What to Look for in a Financial Advisor
Competent financial advisors don't have a particular look about
them, even if they claim to have proof of their ability. To
protect yourself, it is important to ask the kind of questions
that will indicate whether the potential advisor has the
requisite level of skill to handle your financial affairs, or
whether you should look elsewhere. The following simple
questions will help you determine if the advisor under scrutiny
can really help with your financial affairs.
The first enquiry you should make relates to education.
Competence and quality with advisors comes in the form of a
relevant tertiary education, professional memberships of
financial advisory groups, and certificates or further
qualifications that show ongoing professional development. It is
also important to enquire about length of experience in the
financial industry, and in particular how long the individual
has been working as an advisor. This should be considered the
first step in your financial advisor selection process.
The second avenue of enquiry relates to payment for services.
This question is important as financial planners can bill
hourly, work for retainer and some work on a commission basis.
Each of these payment channels attract differing fee levels, and
this information will influence your choice of financial
advisor. It pays to know up front.
Another excellent gauge of success and ability is testimonials,
and in particular referrals. If the financial planner you are
considering cannot provide referrals you should be sceptical
about any claims about past success they may make. The opinions
of previous clients are excellent indicators of the ability of a
financial planner.
Finally, ask for a plan. Any financial advisor worth their fee
will happily outline the scope of their services, tell you what
information you need to provide them, and work with you across
all relevant areas to develop a plan for you to reach your
financial goals.