Some Useful Tips For Choosing A Financial Advisor

15 Dec Some Useful Tips For Choosing A Financial Advisor

In English, we have a popular proverb that goes, “Save money and the money will save you” – this is very true especially in the times when financial markets are so volatile. As there are new instruments of investments coming up in the rapidly changing financial market, it is very important to invest and invest smartly.

You need good financial advisors to plan your investments, but choosing who is better is a difficult task. Achal Ghai at Azara Capital and Legacy (Owner of well known Financial Advisory Firms, UAE) explains the qualities one should look for, in a financial advisor:

  • Promises: A financial advisor might promise you the moon and stars if he does be careful and run away. If an advisor promises you anything very sharply on paper, he’s probably faking the figures. No advisor is so powerful enough to promise anything accurately, it is all up to the market. If he shows graphs and figures that look too good to be true, they probably are. Ask them to explain, this will give you a proper idea of how the advisor is and how much he actually knows it, that is, are the figures correct.
  • Strategy: You must ask the bifurcation of the investments and some key indices they have invested in. If the advisor can’t specify them or is not able to make you understand, he probably doesn’t know things, beware, he might be fake. You should always ask what if the markets fall or the bullion fall?
  • Payments: Ask how the investor is paid, and ask if the payment is linked with your returns or not. He may be paid annually by the company too, this doesn’t mean the other one is better. There are many schemes where you are made to be paid progressively and have large lock-in periods, do not let your investments get stuck for too long. If his charges are not up front and straight, just say no.
  • Experience: Ask him about his experience as an advisor in the financial market. Ask him about how many clients he has. You can ask for phone numbers of the clients he has around you and call them after the working hours. Experience in the financial market is very important.
  • Certifications: There are four major certification courses that are available, they are Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Registered Investment advisor (RIA) and Certified Public Account (CPA). Personal Financial Specialist (PFS) is an additional credential that is awarded to CPAs who have comprehensive knowledge of individual financial planning. These certifications are a reassurance of their skills of financial planning and you must ask if they have anyone of these.

Take appointments from four to five well known financial advisors and meet them in person, ask them the same questions and evaluate them with the in-depth knowledge that they have. Book a second appointment and cross question them about the services others are offering you. You will get more knowledge and even they will evaluate each other with their expert knowledge. Check the references that they provide, if they don’t ask them for it. Check online if their investments were really great.

Write down the questions you need to ask them on a piece of paper and ask everything that’s there in your mind. Choosing a right financial planner is the most important decision and should be taken with due diligence because ‘A penny saved is a penny earned!’

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