Financial Adviser

All the media hype about saving for the future mainly depends upon the number of wages you earn. You know very well that there is a need for you to invest in different schemes but, it is also true that you don’t have much idea about conducting the job.

Here comes the necessity of hiring a professional financial adviser, who could help you out of this troublesome situation. In order to get you on the right track in your search, here are some important things which you need to know before hiring a financial adviser.

What is the difference between an investment adviser and a financial planner?

Most of the financial advisers can work as an investment adviser but, not all investment advisers can serve you as a financial planner. Some financial planners have the capacity of assessing almost every aspect of your financial life, including investments, taxes, insurance, estate planning, etc.

So, don’t forget to build a clear idea about what a financial adviser can proffer and what are his limitations before hiring.

Professional Designation of the Adviser:

If your adviser has a profile in social media networks like LinkedIn, you can start checking his or her background. It is very much important to check the educational background of your adviser. Does the person have a degree of his working area? How long is the person providing financial advice to the clients? Getting all the answers to these questions might help you to pick a qualified person for handling your hard-earned money.

So, try to find out whether your adviser holds any professional certification like- CFP( Certified Financial Planner) or the PFS( Personal Financial Specialist). but, if you are looking for someone with more of a retirement focus you may want to seek out a Chartered Retirement Planning Counselor (CRPC), who has completed intensive training in retirement planning through the College for Financial Planning.

Performance Record:

Ask your adviser to provide you with some examples of how he has helped his clients in getting out of trouble through good or bad times. You can also think about doing some researches on the adviser for detecting, whether he was involved in any kind of ethical lapses or been involved in any kind of legal issue. If an adviser has been disciplined for any unlawful or unethical behavior, it will show up on the Financial Industry Regulatory Authority’s (FINRA) Broker-check site. So, you can also check your adviser’s background from there.

The procedure of Paying an Adviser:

Before hiring a professional adviser, don’t forget to learn every detail about the process of paying him or her. Generally, you can choose any of these following ways to pay:-

 An hourly fee for the exact time he has spent on your work.
 A certain percentage of the total value of the assets, which they are managing for you.
 A fixed fee, which they generally charge.
 Some combination of the above-mentioned procedures.

Get multiple opinions before making any decision and you can also think about asking your adviser whether the fee is negotiable or not.

What is the Exact Service your Adviser Offers:

Do you have any idea that whether your financial adviser is offering more than one service? If the answer is yes, then it is also essential for you to find it out. But, in order to manage your finance properly, there is a need for you to hire a professional financial adviser, who is an expert in managing only one type of finance.

How many Clients do you Work with?

Before hiring a professional financial adviser, you should have a clear idea about how many clients he or she is serving. Various advisers have their own capabilities of handling a certain number of clients, depending upon the complexity of the client’s work. Although, there is not an exact number of clients, which can prove the effectiveness of an adviser. In spite of this, try to find someone who will be glad to focus on your work only.

How will a Client know that whether the Advice is Working?

A good adviser should always think about a way of monitoring, whether his advice is working or not. This might also mean comparing returns of recommended mutual funds or ETFs. There are some other ways too, of which you can get a clear idea about your progress. Ask your financial adviser to show you that, whether you are moving towards a secure retirement or not.

Finally, try to stay away from those advisers who are prone to make some unbelievable promises. If your chosen adviser has a complex way of working, don’t forget to ask for some documentation that can show the merit of that particular approach.

James Paul loves to write about personal finance and money management tips. Along with his personal finance blog, he is a regular contributor to many other blogs where he writes to help people manage their money effectively.