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Updated by Avinash Mittal on Apr 12, 2019
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Tips for Choosing the Right Financial Advisor

Choosing the right financial advisor is an important decision as it can affect all the aspects of your financial well-being. Since most of the advisors display similar skillsets which makes it difficult to distinguish between them.

The guideline below will help you in finding the right financial advisor for you.

1

Do Your Research

Do Your Research

Do some research about what financial planning and strategies are and how it works? This will help you to get familiar with the terms and the concept. However, top financial advisors will be explaining these things to you as you go along, still understanding the basics will allow you to get more involved in the process.

2

Consider Your Goals

Consider Your Goals

Financial planning is all about finding the right strategies and taking appropriate steps that can help you to meet your life goals. Thus, take the time to understand what's most important to you, and what your financial and personal goals are

3

Understand the Fee Structures

Understand the Fee Structures

A good financial planner needs to be well compensated. Your advisor should disclose in writing their fee structures, the charges you’ll be paying for the services they are providing. Planners can be paid in a lot of ways- through the cost of products, a percentage of assets they’ll manage on your behalf, or a fee-for-service model based on hourly or set fees. Thus, it is essential to understand and choose the model which works best for you.

4

Demand Competence and ethics

Demand Competence and ethics

There are different designations in the financial advisory service industry; some of them require minimal education such as day or weekend courses. Having a certification represents the standard in financial planning satisfying knowledge, education, experience, competence, and ethics requirements. In fact, financial professionals must annually attest to the written code of ethics stating that their clients’ interests will always be of top priority to them.

5

Perform Due Diligence

Perform Due Diligence

It is essential to verify the planner's credentials by contacting their professional body to confirm their designation and professional qualifications.

6

Get it in Writing

Get it in Writing

Ask for a written letter (also known as engagement letter) highlighting the specific terms on which you two have agreed on and any potential conflicts of interest. This letter should also have the details about the planner's mode of compensation and business affiliations.

7

Reassess the Relationship Regularly

Reassess the Relationship Regularly

Frequent communication is the key to having a good relationship with your planner! Make sure your planner understands your long term needs and how they will be changing with time and have your plan updated accordingly.

  • Avinash is a technical person who likes to write about anything that is directly or remotely connected to technology. From the stories of hardcore techniques, with the overall effectiveness of technology in life, Avinash is passionate about all things internet.

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