What Questions Should I Ask A Potential Financial Advisor?

What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice.

To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Test everything. Hold fast what is good. First Thessalonians 521. Hi, I'm Rob West.

In that verse, the apostle Paul teaches that we should practice discernment in all things. We would include financial advice. So what questions should you ask a potential financial advisor?

I've got a list for you. Then it's on to your calls at 800-525-7000. That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions. We occasionally get this question on the program when folks are looking for a financial advisor.

How can I choose someone I can trust and who's a good fit for my financial situation? Fortunately our parent organization, Kingdom Advisors, has more than 1600 Certified Kingdom Advisor professionals and we always encourage you to connect with one for whatever area of your finances you'd like help with. When you click Find a Professional at faithfi.com, there's actually a list of specific questions for each financial discipline. So whether you're interviewing an investment professional, a financial planner, a CPA, a state attorney, or an insurance professional, you'll know just what to ask.

By the way, we put a link to that in today's show notes. There's also a very important list of questions that you should consider asking any financial professional you interview. By the way, we always advise that you interview two or three to find someone you'd like to work with.

So let's go over some of those more general questions. The first thing you might want to find out is how long your candidate advisor has been on the job. So you might ask, how long have you been in practice? What professional certifications do you hold? Can you tell me about your practice or what are your areas of specialty? Next you'll want to determine what and how services will be given.

It's important to understand these things to form reasonable expectations. So you might ask questions like, will you or your associate work with me? How long will it take for you to do my work? What are your client response times and client communication methods?

In how timely a manner is your work generally done? You should also ask for referrals to find out what others think of your prospective candidate and these should be current or recent contacts. So you would ask, do you have clients with situations similar to mine who might be willing to speak with me about your services? And do you have other professionals who might be willing to speak with me as well?

Now this next set of questions might seem difficult to ask, but any good financial professional should be able to answer them easily. They concern reputation. Are you in good standing with your local professional associations? What organizations have regulated authority over you? Have you ever been cited by a professional governing body for disciplinary reasons? Have you ever had any complaints filed against you with any organizations that regulate you? Have you ever been publicly disciplined for any unlawful or unethical actions in your career? And have you ever filed for bankruptcy?

As I said, these are tough questions to ask, but you shouldn't shy away from them. Okay, all that's left now is compensation. What and how does your candidate expect to be paid? So you can ask, are you compensated by fees, commissions, or both? Do you charge for initial consultations? How are your fees calculated? Are fee arrangements set in writing beforehand? If they charge hourly, what are your hourly rates and what are the hourly rates of your associates? Do you charge for every phone conversation and or meeting? What do you project my costs would be for your services? And what can I do to keep your fees to a minimum? So that's your comprehensive list of questions to ask any financial advisor you might be considering.

Again, always interview two or three. Well, we hope you start your search with Kingdom Advisors. Again, you can just head to faithfi.com and click find a professional. And here's why a certified Kingdom Advisor is really important. We want you not just to get competent financial advice from a trusted source, but we believe it's really important that your values are aligned with the advice and investments that you're receiving.

And here's why that's important. The Council of Scripture has so much to say on money management. And if your advisor understands the heart of God as it relates to money management, he or she can bring God's Word to bear in the council that you're receiving to ensure that it aligns with what's most important to you. Again, to find a CKA in your area, just head to faithfi.com, that's faithfi.com, and click find a professional. All right, your calls are next. That number, 800-525-7000.

That's 800-525-7000. I'm Rob West and this is Faith and Finance, biblical wisdom for your financial decisions. We'll be right back. Absolutely free! We know you've learned to be suspicious of those words, but really, you can get biblical financial wisdom delivered to your inbox each week, absolutely free. Articles, videos, podcasts, and special offers on biblical resources. Nearly 60,000 people receive our free weekly wisdom email, and you can too. Get your free FaithFi account by going to faithfi.com and click sign up to begin receiving weekly wisdom in your inbox. As the leading advocate for the Christian financial industry, Kingdom Advisors serves the public by promoting the integration of a biblical worldview across every aspect of the financial services industry. And we serve a growing network of thousands of Christian financial professionals, equipping and empowering them to carry biblical financial wisdom to their clients, peers, and community. For more information, visit kingdomadvisors.com.

That's kingdomadvisors.com. Are you overwhelmed by financial fear and anxiety? Well, you're not alone. Here at FaithFi, we hear it every day. People weighed down by worries related to wealth and money, but financial anxiety isn't about the size of your bank account.

It's really ultimately about the condition of your heart. That's why we created the Look at the Sparrows 21-day devotional that will help you find peace through Jesus' teachings and remind you to trust in God's provision. You can replace your financial anxiety with peace today when you visit faithfi.com slash sparrows, that's faithfi.com slash sparrows and start your journey today. It's a beautiful 21-day devotion and we'd love to put it in your hands. All right, let's begin today.

We're going to start in New York and welcome Michael. Go ahead, sir. It's always a pleasure to speak with you. Thank you. I appreciate your call.

Sure. My question is, what is the minimum timeframe to hold losing stock before selling and reinvesting in a potential different stock? And then a little trailer got a lead on a brand new stock. What would be a good resource to research the legitimacy and potential of a brand new stock?

Yeah, it's a good question. And you know, it really depends on in terms of when to sell it. It's going to come down to, you know, what the company is, what sector the economy is, for instance, a sector that might be in a slump right now, but maybe it's expected to rebound. You know, I think you can determine if it's a good time to sell by looking at what's called the stock's valuation metrics. So you compare the stock's current price to earnings and price to book ratios with historical averages and industry peers. And if you find a stock is significantly overvalued, it might be a good time, at least one data point to go ahead and sell and cut your losses.

From a tax standpoint, if this is in a taxable account, obviously, you could factor that in to whether or not you have gains that you could offset with the sale of this, you know, perhaps to save yourself some taxes. If you work with the CPA, you can have that conversation, especially as we approach year end to see if there's any kind of strategic moves you can make to offset taxes for losing stocks you want to get rid of, get a generally speaking, you know, a lot of times you'll hear investment managers say cut your losses, let your profits run. And that's kind of a general idea of you know, if you've got a losing stock, let's just go ahead and say even though we've lost it, let's not try to wait necessarily for it to come back. And those stocks that are running, let's not try to necessarily lock in our profits. But again, it's all depending upon the individual company and the sector.

And then there's economic forces. We also want to make sure we're staying long term in our focus, which doesn't mean you can't ever sell a stock. But it does mean we don't try to jump in and out unless you're a trader professionally trained and understand the implications of that. Not trying to jump in and out and in capture short term moves that really kind of moves away from the idea of steady plotting that at least for most of us, again, if you're not skilled in that area, that's not your full time job. For most of us, you know, that's often the way to go.

But are some of those things helpful? Yeah, I think so. In a quick resource for a brand new stock that I got a lead on. Yeah. Where do you trade?

What is the platform that you use? Actually, I've got a 401k and also in the same company, I can purchase stock on a smaller conventional IRA. Okay, got it.

Yeah. So you could look at, you know, the platforms there. You know, MarketWatch would be one, if it's a mutual fund Morningstar would be another. Yahoo Finance, you know, it would be, you know, all of these platforms are going to offer you free insights into kind of some of the high level metrics that you could use, even accessing equity analyst reports, you know, that would be available online.

So I think just by doing a quick search of the company you're looking for, you know, you'll you'll find the maybe the top sites, but I would say Yahoo Finance, MarketWatch, there's one called Seeking Alpha, and then Motley Fool, all of those have plenty of information on the stock of your choice that would be readily available at no charge. Okay, and a quick thank you because you educated me this spring on precious metals and silver, and I have invested in silver, silver is doing well. So thank you so much.

Excellent. Thanks, Michael. We appreciate your call today. Lord bless you, sir.

Let's go to Arkansas. Hi, Ann. Thanks for your patience. How can I help? I appreciate your program.

Well, thank you very much. A couple of months ago, the company that administers my retirement fund notified me of a data breach and they offered free monitoring through quote, I believe that was for two years and I signed up for that. Well, this week, our bank has notified us of a data breach and they are offering free data monitoring through a company, CYEX, for 12 months.

I would like to know if they're a reputable company and if it's advisable to have two different companies monitoring you at the same time. Yeah, yeah, that's a good question. Where are you in the Kroll free period? Are you still, do you still have a ways to go on that one? Oh, yeah.

It started just a couple of months ago and it was for two years. Okay. All right. Very good. Yeah.

So, I mean, here's my position on this. I don't think unless you've been the victim of ID theft or you have somebody who's willing to pay for it for you because of a breach, which seems like that's just kind of a rolling thing now because of how often that's happening. My opinion is there's no need to pay for credit monitoring as long as you're using best practices, checking your credit score, which you can do free now at creditkarma.com and even your website or, excuse me, your credit card.

Many of them will offer that. You're checking your credit reports on annualcreditreport.com three times a year. You're not clicking on phishing links.

You're changing your passwords. You're not doing financial transactions on public Wi-Fi like at a coffee shop. I mean, if you're doing those things, then I don't think you need to be paying for adding another subscription for credit monitoring. Now the exception to that is, go ahead, most of these are free. Yeah. And so for your case, I think absolutely. Somebody's offering it to you free.

Why not have that extra layer of protection? Do you know, Kroll is very reputable. I'm not as familiar with, uh, you know, Cyax. I know they're a, they are a legit company. I just haven't read any reviews on them. You know, does it hurt for you to have to, no, I don't think so.

Although Kroll is, is one of the big ones. And so I think they'll probably be sufficient, but if they're paying for it, you know, at least the, the new one would continue after Kroll drops off because this is a new instance. So again, I don't think it's a problem. Just make sure they're not automatically renewing it at the end of the free period. Then all of a sudden you're paying for something that you didn't intend to. Is it bad to have overlapping monitoring? No, I don't think so as long as somebody else is paying the bill.

Okay. Uh, we have credit freezes with all three credit bureaus. So is there any point in us getting our credit reports?

I think there is because here's the thing. Credit reports on occasion will have inaccurate information. So even if, you know, somebody hasn't compromised your account by opening a fraudulent account because the credit freeze should take care of that because the lender won't be able to access the credit file to approve the loan. There could be an accurate information on there and you just don't know about it. So I think, you know, at least a couple of times a year, I'd go to annual credit report.com, pull it, just make sure there's nothing out of the ordinary that you think is incorrect.

It's less of an issue with a credit freeze, but I'd still do it. Okay. Thank you very much. All right.

And thank you for calling. May the Lord bless you. And, you know, as we think about our role in managing God's money, it's a high calling. Think about this. You and I, we're money managers for the King of Kings. So we want to get it right.

It doesn't need to be scary or we didn't have any anxiety around it. We just need to look to God's word, the source of truth. We'll be back with much more just around the corner, stick around. Are you searching for a way to become a better, faithful steward of the resources that God has given you? Well, download the FaithFi app and join the 37,000 others who are already using our app. The FaithFi app will provide you with wisdom, community, and simply help you stay on track with your finances. We have three money management options to choose from. So find an option that fits your unique needs. It's available on desktop or mobile.

Simply go to faithfi.com and click app to get started. Are you overwhelmed by financial fear and anxiety? At FaithFi, we hear it every day. People weighed down by worries related to wealth and money, but financial anxiety isn't about the size of your bank account.

It's about the condition of your heart. That's why we've created Look at the Sparrows, a 21-day devotional that'll help you find peace through Jesus's teachings. Request a copy of the Look at the Sparrows devotional today with your gift of $25 or more by going to faithfi.com slash give. Welcome back to Faith and Finance.

I'm Rob West. Before we head back to the phones, let me remind you, if you haven't checked out the FaithFi app recently, I'd love for you to do that. It is something Julie and I use every day to stay on budget.

We're constantly looking at where we stand in each of our envelopes so we can make course corrections throughout the month, and in light of expenses being up across the board, it's more important now than ever. If you'd like to download the FaithFi app, you can do that at faithfi.com. Just click app. All right, let's head back to the phones to West Palm Beach, Florida. Donna, you're next up.

How can I help? Oh, thank you so much for taking my call. I'm rather recently retired, and I have a nine-year-old car, which I love, doesn't have all the bells and whistles, but that's fine. But I've had some friends recently purchase cars, and I'm afraid that how much of an urgency is there because I don't really like the idea of having to be forced into possibly purchasing an electric car or a semi-electric car. I'm more comfortable with the older kind of car. Is there an urgency, or can I just use my wisdom and stick with my older car that's running fine, and of course, I don't use it as much anymore?

Yes, ma'am. You know, I would say stick with your wisdom and stay with that car. It's not completely without merit to say that we're not moving toward a day where we're going to see more and more electronic cars. In fact, what the Biden administration is putting forward, and I don't think this has come to pass yet, but they're moving toward forcing more than half of new car sales to be electric by 2030, I think was the last I had seen. But again, I mean, that's still quite a bit down the road, and even by 2030, we're talking about still half of new cars being not electric, so a typical combustible engine at that point. So I think we're still quite a bit of the ways off from this, and it's not going to go without a lot of folks saying that this is not the way we should go, just for a variety of reasons, including the fact that all the claims about it affecting our climate, a lot of folks feel are unmerited. So I would say let your wisdom prevail here.

Hang on to that car, save a bunch of money in the process, and know that if you get to the place where you need a new car, even, you know, five or six years down the road by then, if nothing changes, and a lot could change, we're still going to have half of new cars that are not electric in 2030. Oh, wonderful. I did not know that. So I appreciate that information very much. All right. God bless you, Donna. Thanks for being on the program today. Let's head out to Texas and welcome John to the broadcast. Go ahead, sir.

Wait, Rob, thank you for taking my call. Sure. My question pertains to capital gains. My wife and I are both retired, and so we have a piece of property. So we're talking about long-term capital gains, it's a rental property.

We're thinking about settling it. My question is, I've been doing some independent research, there are different interest rate categories I know, but in terms of what category you fall into, is that based upon your total income or your adjusted gross income? Is that figured on your adjusted growth, that's my first question. Is it the total income before deductions or is it your adjusted gross income?

Yeah, it's a good question. So it is, it's what they call taxable income. So it's your ordinary income plus interest income, dividends, rental and royalty income, capital gains, so both short-term and long-term, other gains, taxable Social Security benefits, retirement income, and then certain adjustments and deductions, such as a contribution to a retirement account, health savings accounts, student loan interest, can reduce your total taxable income, and then the resulting figure would then determine your long-term capital gains rate.

Does that make sense though? So in other words, when I found my 1040SR this year, the bottom line in regards to whether I would pay capital gains if I sold a property would be the adjusted gross income after everything you just said is dealt with. Yes, that is true because you would be able to take the deductions against that, but you do need to add in capital gains as a part of that taxable income calculation. In other words, if I sold my property, say for $100,000 of capital gains, I would add that to my gross income to determine which category I fell in.

Yes, exactly right. So the capital gain, even though it has a preferential tax rate in terms of what you would pay, those capital gains, both short-term and long-term, are a part of that total taxable income calculation to determine what bracket you fall into for long-term capital gains. Okay, so I think this year, the zero bracket is like $94,050. So you're saying that if my total income after deductions and everything else was under $94, I would not pay capital gains? That is correct. But so long as you understand that whatever that gain is for that property you're selling in that year gets added to those other income sources to determine which bracket you fall into.

So if you after all of your income minus your deductions, you had $50,000 in income, but you had $100,000 in gain on that property sale, you'd have $150,000 in taxable income, which would be used to then determine your long-term capital gain rate. Okay, okay. Well, that makes it difficult. Yes, it does.

Yes. It makes it difficult. It makes it difficult to pay zero, doesn't it?

It does. I mean, unless you're selling a pretty small piece of property in the case of real estate, so it does. Now, you are getting preferential treatment, at least under the current tax law with the capital gains, because you're not having to pay income taxes on it. You're paying the preferential capital gains tax for long-term rates, so you're dropping that down to, let's say, 15%. But yes, to get into that zero strata, it is going to be challenging. Okay, one last thing real quick. If we went ahead and sold and we had some capital gain, we think about reinvesting that, would you have suggestions in our situation, reinvested it, hope it'd grow it where we might fall back if we needed a monthly income?

Yeah. I think it always has to do with your risk tolerance and your time horizon. What I'm hearing is, you said, may use it for income, but I'm also hearing you could probably look at this as long-term money, in the sense that even in your 70s, and we haven't talked about your age, but I would say you should have a 20-year time horizon on the money. If that's the case and you're willing to take some risk, I would say, well, let me ask, what is your age? 76.

Okay. I'd probably be thinking about a 70, 30 portfolio, 70% fixed income, maybe 30% stocks. You could put 5 to 10% in precious metals if you wanted to, as a part of that, maybe take off of each side of that, but I think that would make some sense, and then you'd have a growth component with the stocks. You'd have some nice income from the bonds, and those could be government, corporate, and then as these interest rates come down, those underlying prices of the bonds would appreciate, so you'd have some capital appreciation in there as well, and perhaps you could get an advisor to oversee that for you. That'd probably be my first choice.

If you wanted no risk, you could look at an insurance product like an annuity. Hope that helps, John. Thanks for your call, sir. Big thanks to my team today, Jim, Devin, and Sandy. We'll see you next time. Bye-bye. Faith and Finance is provided by Faith Buy and listeners like you.