Yes it is. Here are some examples why a financial adviser might ask some common questions.
Q How much income would you need in your retirement to meet your annual living expenses?
You might be 20 years away from retirement date and you may think this is irrelevant. Your financial adviser needs to know what income you will need in retirement to determine how much you need to save so you have funds available to support your retirement income goal.
Q What are your income and expenses?
The income and expenses question is probably one of the most important your financial adviser will ask. This information is useful for a number of reasons. Firstly, your financial adviser will use this information to work out your cash flow. The cash flow will indicate whether you have an annual surplus or deficit. Your financial adviser will get you thinking about budgeting and help you to save more. Saving is the key to any financial strategy.
On a more serious note, you will also be helping your financial adviser meet their legal obligations. The law requires the financial adviser to know the client’s situation and needs before any kind of financial advice is given.
So, now you know why you feel as though you are under the spotlight. There is really no need to feel uneasy or break out in a sweat next time your financial adviser asks you for more details. Put your feet up and get personal. At least you will know your information is in safe hands and will help you in the long run.
19th-December-2005 | 