Tough Questions for Your Advisor

with Barry Glassman

Tough Questions for Your Advisor

People are often curious about their investments, but don't know the right questions to ask. At Glassman Wealth, we love to empower our clients. So each quarter we provide the 5 questions we think everyone should be asking their advisor. We've also taken the liberty of answering them for you here.

If you'd like to be notified when we share next quarters suggested questions and answers, you're welcome to subscribe below.  You'll receive one email per quarter, no more, no less.

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1. Are stocks overvalued?

There are many methods of measuring how expensive the stock market is, but the most prominent is something called the P/E ratio, or price/earnings ratio.  Going back in history, the S&P 500 has ranged anywhere from a P/E of 4.78 to 44.19.

What we show in this video is that when interest rates are low, stocks tend to trade at higher valuations.  This makes intuitive sense because if interest rates on bonds and safe investments are low, investors are more likely to take more risk to achieve their return objectives and put more money into stocks.

So in our current interest rate environment, today’s stock values seem to make sense and could potentially move even higher.

2. How are you protecting my information?

Cyber criminals have a powerful arsenal of tools they can use to attack your identity and financial data.  There are traditional email hacks and computer viruses, but increasingly, cybercriminals are targeting investors and attempting to exploit their relationship with their financial advisors.  It’s critical that your advisor take steps to protect your information from these cyber threats.  The good news is that some simple steps can go a long way.

Some actions that your advisor could consider include implementing a secure file-sharing system, encouraging two-factor authentication, and relying on verbal instruction rather than email communication for sensitive items.

3. How are you growing your business or group?

Is your advisor growing for the sake of growth, or growing with you in mind?  If the firm is growing at a rapid pace, taking on a huge number of new clients, or acquiring or merging with other advisors, their staff may have less time to focus on existing relationships (you).

At Glassman Wealth, we have a $2 million investment minimum for just this reason.  We want to keep our rate of growth slow enough that we can continue dedicating the time and attention that our current clients deserve.

4. How do my taxes factor into your advice?

When is the last time your financial advisor reviewed your tax return?  There is valuable information that can be learned from it, whether it’s suggesting tax deductions you may not have considered, altering your investment strategy to fit your tax situation, or exploring strategies to minimize your future tax burden.

For example, many advisors suggest delaying distributions from retirement accounts like IRAs or 401(k)s until the year you turn 70.5, when the IRS requires you to take distributions.  However, for individuals with large retirement account balances and low current income, it may make more sense to begin taking distributions sooner while in a lower tax bracket.  These types of opportunities could be missed if your investment and tax strategies are not coordinated.

5. How much do you earn on my relationship?

In investing, you typically see some fees on your financial statement and trade confirmations, but there are normally fees that you don’t see too.  It’s important to be aware of these costs and try to keep them low, as they can eat into investment returns.  It’s also important to be aware of any conflicts of interest your financial advisor may have in recommending one investment over another.

The visible fees include transaction fees or management fees paid to your financial advisor.  Fees you typically don’t see include investment fees for mutual funds & ETFs (expense ratios), added markups on bonds, or hidden sales loads on some funds.  If you’re working with a broker or certain types of financial advisors, some of these fees may be paid directly to them.

Hidden commissions or sales loads don’t necessarily mean you should find a new advisor, but it’s important to be aware of these fees and any potential conflicts of interest.

At Glassman Wealth, the only fee we earn is paid directly to us by the client, and we earn no commissions or sales charges on any of our recommendations.

Want to receive questions like these via email every quarter?
Fill out the form below and we'll send them to you.


As always, we keep your email address secure and will never share it with any third party.
By subscribing you'll receive four emails per year. No more, no less.

Questions from Previous Quarters

Are you looking for one of our previous Quarterly Questions, or one you missed? Check out our Previous Quarterly Questions!