Voluntary Separation Package – Key Questions to Ask Your Financial Advisor

Dan Seder: Employees at General Motors are about to face a decision that regularly impacts employees across corporate America. If you're faced with a voluntary separation package, here are some key questions to ask your financial advisor before engaging.

As you're likely aware, General Motors recently announced a voluntary separation program for 58,000 of its salaried employees. And so, as financial advisors come out of the woodwork, in what might be one of the most important financial decisions of your life, it's important that you're asking the right questions before you engage. There are five things to consider.

Make sure you're asking first and foremost about credentials. There's a number of specializations in the financial advisory space. Those could include things like estate planning, tax and or investments. But at a bare minimum, you want to make sure that you're working with a CFP, a certified financial planner, which is the gold standard in financial planning.

Secondly, is your financial advisor a fiduciary? Simply stated, are they putting your best interest before their own? Thirdly, what is the team structure and or resources available to your financial advisor? It's important that they have some backup if they're unavailable, in another meeting, on a long vacation, or generally out of the office.

Fourth, what's the service offering? There's financial planning and investment management, and it's important that those two services aren't mutually exclusive. You want to make sure that you hire an advisory team that's an expert in both. Finally, when it comes to investment management, is your financial advisor outsourcing the portfolio management to a third party, like a mutual fund, an ETF and or annuity? Or are they handling that service in house? What we found is in house investment management is generally more cost efficient for the end investor. So, with a major decision ahead of you and a lot of people knocking on the door, make sure you're asking the right questions before you engage. And it's not a bad idea to talk to more than one advisor.

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