Your Financial Health: 3 Questions to Ask Your Financial Advisor this Holiday Season
(This is not financial or medical advice. Please see a professional. I also do not get a financial kickback from this post or any sales of Cassandra’s book.)
I click with Cassandra Smalley. We share a mission to empower women in all areas of their lives. As a CERTIFIED FINANCIAL PLANNERTM, her expertise is in the financial realm.
My favorite part of Cassandra’s mission? She teaches women that their voices deserve to be heard at the financial table.
Her book, The Why of Wealth: Mastering the Steps to a Wealthy Mindset to Live a Joyful Life, reads like chatting with a wise big sister who wants to see you crush your financial goals.
Considering her book, her professional experience, and our friendship, I’ve come to trust Cassandra’s advice about money. I asked her what I should be discussing with my finance professional this time of year.
She said I should ask my financial advisor these three questions:
1. “What Tax Planning Strategies Can I Implement Before Year-End?”
If you don’t know where to start your conversation, bring up how you might address any losses from 2023. Are there losses you can harvest to offset capital gains?
You also might discuss how you could maximize 401k or HSA contributions, or be intentional about charitable gifts during the holidays.
Of course, you can ask about expenses you could accelerate in my business in this calendar year to save on taxes. (Not only is this time of year ideal for tax planning, but it can also help you forecast your cash flow and what to expect next time you need to make a quarterly tax payment or file your tax return.)
2. “What Adjustments Do I Need to Make to My Investments Given How They Performed This Year?”
At least once a year, you should look at the investments in your portfolio and rebalance back to the target you originally set.
In a diversified portfolio, some of your investments will have done well and others may be in the red. Selling the winners and buying the losers may feel counterintuitive, but rebalancing back to your original strategy will better match your risk tolerance and keep the volatility in line with your expectations. If one investment becomes too concentrated, it can introduce additional risk to your plan.
3. “How Did I Progress Towards My Goals for the Year?”
Cassandra said to ask about your most important goal. Ask about savings, paying off debt, 401K contributions, charitable giving, etc. How did meeting these goals affect your daily life?
Lastly, I note the importance of having open communication with your financial advisor. If you have thoughts such as, “I’m so in the dark about my money,” or “I’m lacking a strategy,” you may feed a cycle of anxiety.
Talking with your financial planner will help you to form a solution rather than worry needlessly.