Making the decision to hire a financial adviser is quite the job in its own right, but is then proceeded by what can prove to be an even bigger headache – choosing wisely and correctly.
It’s not like there’s a shortage of options out there, but this veritable sea of advisers all competing for your business at the same time can actually be more of a blessing than a curse. After all, they can’t possibly all be of the same calibre, so how can you know which to side with and which to avoid at all costs?
The answer can be found in a relatively simple vetting process.
This involves taking into account a few considerations before going ahead and signing on the dotted line. Exactly what kinds of questions you’ll need to ask will vary in accordance with your own unique circumstances, but in any and all instances it’s important to factor in the following in order to make a savvy decision:
Independence or Otherwise.
First of all, it’s crucial to understand that there are two distinct types of financial advisers out there – those that are independent and those that are not. What makes the difference here is the way in which independent advisers are able to offer advice free from any kind of partner-provider bias, can recommend products from the market as a whole and aren’t tied down by any specific bonds to other brands or services. By contrast, a restricted financial adviser may have certain brand ties or limitations, but may also have access to better deals from these specific brands than an independent adviser.
Experience and Qualifications.
In this department, the key thing to remember is that one without the other is really no good to you. A financial expert may be qualified up to the eyeballs, but without any real world experience you could be looking at a risk. And the same applies in reverse, as plenty of experience doesn’t count for much if they don’t have any appropriate training and education. It’s also worth bringing into the equation the nature of their experience – does it fall within the same business area as yours, or lie elsewhere?
Costs and Contracts.
It’s never a good sign for a financial adviser who insists that you immediately enter into a long-term contract right from the get-go, or that large sums of cash be handed over in the early days. Contracts should be rolling and fees paid on an on-going basis, in order to establish a sense of trust between both parties. In addition, any costs that seem excessively high or excessively low are to be avoided – there are market averages in place for a good reason.
Last but not least, it’s a good idea to look into the advisor’s reputation by tapping into the feedback that should be available either via their own web portal or across the web in general. In the case of an important contract, it’s worth going as far as asking the advisor to put you in touch with a current or former client who may be able to answer your questions about them.