checklist

Your 7 Step Checklist to Choosing the Right Financial Advisor

You finally have a stable job and you’re earning enough money. You’re working hard and people of your age are now thinking about saving for the future. Investing into business could be one thing. Yet, your mind is full of ideas but doesn’t know where to start and what to invest into. Of course, you are taking consideration that you don’t want to put your hard earned money into dust.

Thus, you finally decided to hire a financial advisor. It’s a decision that you need to think over a lot of times as you require someone who you can trust with your money. Taken into account that there are a lot of choices in the market with different expertise and qualifications, so who do you want to choose for?

In order for us to help you narrow down your options in choosing the right financial advisor, we have listed some checklist for you to consider before hiring one.

1. Run a Background Check on the Financial Advisor

Do backgrounds check and make sure that they do not have criminal records. It is better to be careful as you do not want to hire someone who has cases filed against them especially in financial related disparity.

Make some research and look into what are the basic qualifications that a financial advisor should possess such as their educational background, their past experiences or jobs related to this field as it is important to make sure that they know what they are doing.

2. Ask to See Examples of past Client Successes

Ask them for referees. These are those people whom they have worked with in the past or even their past clients. Talk to these people and ask them how is the success rate and performance of the financial advisor when he/she is working for them.

Check if they have previous clients that made it successful in their financial investments. What are those investments and how did is it doing presently?

Applicants for this position should be able to provide you with examples and if they know what they are doing they’ll be able to answer you with confidence.

3. Ask for a Fiduciary Pledge

A financial advisor takes a fiduciary pledge agreeing to act in the client’s best interest at all times.  It is their duty as financial advisor to advance uncover the terms in rendering the service such as their pay structure, ways of analysis, proper consequence to be given if they commit lapses and possible conflict of interests before signing any contract of agreement. The financial advisor must discuss and explain with the client if in any case there has a conflict of interest.

4. Consider the Pay Structure

The pay structure of financial advisors can be either be fee-based or commission based.

The difference between these two ways is that of their motives in earning from your investments. Commission based financial advisors can have less radical motives to drive a certain fund if they are getting a cut from that investment.

Fee based advisors have their own motives too if their earning a percentage of your annual assets. They might not be willing to advise you to have a better investment moves that would affect their fee to decline.

It would best to consider advisors too who charge on an hourly rate if you are still starting out and you still have less assets. They are those who are likely to take care of your finances as they are still trying to impress you with how they handle in helping you invest your money properly.

5. Read the Entire Contract

In engaging yourself in a certain contract of agreement, you should always have the understanding on every clauses and terms stated in the document. This is very important as it is better to protect and back you up with these legal procedures to avoid conflicts in the future.

It is also best if you consult a lawyer to proof read the entire contract and to fully explain to you all the terms and conditions that you are about to sign.

Remember, anything can happen especially when it involves money matters so you should always have some reference to support your claims if ever you get to the point that you will pursue legal actions.

6. Make Sure You Understand Their Language

In a financial industry, there are a lot of terminologies and concepts that are confusing especially because it is not your expertise. It is the role of the financial advisor to explain to you those terms and make you understand the situation.

If this role is not performed well by your financial advisor, it is best if you try another one who can do this for you.

7. Find an Attentive Advisor

In the world of work, providing professional service should be accompanied by good customer service trait. Of course, you wanted to have a financial advisor who attends to your needs. One who pick up your calls, return our emails, keeps you updated with your financial activities.

If you have this kind of advisor, he probably would gain your trust and you would be very happy to keep him for a long term basis.

At the end, it is still up to your determination to find the best financial advisor to help you with your financial investments.

You need to know what you want, identify the core values you wanted your financial advisor to possess. Always keep in mind that you need to consider the quality of performance of the advisor that you will hire, if they cannot meet what you expect, try to look for another one. Avoid settling for someone just because they have low cost. You might want to extend your budget for their fee if you want to get the best of what you want.

Remember, aim for those who are efficient and effective with their job.

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