It’s not that you don’t think having a financial advisor (FC) is important – the critical role of good guidance has been instilled in you by your savvy friends ever since you started earning money. ‘silver. But maybe you’ve put off finding someone to manage your portfolio because you’re not quite sure what to look for. Or maybe you even have someone in mind, but you’re not sure if they’re the right person for you.
When looking for a financial adviser, you should always start with the basic requirements – or what I call the ‘non-negotiable” – and it depends on their qualifications and experience.
And while it probably won’t surprise you, how do you know what qualifications you should be looking for or what experience is enough?
First determine if the financial advisor‘s qualifications are relevant to their job. For example, they may have a bachelor’s degree in commerce, a degree in financial planning, or a chartered accountant (CA) designation. Also find out if they hold the Certified Financial Planner (CFP) designation, which is one of the most prestigious financial certificates. CFP is the confirmation of an individual’s understanding and competence in financial planning.
Second, look for someone with the appropriate regulatory license.
In terms of experience, you should keep in mind that the number of years spent in the industry is not the only criteria used to measure experience. However, they should have a good track record. Get a personal recommendation from someone you trust, or ask your potential FA for some client references you can contact.
Look for someone who understands the financial needs and priorities of an individual’s full life cycle – from entering the workplace; start a family and buy a house; until retirement.
Once you’re convinced that your potential FA ticks the non-negotiable boxes of being both qualified and experienced, you can start to dig a little deeper to find out if they’re right for you.
To understand where they make money
You need to know if your advisor earns revenue with a financial services provider in addition to their standard advisory fees. These may be specific incentives or commissions they might receive for selling you a certain product or policy that could influence the impartiality of the advice they give you.
If they receive an inducement, it does not necessarily mean that they will behave unethically. However, it is important to be aware of possible conflicts that could influence the objectivity of the adviser and the quality of his advice.
How do you know if there is a compensation or reward attached to their recommendation of a product? Just ask them. They are legally bound to tell you. You can then make an informed decision with all the facts at your fingertips.
Determine their succession plan
Life is never guaranteed, and “uncertain” is perhaps the most frequently used word to describe the past few years.
Certain events could prevent your advisor from rendering services to you. These include voluntary events that could be planned, such as retirement or the sale of their practice, or involuntary events that occur unexpectedly, such as death and temporary or permanent events. disability.
It is important that your appointed advisor has a solid succession plan. This ensures that your needs and your wallet will be taken care of should anything happen to them and that you will continue to receive sound, quality advice. A good advisor will also ensure that the successorthe skills, personality and approach of are suited to their customer base.
Ask your advisor if they have a succession plan and what that plan is.
Know who they are affiliated with
This is important, as advisers employed by a specific financial services provider are often mandated to sell only that provider’s products, or will naturally favor their employer’s products in their recommendations. The potential downside is that you, as a customer, won’t have access to a wider range of products, which might better suit your needs.
It is equally important to know who is responsible for the advice and services provided by your financial advisor. Are they part of a trusted and reputable company with a strong heritage and balance sheet? Are you comfortable with the company behind the products in your portfolio?
Although Consult is affiliated with Momentum – a credible and trusted financial services provider – its advisors still have full product autonomy, which means they are guided by their clients’ needs in selecting relevant solutions and are not limited to certain products.
We have to be realistic about advice. Look for someone who has your best interests at heart; who understands your unique needs and has the know-how to guide you on your path to success.
Ryno de Kock, Head of Financial Planning and Advice at Consult by Momentum.