A financial advisor can make a significant difference to your investment future and can help you land on the right side of the comfortable retirement/financial distress line.
Consulting a professional for advice allows you to draw on their expertise and years of experience to help you make important decisions. They should also keep you regularly updated with any changes to your investments or breaking investing or financial news that could affect your portfolio. It is, however, important to find a competent advisor you trust. Here are a few questions to consider when assessing your current or potential advisor:
Is the financial advisor independent?
Some advisors may be incentivized to sell certain products, while independent financial advisors don’t work for any particular product provider, nor do they earn commission off the products that are sold. Good independent advisors are experienced and objective. They can help map out a path to financial success based on your goals. Their experience is invaluable when it comes to picking the products best suited to your needs.
What are their credentials?
Ask any prospective advisors for their academic records and any related credentials. They are required by law to be licensed, pass regulatory exams and prove on a continuous basis that they’re developing and maintaining their professional competence. Read the disclosure documents that are provided to you, since these document contain information regarding the products the advisor is allowed to recommend. It is very important to be sure that a prospective advisor is qualified to oversee your investment.
What is the fee structure?
An advisor’s pay structure must be fully disclosed and transparent. Ensure that all fees and payment information is agreed upon upfront. Fees are typically charged as a percentage of your investment. This often includes initial fees and installments. Some advisors prefer to charge an hourly rate. Whatever the pay structure, you need to make sure that you understand all the costs involved before approving any payments.
Can they help you to grow your wealth?
A good independent financial advisor will help you formulate a plan to compliment your financial goals and lifestyle needs. They are there to help keep those emotional impulses in check. This allows you to invest with discipline and confidence. They offer you a rational perspective on your financial situation and help you to focus on your objectives. In short, they play a pivotal role in generating wealth. Developing a relationship with an advisor you can trust allows your plan to evolve as your goals and needs change, while stifling those emotional responses to short-term volatility.
Where can you find a good advisor?
Trust is the most important aspect of this relationship. Speak to a trusted friend or colleague for recommendations.