What Questions Should I Be Asking?

Doing your investment research ahead of time can save you a lot of trouble and money in the long term, and we definitely encourage you to open the lines of communication. One of the best ways to avoid investment scams is to be skeptical of each new investment opportunity you encounter. You should always be willing to put in the time and effort to ask questions.

Questions you should be asking your financial advisor boil down to the following categories:

  • Questions about risk. Don’t be hesitant to ask questions about what happens when things go wrong. There’s a risk inherent in any investment opportunity, and it’s easy to lose sight of that when you’re focusing only on the best-case scenario.

  • Questions about values. Getting to know your financial advisor is often an overlooked step, but you might be surprised how much insight you get about the practical things as you get to know your advisor personally. Find out more about your advisor’s background, the types of clients he or she works with, and his or her general values when it comes to investing.

  • Questions about method. It is okay—and even encouraged—to ask your investment professional about his or her strategy and plan. Learn more about your advisors’ professional methods; if it sounds complicated, or if you don’t feel you understand, then you should proceed with caution and be ready to ask for clarification.

“Awkward” Questions to Ask Your Financial Advisor

  • “What is your investment strategy?” Ask your investment advisor about his or her strategy. If it sounds too complicated, or if your advisor cannot explain it in language you understand (relying instead on flashy technical jargon), then beware.

  • “Do you work with people like me?” Ask about your advisor’s target clients and decide if you are you of a similar age, income, and financial situation. For example, if you are concerned about saving for college for your kids, then you might not be a good match with an advisor who caters mostly to clients interested in high-risk/high-return opportunities.

  • “What’s the worst-case scenario?” Although you hear a lot about what happens if everything goes right, don’t be afraid to ask about the losses, fees, and risks associated with the investment. You have a right to that information.

Additional questions that you should ask a potential financial advisor:

  • What is your training and experience?
  • Are you registered with state and federal regulators?
  • Have you received complaints or been disciplined in the past?
  • Do you receive incentives for promoting or selling certain investment products?
  • What is your investment plan for me and my situation?
  • Why do you believe this investment is suitable for me?
  • What happens if I need to sell this investment?
  • How has this investment performed in the past?
  • Is this investment currently doing well?
  • Are there fees associated with this product?
  • Is this investment registered with state and federal securities regulators?

At the meeting, make sure you also ask for all documents related to the investment and ask where you might be able to learn more. After the meeting, carefully review the information you have and verify what you have been told about the investment product. And, of course, you should also do additional research using online tools such as FINRA’s BrokerCheck or the SEC’s Edgar database.

Questions That You Can Ask Yourself

Although we’ve often talked about the types of questions you should be asking your broker before handing over your cash, you should be asking yourself a few questions, too. Before you meet with a broker or financial advisor, it’s worth it to take the time to think about your own needs.

We encourage you to start by asking yourself these four questions:

  1. What are my investment goals? Are you saving up for retirement? Are you planning a family? Think about why you’re investing now and what you hope to accomplish in the long-term.
  1. What’s my investment “style?” Can you tolerate a little risk or do you want to “play it safe?” Are you only interested in long-term investments or do you prefer to mix it up with some short-term products? Do you have a particular interest in certain types of investments? Think about what makes the most sense to you and how you’d prefer to spread out your dollars.
  1. What do I need from my broker or financial advisor? Do you have a lot of investment experience, or are you new to investing? Do you prefer to always meet in person? Do you have any special circumstances? Think about what you really want from a broker or financial advisor, and consider meeting with a few before you choose.
  1. What do I still need to learn? What do I really understand about investing and the investment industry, and what do I really need to know? If you don’t really understand some investment products or strategies, you should look for a broker who is able to explain it to you in language you understand—but you should be doing you own research, too.

Get in Touch with Skilled Investment Loss Lawyers

For help with loss recovery after an investment scam, please reach out to an experienced investment fraud attorney with Meyer Wilson today. We have represented more than 800 investors across the nation in stockbroker mediation, arbitration, and litigation claims, and we look forward to putting our skills, knowledge, and experience to work for you. To schedule a free consultation, give us a call or fill out our confidential online contact form for more information.