Your first meeting with your advisor

What to expect

You and your advisor will likely fill out a new accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition application and “know your client” form. You should also discuss:

  • your goals, so your advisor understands what you want your money to do for you and when,
  • what you expect to earn on your investments,
  • how much risk you’re willing to take,
  • how you’ll work together, including how often you’ll meet,
  • what fees you’ll pay, and
  • next steps.

“Know your client” information

Your advisor is required by securities law to know your financial situation, investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition objectives, knowledge, experience and risk tolerance. Your advisor will have you fill out a new account application form and possibly a separate “know your client” form.

These forms cover:

  • why you’re saving or investing (e.g., for retirement, education savings or other reasons),
  • what you own, what you owe and the income you earn,
  • your comfort level with risk,
  • what kinds of savings or investments you’ll need, and
  • how much you know about investing and your investment experience.

Investment policy statement

You and your advisor should also create an investment policy statement, which outlines the rules you want your advisor to follow for your portfolioPortfolio All the different investments that an individual or organization holds. May include stocks, bonds and mutual funds.+ read full definition. An investment policy statement should:

  • specify your investment goals and objectives,
  • describe the strategies that will help you meet your objectives,
  • describe your return expectations and time horizonTime horizon The length of time that you plan to hold an investment before you sell it. This may be a brief period of time or span as long as decades, depending on your financial goals.+ read full definition,
  • include detailed information about how much risk you’re willing to take,
  • include guidelines on the types of investments that make up your portfolio, and how accessible your money needs to be, and
  • specify how your portfolio will be monitored, and when or why it should be rebalanced.

 To learn more about asset mixAsset mix The percentage distribution of assets in a portfolio among the three major asset classes: cash and cash equivalents, fixed income and equities.+ read full definition and when to rebalance, watch this video.

 Key point

Your advisor must ask you about your:

  • financial situation
  • investment objectives
  • investment knowledge
  • investment experience
  • risk tolerance
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