7 Questions to Align Your Financial Goals

By: Michael Adolfo Fernández Vázquez, CIMA®, CPWA®, MBA

Any day is a good time to discuss financial goals with your investment¹ advisor. Therefore, we share seven (7) questions that can help you achieve your objectives throughout the year whether you’re an individual or a business owner.

1. Is your current strategy aligned with your financial goals?

It’s wise to review your portfolio’s objectives and financial goals each year. Talking with your investment advisor helps them determine if any of your goals have changed, which, in turn, may trigger adjustments to your strategy. Changes can stem from personal circumstances or from shifts in the environment. For example:

• Economic outlook changes
• Geopolitical risks
• Interest rate changes
• Adjustments in economic indicators
• Changes in the business cycle

While investment strategies aim to provide stability across different time frames, it is important to acknowledge that:

• Risks will be present, and rebalancing² may be necessary.
• If the past months or years have demonstrated consistent positive or negative returns, you may need to assess the balance of your investment portfolio.

2. How do you see your portfolio’s impact on taxes this year?

Your financial advisor can recommend products that take tax implications into account. Some securities are taxed as ordinary income, while others have their tax impact based on the portfolio’s holding period at the time of sale. Certain securities may generate tax-exempt interest depending on the type of account and your investment goals.

3. Do you have any goals for this year or the next few years that you should plan for now?

We celebrate various achievements in our lives that can lead to new goals and changes in asset allocation. If you welcome a new family member, you may want to consider setting up a college fund. If you are approaching retirement, explore strategies related to your retirement plan or stock portfolio.

4. How does your investment portfolio’s performance bring you closer to your financial goals?

While many investors compare the performance of their investments to the performance of the market, you might want to consider a Goals-Based Investing measurement framework. This framework sets financial goals and evaluates your portfolio’s performance relative to those goals. A conversation with your advisor should focus on how your investment strategy advances your progress toward your objectives and keeps attention on them instead of merely attempting to outperform the market.

5. Are you approaching retirement, or have you already retired? Have you discussed succession planning with your financial advisor?

We often discuss preserving assets during our lifetime; however, it is crucial to develop a strategy for protecting and transferring our wealth to our descendants. A poorly executed or structured plan can result in substantial tax implication for our heirs.

6. Have you considered having an investment policy for your corporation?

An investment policy ensures that the corporation’s interests take precedence over those of the individuals making investment decisions. This policy could provide guidelines and asset management support to owners, investment committees, and financial advisors. A well-structured plan streamlines asset transfers, minimizes tax implications for heirs, and protects assets.

7. You don’t have an investment account nor have an established plan. How can you begin to get organized?

Financial professional can help you get started, set goals and implement your plan. These questions can help you to calibrate and analyze your current plan.

At Popular One, our team of experts is prepared to provide guidance on this subject and assist with additional services, including managing your finances, banking relationships, and risks. For more information about our products or investment advice, please contact your Popular Securities financial advisor or write to popular_securities@popular.com.