How do you choose the right professional for you?
This is a very common question, and for good reason. More pertinently, how do you choose the right financial advisor? Many clients remark that they have been disappointed many times in their financial advice journey and reach a point of not knowing what to do. Some even adopt the DIY method, putting together their own financial plan and then executing it.
Here is a list of key points to consider when choosing a financial advisor and perhaps to keep top of mind when appointing most professionals:
Are they qualified?
- Do they have the recognised academic qualification? This would usually be a finance-related degree and/or a professional body qualification, such as a Certified Financial Planner or Chartered Accountant.
- Are they experienced? The length of time of working in a particular field is only a small contributor. More important is what the advisor has actually done and how successful they have been? This can be difficult to establish but is important to understand.
Are they independent?
This is crucial in providing “best advice”. Many advisors are tied into an investment company, which results in them steering clients to their own products at the expense of giving the client the best, independent investment options.
Are they trustworthy?
This is difficult to judge, but key measurements are reputation, longevity and consistency of service.
Is there a proven, good track-record?
This is often in the form of past investment performance and client service. Ultimately, one’s risk profile needs to be correctly assessed and matched with the appropriate investment strategy that will provide the desired returns. Portfolios that are: aggressive +10 years, moderate +5 years and conservative +3 years investment horizons, should provide inflation plus 6%, 4% and 2% annual returns respectively.
Is there support?
To ensure continuity and consistency of service, it’s imperative that the advisor has a competent and professional support team that can comprehensively address any issues when the advisor is not available.
Is my advisor consistent?
Good advisors will be consistent in their approach, which mostly results from a successful process. This will be underpinned by thorough information gathering and research placed into models to achieve accurate results. A rigorous process will prevent an advisor making rash decisions that would generally hinder good performance.
Is my advisor proactive?
Being proactive as opposed to reactive is critical. In order to have the appropriate financial plan and obtain the best investment returns, one needs to be forward thinking, implementing investment strategies that will benefit clients’ existing and future needs. Being proactive is not easy and requires the right skill set but is enormously important in achieving the best long-term goals.
Is my advisor passionate?
Passion is something one cannot learn. Yet it remains an important component to providing a superior service. Demonstrating one’s passion is illustrated through communication, with the best evidence coming from regular contact, by telephone, emails, meetings and newsletters.
Is my advisor a member of a Professional Institution?
This would be such as a Certified Financial Planner or Chartered Accountant.
Are there references?
Having all these credentials verified can be reassuring, which is often best done by obtaining third party references from other clients. They will mostly let you know if they are happy or unhappy and what the advisors’ strengths and weaknesses are.