The advent of the computer and the subsequent inter-connectivity due to the internet has meant that getting information on an investment or investment advice has become quite easy and cheap.The advantage of this is that today’s investor is quite knowledgeable about his preferred investments but does it entirely eliminate the need of a financial advisor? No.
Although,the place of the financial advisor has come under quite some considerable threat,I’ve always believed a combination of both channels to make investments decisions can come in handy.Since all is required to get information on an investment is as easy as initiating a Google search,the place of the Financial advisor therefore remains providing the much needed direction that matches your needs.So how does one go about finding a suitable financial advisor?
I recommend three steps that should be helpful.
#1 Establishing your investment needs.
The search for a financial advisor points to the need to secure a smooth financial future.However,this journey should normally start with the would be client establishing their needs.Needs can range from developing of investment plans,Retirement plans,Tax plan,will or the desire to get a workable approach to savings.Normally,in your initial meetings,a financial advisor seeks to understand these in order to aid you in your goal setting to match your level of risk tolerance.For instance if you have established your primary need is to get expert advice on Retirement plans,a niche financial advisor on retirement planning should be what you look for.
#2 Researching for the Ideal Financial advisor.
After establishing your needs the next step is to find the financial advisor who can help you perfectly meet your goals and most importantly at what cost.Are they fee based or commission based.At the moment,we have Financial advisors who operate as Independent Financial advisors and tied Financial advisors who are attached to a financial institutions.
Normally,The advantages of either would range and differ but the objective of this stage is being aware of your options before narrowing down specifically to factors like flexibility that secure you convenience.For example,Are you only able to meet your adviser in late evenings or weekends?Then an independent is your best shot due to their flexibility.
Let us revisit the example I gave of a client in need of Direction regarding Retirement plans.In such a case,working with a tied financial adviser provides you with two advantages.First you get the advantage of quality advice based on research and experience and you also get informed of their products on offer,most of the times the advice would be free as long as long as you buy the product.
On the other hand,due to regulations,an independent financial advisor wouldn’t be able to offer you a product for purchase but a recommendation and their advice would come at a fee.Which one would you go for?Research opens you to such options.
#3 References based on knowledge,experience and customer satisfaction.
I always point out that when investing or seeking financial advice, the best advice is not any advice but informed advice.Now,informed advice depends on two things;Knowledge and experience.Two things that your financial advisor should have in abundance for you to get value for your money.There are many ways to go about establishing this.
In case of an independent financial advisor, a profile of some of the assignments they’ve been able to take should give you a glimpse of their level of experience.Their knowledge level can be established by certifications they hold.In addition,asking them questions to do with the investment/financial you need should help you know whether they are knowledgeable in their subject.Do they have any satisfied customers they’d be happy to refer you to? Always be on the look out for these factors or you might land in a con’s lap.
Take these steps and your leap into an investment journey guided by a financial advisor will be worthwhile.