Hiring a Financial Advisor – A Necessity

A smartperson is capable of managing his funds very well. However, I still stronglyadvocate the necessity of hiring afinancial advisor if, you’re planning to make investments. It isn’t a sinto ask for help nor is it a crime. Getting some professional advice is a must inthe present situation,
where there is very much uncertainty prevailing in themarket. By hiring a financial advisor,your finances could be handled in a better way and you could have someone toentrust your financial safety as well.

Once madeup your mind and now if you are considering hiring a financial advisor you have to keep certain basic things inmind. If you follow the below given basics and really apply them, then for sureyou’re going to end up in finding the best professional possible and thusgetting your finances in safe hands.

1.    Ask for the reference from a rich person – People who are richusually do not manage their money. You can take an advantage of this criterionand take a reference from any such person. A real shot isn’t it? For sure, youare going to land up in a top professional’s office.

2.    Get well prepared for your meeting – When you land upinto a high-class advisor’s office, he will ask for your financial details. Sodon’t forget to get along, the copies of your investment statements, expensebreakdowns, most current tax returns and your net worth. Expect this sort ofprofessionalism from a real advisor, otherwise you should probably be findingsomeone else.

3.    Show-up during your first visit – During your firstmeeting the financial advisor actually does your complete financial checkup.The motto is to discover your current financial health and your futurefinancial objectives. A professional advisor shall engage you in such a waythat you end up revealing all the necessary facts. On the contrary if, theadvisor exclaims himself and exaggerates the talk based on his firm then he isactually not the type of financial advisor you are looking for.

4.    The Financial advisor should make his Investmentphilosophy clear – Whenasked about the financial policy, a true financial advisor should be able tointerpret the same briefly and in simple terminology. Here, your job is toassess if his philosophy coincides with yours.

5.    Check out the financial advisor’s fee – Financial advisorsdo charge in many different manners. Some do take commissions (an agreedpercentage on every transaction made on your behalf) while some do acceptannual fee on the assets managed. Some others prefer to be paid hourly and somelike to take both fees and commissions. Do freely question the financialadvisor to mention their way of charging for the services provided includingany hidden fees in particular.

6.    Select the mode of payment – The best option tochoose would be a fee-based arrangement. In this arrangement, you are in abetter position of cancelling the services of an advisor, if he not takingenough care of your funds. Under this arrangement, usually you have to pay anannual fee of 1 – 2.5% of the value of the assets he is managing.

7.    Make the financial feel your presence - To make thefinancial advisor feel your presence, just providing him a handsome amountdoesn’t suffice. You have to prove it from your courteous nature, may be byjust a simple gesture of saying ‘thank-you’ he really does some earnings foryou. After all, saying two simple words ‘thank you’ goes a long way.

8.    Just don’t look at the financial advisor alone – The fact that thefinancial advisor you have chosen has a good support team makes a lot ofdifference. It provides an assurance that you always receive the kind ofattention and services you deserve. Also this decides whether your funds are inthe right hands or not.

9.    Make background checks – Do check thefinancial advisor’s background present on the U4 with the National Associationof Securities Department (NASD) or visit their official website www.nasdr.com and enquire aboutthe advisor.

10.  Check out for those advisors who boast – To have a look atthe portfolio of a financial firm, the farther back you go the saferprojections you are bound to get. For solid financial forecasts, a goodfinancial advisor should provide you details of historical returns going backat least 20-30 years. Ask for the breakdown in the proposal between stocks,bonds, and cash when the advisor presents you with the investment proposal.

11.  Investment risks need to be explained – A potentialfinancial advisor always explains in detail the risks embraced with theinvestment. He is expected to enlighten you of the facts and figures related tothe market and its trends based on the last 30-45 years.

12.  Has a list of satisfied clients - Prefer the financialadvisor who has an on-going list of satisfied clients. After all, all thatmatters is money, right?

13.  Here comes your sixth sense – Feel comfortablewith the person, whom you want to hire as your financial advisor. Do you feeldeep inside that he is the right person to trust? Your sixth sense, for surewill guide you. Just follow your gut feeling.

14.  Always keep in touch – Keep in regularcontact with your financial advisor, it does matter. You should be contacted byyour financial advisor at least twice a year and you should together previewyour financial condition at least once a year. If, not you are into a greattrouble.

The abovementioned rules shall sure-shot help in finding a life-long financialassociate. It’s high time now to move on with your decision of hiring a professional financial advisor. Thelast piece of advice I can give you is to take some time out, interview someprofessional advisors (keeping in mind the above basics), and choose the bestsuited for your needs rather your funds!