7 Factors To Keep In Mind Before Choosing A Financial Advisor Selecting a reputable financial advisor is as important as saving your money. The right financial advisor can help you plan out your dream retirement, while the wrong person can create a financial nightmare.
1. Experience: Never underestimate the importance of experience when selecting a financial advisor. The more clients the planner has handled, the better are his chances of handling your finances well. The number of clients, give you an insight into the management and skills of the professional.
2. Qualifications: It is easy for any layman to call himself a financial planner so it is important for you to be sure of his qualifications. He should hold a valid degree from the recognized institute and should be a registered member. Before taking him on, feel free to ask for his qualifications.
3. Services offered: You should be certain of what all services that you are going to need and you should convey it to your prospective personal financial advisor. Ask him if he has experience in dealing with those services and if he could match your expectations. This will help you to have only realistic expectations. 4. Approach to work: An advisor can work either on a per project basis or an hourly basis. Choose an approach that best fits your budget. Over time, an hourly rate will be heavier on your budget. 5. Personal attention: Many financial advisors work alongside assistants. Ask your financial planner if he would personally handle your finances or his assistants will work for him. If your portfolio will be assigned to his interns, ask him about what his review procedures are. 6. Payment criteria: A financial planner can be paid by three different modes: A fixed fee Commission from the product A combination of fees and commission Be sure to finalize the terms, conditions, and payment plan in your agreement. Don't choose the advisor that asks for hefty advance payments.
7. Ask for his personal interests: Several companies offer incentives to financial planners to sell their products. Even though this is perfectly okay, some advisors may be tempted to sell bad products or products which are not suitable for your portfolio. Openly ask your advisor if he a member of such programs. 8. Reviews: It is very important to consider the reputation of the financial advisor before hiring them. Look online for the reviews about the financial advisor. If you want to find the first hand experience of working with the financial advisor, call their existing clients. Try to get all the terms of the contract in writing. Get it duly signed and keep it with you for future reference. Having your finances handled by a perfect stranger is a matter of some delicacy, which is why you should thoroughly check the advisor’s references.