You've decided it's time to talk about your finances. You've made an appointment with a financial advisor, but what happens at your first meeting with a financial professional? What does a financial consultant do? Here, Fidelity's Ryan Viktorin, CFP®, vice president and financial consultant at Fidelity's Investor Center in Framingham, Massachusetts, walks through her process.
Note: This article reflects working with Fidelity only. Other firms and financial institutions may work differently with their clients and offer different services.
What is a financial advisor?
A Fidelity Wealth Management financial advisor is an individual who helps you review and understand your current finances and develop a savings and investing strategy to support reaching your financial goals.
Working with one is not about having everything figured out; it's about starting the conversation about you and your finances and building a plan to help ensure your strategy supports your goals. You don't need to have everything organized before you meet.
Why work with a financial advisor?
Fidelity believes that everyone should have and make decisions within a financial plan, whether you're just starting out, in the middle of your career, or nearing the end of your career.
What does a financial advisor do?
A financial advisor works with you to help craft a plan for your money and help you reach your goals. They can also offer ideas to help grow and protect your assets along the way. Here's how they go about accomplishing that at Fidelity.
Step 1: They get to know you to find out about your goals
Viktorin starts with the "who, what, and when." Who are the important people in your life? What are the things you're hoping to accomplish? When are you hoping to accomplish those goals? In asking these questions, the consultant is trying to understand your priorities, concerns, and life stage. "Retirement is a major goal for most," she notes, "but also, buying a house, saving for college, or just growing your money for the future so you have choices down the road." The "when" is important because how close you are to that goal can influence saving and investment decisions.
This broad exploration is not about heavy number-crunching, but rather, establishing a baseline from which trust and thoughtful collaboration can grow. For Viktorin, a successful first meeting ensures "the client has a comfort level with me and the process of helping them build a plan."
Step 2: They gather data to understand your full financial life
Consider the second phase the "Where am I right now?" discussion, so the advisor can get a clearer picture of where you stand. As the most concrete phase, the advisor will collect specific financial information, including:
- Income sources and amounts
- Expenses
- Debt
- Accounts (retirement, brokerage, savings, and more)
- Balances in those accounts
- Regular contribution amounts to those accounts
- Assets and investments
- Risk tolerance
"Sometimes there is fear [of this phase], because clients think they will somehow be judged for the current state of their finances, and it's just not true," Viktorin says. "We are not here to judge your investments or your spending. We're here to help you get a deeper understanding of your strategy and feel confident it will support your vision for your life." For clients who find data or the process overwhelming, Viktorin and her team start small. Perhaps they'll hold one conversation only on expenses, and the next conversation only on accounts.
"Another area we will spend time on is the level of risk in your investment plan and whether that level aligns not only with your goals but also with your risk tolerance—or how comfortable you are with the ups and downs of the market," Viktorin explains.
Step 3: They analyze your savings and can use tools to provide an estimate as to where you are in reaching your goals
The next phase involves analyzing the information gathered in step 2 to see whether your current setup supports your overall goals—or if there are different options to consider. The advisor will explore topics such as your:
- Current savings trajectory
- Asset allocation, aka your mix of investments
- Retirement readiness
- Cash flow in retirement
- Income in retirement
- Legacy projection, or how much you could leave to heirs
This phase can help clients understand:
- "Am I on target?"
- "What happens if I do nothing?"
- "What impact could changes make?"
Step 4: Planning next steps for managing money
Think of this as the "Where do I go from here?" phase, when you turn insights into action. You and your advisor might discuss making adjustments.
Potential next steps might include:
- Increasing contributions to investment accounts
- Paying down debt
- Changing asset allocation
- Considering investment strategy changes
- Rethinking income strategies, particularly near and in retirement
- Getting more or different insurance coverage
- Integrating estate planning
- Implementing tax-efficient saving, investing, and/or withdrawal strategies
During this phase, there's also an open discussion about who will be responsible for implementing and maintaining the investment strategy. "I have clients who love diving into their investments, doing the research, placing trades, and carefully monitoring and maintaining their allocation," says Viktorin. "Other clients say they don't have the time to spend on investing or don't have the knowledge. For these clients, we explore having investment professionals handle the client's investment strategy for them."
If professional management is something you want to explore, though, the advisor will make sure you understand the strategy, fees, and how changes will be made over time.
What does a financial advisor do after a financial plan is created?
After a financial plan is created, the next steps depend on where the clients are in their lives. Those just starting out may need the most help in going through this process but can maintain their plan and saving and investment strategy on their own. These clients may have fairly simple strategies and ask when they need more assistance. As time goes on, though, this could change.
Clients with more complex financial pictures and greater asset levels could warrant an ongoing relationship with advisors like Viktorin and her team. Conversations at that point could include topics such as:
- Promotions that come with higher income
- Asset growth
- Private or public stock plans
- Deferred compensation arrangements
- Increased number of accounts
- Tax code or legislative changes
- Economic or market changes
In addition, life events such as the following could trigger an update to the plan and more guidance from an advisor:
- Getting married
- Buying a house
- Welcoming a child or grandchild
- Getting a new job
- Unexpected job loss
- Starting a business
- Selling a business
- Retirement
- Getting divorced
- Death of a loved one
- Getting an inheritance
If a continuous relationship is appropriate, you and your advisor would maintain ongoing check-ins at the right frequency for your situation. "The plan you and an advisor build together is a living, breathing system that will change as you and your circumstances do," Viktorin says.