Some inexperienced people may end up with inappropriate financial advisers because they aren't aware of the qualities that they should look for when identifying the best advisers. This article discusses some of the key attributes that you should look for when selecting a financial adviser.
Depends on Fees Alone
You should pay attention to how the financial advisers you are considering get paid. Some financial advisers earn commissions for recommending specific products, such as hedge funds. Others depend on the fees paid by their clients. Some earn both fees and commissions. Select a financial adviser who depends on client fees alone. Such an adviser is more likely to give you unbiased advice, since they don't expect to earn from asking you to take certain decisions or actions.
Provides Comprehensive Advice
The best financial advisers take a holistic approach when dealing with their clients. For instance, they will give you advice on setting financial goals as well as how you can design/manage your budget. Avoid financial advisers who only focus on one aspect of your financial life, such as estate planning, since you will lack professional help in the other important areas of your financial life. Only consult those specialists when specific advice is needed in that area.
Signs Fiduciary Oath
Ask the financial planner that you want to hire whether he or she is willing to sign a fiduciary oath. A fiduciary oath will compel the adviser to act in your best interest at all times when dispensing advice. The professional will also declare any conflicts of interest that may arise during your working relationship. In this way, you will be sure that any advice you receive will be geared at helping you instead of benefiting the adviser.
No Disciplinary Action Against Them
It is also helpful for you to find out whether the financial adviser that you wish to hire has ever had any disciplinary action taken against them by the authorities. Such action can be an indicator that the financial adviser was found guilty of acting in a way that compromised the interests of his or her clients. Information on such action can be found on the websites of the relevant regulatory authorities in your area.
The best way to select the most appropriate financial adviser is by designing a detailed checklist like this one. Use the results of that checklist to identify the professional who is best suited for your needs.