What the heck is your financial advisor talking about?

Have you ever noticed that each profession has it's own language? When I hear physicians taking call, talking to colleagues on their cell phones, some of it sounds like a foreign language to me. I think the language your financial advisor uses may also be less than crystal clear.

When you hear words like "position" and "asset allocation" and "outperformance", what does it mean to you? Probably not much.

When you choose an advisor, look for one who can tone down the rhetoric and convey their point clearly. For instance, a good financial advisor will help you make a decision about your asset allocation, but a great advisor will take the time to explain that "asset allocation" really means "mix of stocks and bonds", and then they'll tell you WHY the decisions about your mix of stocks and bonds is so important (it's the only way you can control the risk, or ups and downs, in your investment accounts).

Finding a financial advisor who speaks your language can be one of the most important decisions you will ever make. After all, if you don't know PRECISELY what they're talking about, how can you possibly be expected to follow their advice?