Whether you need help managing your assets, debts, or investments, at one point you will need to work with a financial advisor. A financial advisor’s job is to make sure that your financial wellbeing is taken care of. Before you decide that you want to work with a particular advisor, these are the steps you need to take first.
- Determine Your Needs
Do you need advice about a particular investment, or do you need someone who can help manage your portfolio in general? Perhaps you want someone who will do the trading on your behalf. Whether you need help planning around your taxes, stock investments, insurances, or retirement, it is important that you hire someone who has had first-hand experience in these categories.
- Start with Referrals
One good place to start is with your family and friends, as they are the ones who will look out for your best interest. Ideally, listen to someone who has the same financial needs as yours and who was helped by the said advisor.
Once someone is referred to you, you can look them up online before actually contacting them, to get a better sense of what their firm looks like and who they serve.
- Check Their Qualifications
It’s important that the advisor you hire is certified and legally allowed to provide such service, but you shouldn’t stop there. You should check whether they have the years of expertise handling financial situations similar to yours. It’s also worth looking for other qualifications they have that show that they are working hard to learn more.
- Consider Fee-Only Advisors
To avoid conflicts of interest, it’s actually preferable to hire a fee-only advisor. While it may sound tempting to hire a professional for free, someone you’re paying would ideally act in your best interest, even if it comes at a cost.
- Find out How the Charges are Calculated
It’s always important to have a clear breakdown of how much you’re going to spend on your advisor. Do they charge an initial planning fee? Do they charge a percentage of your assets? Or do they make money from selling you a specific product? It’s important not just to find out about the overall costs, but you should know if they’ll get something out of offering you a specific product to gauge their intentions.
- Make Sure Your Advisor Knows How to Speak in Your Language
The financial world is riddled with jargons that are mostly confusing for the average citizen. It is your advisor’s responsibility to talk to you in a language that is easy to understand, and make sure that you are involved every step of the way.
- Decide How Often You Need to Keep in Touch
There are clients who are okay with setting up an initial meeting with their advisor and seeing them once a year after that. There are also those who need more support and want to hear from their advisor more often. It’s important to think about how much responsibility you want to entrust to your advisor, and how involved you want to be.
It’s also important to determine if your advisor will do the job singlehandedly or if he will be delegating to a team. Some clients are more comfortable talking to a single individual rather than having their advisor’s assistant following up with them.