have with different markets and clients?
Why this matters: To build trust, you need to know whether the advisor has sufficient experience working with various markets, instruments, and risks. Experience also implies they’ve already navigated market ups and downs.
2.What licenses and certifications do you hold?
Why this matters: Valid credentials, such as CFA or CFP, ensure the advisor meets current professional standards. This question will help you understand whether their guidance is based on established norms.
3.What is your fee model—fixed fee, commission, or percentage of assets?
Why this matters: Investors need to understand whether the advisor’s interests align with theirs. For example, if the advisor earns more when you invest more, they may not be completely impartial in their advice.
4.How do you assess an investor’s risk tolerance?
Why this matters: People perceive risk differently. Some prefer stability, others seek high returns. This question will show whether the advisor is willing to take an individual approach.
5.What investment strategy do you recommend for beginners?
Why this matters: Investing can be difficult for beginners, and they need a clear and stable strategy. This question will help reveal whether the advisor offers not only profitable but also realistic options.
6.What are the main investment risks I should be aware of?
Why this matters: This question reveals not just potential gains but also possible losses. If the advisor doesn’t address risks, they might be withholding information or lacking a professional approach.
7.How do you monitor my investment portfolio, and do you provide regular reports?
Why this matters: Investors should be confident that their portfolio won’t be forgotten after the initial investment. Regular reviews are essential to respond to market changes.
8.What principles guide your selection of investment instruments (stocks, bonds, funds, etc.)?
Why this matters: The answer will show whether the advisor uses analytical reasoning and bases investment choices on data and experience, rather than blindly following trends.
8.Do you collaborate with tax and legal professionals to ensure my investments are compliant and tax-efficient?
Why this matters: Investment decisions involve tax obligations and legal considerations. It’s important to know your advisor can coordinate with relevant experts to help you avoid legal issues and reduce tax burdens.
9.Can I see feedback or testimonials from previous clients?
Why this matters: Client feedback is one of the best indicators of an advisor’s work. If they’re willing to share references, they’re likely confident in the quality of their service.
CONCLUSION
Getting financial advice is crucial when building your portfolio. For beginners, it's not just about knowledge it’s also about choosing the right person to guide you. With the right advisor, risks become more manageable, and your chances of success increase.
Remember: the questions you ask your financial advisor determine how successful your investment journey will be.
Remember: the questions you ask your financial advisor determine how successful your investment journey will be.
HOW TO INVEST?
Open a free brokerage account with Unibank Invest and start investing. The Unibank Invest app provides access to the world’s largest stock exchanges, enabling you to purchase international investment instruments, such as stocks, bonds, and ETFs.
To open a brokerage account, fill out the online application or call +374 43 004 382.