Important Things To Talk About When Choosing A Financial Adviser

by Pam on July 6, 2016

financial planning advisorCreating an investment portfolio is essential to ensure you and your family have financial security now and in the future, but trying to create that portfolio on your own can be overwhelming and confusing, especially if you are new to the world of investments. For this reason, many people choose to hire a financial adviser. Before hiring an adviser, be sure you are asking the right questions to ensure your financial peace of mind.

Decide What You Need From Your Adviser

No two financial planners are created alike. Some of them are more experienced in one area than another, so it is important to consider what you need before hiring someone. What are your financial goals? Do you want to consolidate and pay off debt, or would you like to learn how to invest in the stock market? If you want to focus on more than one area of investment planning, seek an adviser who has experience in several areas.

Verify Your Potential Adviser’s Credentials

When hiring a financial planner, don’t get too hung up on the acronym behind their name. There are at least eight different acronyms used by financial advisers in Canada, each having its own meaning. Instead, focus on the actual degree they received and whether they are in good standing with local governing authorities.

Check References and Reviews

Does the financial adviser you’re in talks with have online reviews you can look at? If so, read through them all to determine whether they are in good standing or not. You shouldn’t automatically discount a planner because he or she has one or two bad reviews, especially if the vast majority are positive, but if he or she has many bad reviews, it’s probably best to keep looking. Be sure to ask about any prominent people or business a potential adviser has worked with, and speak to those clients directly to ask for a reference if possible.

In addition to reviews and references, ask if he or she can provide sample financial plans. A good planner will provide such information to give you a good idea of how he or she works. Sample plans should be helpful and organized in a way that is easy for a non-expert to understand. Your adviser should be willing to answer questions about the sample plan if you have them.

Finally, weigh the information you receive against how long the planner has been in the business. Someone who has been in the industry for a long time isn’t necessarily better than someone who is just starting out. If a potential adviser has five years of experience and a 99 percent approval rating, he or she is probably a better fit than someone who has 30 years of experience, but only a mediocre approval rating.

Ask About Client-Adviser Interaction

You and your financial adviser must be on the same page when it comes to how often you meet. If you are very new to investing, you may want to meet in person a couple of times a month to discuss how things are going.

A planner who is too busy to do that may not be a good fit for you. On the other hand, if you are very busy, a planner who wants to meet in person on a regular basis may not work with your schedule. No matter how often you meet with your adviser, he or she should always be friendly, informative, and willing to answer any questions you have. Discussing your goals and assessing the risks are vital.

Flat Fees vs. Commission-Based Payment

How you will be paying for your financial adviser’s services is, of course, a vital part of the equation. A fee-based adviser will expect you to pay for his or her services regardless of the products you buy. However, some planners receive commission based on the products or services they sell for a third party. Ask your potential adviser how they earn their money. Regardless of the answer, you should never feel pressured to buy a product or service that doesn’t meet your needs. It is considered unethical.

Other Things to Consider

When you can, look for financial advisers who are a part of the 2016 FT300 Adviser List. Fisher Investments is one such example, although there are many others to consider. Always go with your gut feeling when choosing an adviser. If it seems too good to be true, it probably is.

With the right financial planner on your side, you will gain the knowledge you need to create and expand investments. The result is peace of mind in knowing that you and your family have a secure future down the line.


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