Picking the right Investment Advisor is never an easy decision. Here are a few important points to that might help you before selecting one:
The Services Offered
Different entities sell different products and services i.e. Stocks, Mutual Funds, Fixed Income, Insurance, Fixed Deposits, Bonds, Government schemes etc., It would be wise to check if the Financial Consultant has the competence to advise on all products or just a select few.
Competency & Certifications
The most important aspect in choosing an Investment Advisor would be to understand their area of expertise, core competency, and capabilities. Another aspect would be understanding their approach, outlook, decision making strategies, and track record. Along with the above, if there are any added certifications completed or licenses acquired by them.
Relationship & Communication
The Financial Advisor should be someone who is approachable. Your advisor should be fluid in their communication, address your queries, keep you well informed, and share a warm relationship with you.
Trust & Transparency
Another important quality is the amount of trust. While trust can only be built over time, it can still be gauged by doing background checks. A financial consultant may also display goodwill prior to establishing the relationship. Additionally, an advisor having a transparent model and who acts in a fiduciary capacity will gain confidence.
Confidentiality & Compliance
Given that money is a sensitive subject, it is vital that all information disclosed to the financial advisor is maintained with utmost confidentiality and care. This is particularly important when the advisor handles multiple clients from similar social and professional circles. Additionally, it is crucial that the advisor adheres to all applicable regulations.
Expenses & Charges
There’s no free lunch, so it’s important to understand the costs associated with the services you avail. The fee may be directly or indirectly charged to you. Most entities have different revenue models such as a fixed/ flat fee, a variable component (hurdle rates, profit sharing, etc.), commissions, etc. Reviewing the charges could help you decide what works best for your budget.