Choosing a financial adviser or planner to manage finances and investments is an important decision. Follow these five tips to select a professional that suits your financial goals.
1. Know what you want
Do you want a financial planner or an investment manager? Financial planners help you craft a vision of your financial future, advising on cars, mortgages and retirement. Investment managers focus on building and maintaining your investment portfolio. Different advisers specialize in different areas and services, such as impact investing and other types. Do some research to locate an expert if you require a particular service. If you want to keep all your financial management under one adviser, a generalist is best, but for individual services, a specialist is likely to have a deeper knowledge.
2. Focus on qualifications
Once you have done your research and made a shortlist of financial advisers, how can you weigh them up against each other? It can be tempting to pick someone based on likeability and sales patter, but a good salesperson doesn’t always make a good adviser.
A wise place to start is qualifications. Though certification is not the be all and end all, it can give a good indication of the adviser’s industry knowledge and dedication to the field. Also find out if they are members of any associations, as membership often requires continuing professional development, a key indicator that they are up to speed in this rapidly changing industry.
3. Find the dream team
Make sure your financial adviser has a network of professionals to rely on. From someone to take their phone calls and send out bills, to their legal and compliance advisers, a strong team means that your financial adviser will spend less time having to deal with distracting logistics. This frees them up to focus on what is really important: your financial well-being.
4. Follow up on references
References should be a key part in your selection process. All the references that your potential advisers provide will be glowing, of course, but dig a little deeper to find out the truth. Contact the referees to ask questions. How long was the relationship? How large were the investments or portfolios? What was the best advice the adviser gave? Why did the relationship come to an end? Try to get exact answers to build a greater understanding. It may feel intrusive to ask so many questions, but this is one of the most important financial decisions you will ever make, so it is important to gather as much information as you can.
5. Set out your expectations
Make sure potential advisers understand your expectations. How often do you want to see your adviser? How much detail do you want about how they manage your money? Some clients want to talk to their adviser regularly and have all their investments fully explained to them. Others prefer to delegate and want fairly little contact. How much involvement do you want? Each adviser will tend to do things differently, so explaining upfront how you expect things to pan out will prevent misunderstandings later.