How often should you evaluate the performance of my chosen financial advisor?

Regular evaluation of your financial advisor’s performance is important to ensure they are meeting your needs and delivering value. Here are some considerations regarding the frequency of evaluating your financial advisor:

1. Initial evaluation period: In the early stages of working with a financial advisor, it’s a good idea to have more frequent evaluations. This allows you to assess their performance, communication style, and the quality of their advice. Consider scheduling a review after the first few months of working together to discuss progress and address any concerns.
2. Ongoing communication: Maintain regular communication with your financial advisor throughout the year. This can include periodic check-ins, scheduled meetings, or phone calls to discuss any changes in your financial situation, goals, or investment strategy. Ongoing communication helps ensure that your advisor remains informed about your evolving needs and can make appropriate adjustments as necessary.
3. Annual reviews: Conducting an annual review is a common practice. This provides an opportunity to evaluate your financial advisor’s performance over a longer timeframe, review the progress towards your goals, and assess the overall performance of your investment portfolio. During the annual review, you can discuss any concerns, ask questions, and make adjustments to your financial plan if needed.
4. Trigger events: Certain trigger events may warrant more immediate evaluation of your financial advisor’s performance. These events can include significant changes in your financial circumstances, market disruptions, or major life events such as marriage, divorce, birth of a child, or retirement. During these times, it may be necessary to reassess your investment strategy and seek advice from your financial advisor.
5. Changes in financial goals or risk tolerance: If your financial goals or risk tolerance change, it’s important to evaluate how well your financial advisor can accommodate these changes. They should be able to help you adjust your investment strategy accordingly and provide guidance on aligning your portfolio with your new goals and risk profile.
6. Periodic benchmarking: Consider periodically benchmarking your financial advisor’s performance against industry standards. This can involve comparing their investment returns, fees, and services with other advisors in the market. However, be cautious when comparing investment returns, as performance can vary depending on market conditions and individual investment strategies.

Remember that open and ongoing communication with your financial advisor is key. If you have any concerns or questions about their performance or any aspect of your financial plan, don’t hesitate to reach out to them for clarification and discussion. Evaluating the performance of your financial advisor should be a continuous process to ensure that they are meeting your needs and helping you progress towards your financial goals.