While some financial decisions are not to difficult to make with the use of various tools and resources online, when it comes to deciding on more complex issues, such as investments or pensions, the value of expert advice is indispensable.
Financial advisors can give your support in setting and achieving your financial goals in a way that suits your needs and your budget. In order to choose the one who is the right fit for you, you should pay attention to some of the following factors.
Decide What You Need
Your starting point when choosing a financial advisor will be the type of advice you need. Generally, financial advisors can help you when dealing with complex financial issues, and in the situations in which it’s crucial not to end up with an unsuitable and unfavourable solution.
Financial advisors will scan the market and find products or investments which are tailored both to your circumstances and your goals, and help you incorporate them into your personal financial plans. The issues they can be of assistance are:
- Pensions and pension transfers,
- Protection Insurance,
- Long-term care planning,
- Mortgages and equity,
- Taxes and inheritances.
These experts, like Opes Fidelio, need a license in order to provide their financial services and all have standards that they must follow and comply with, which means that they are professional and acting in the best interests of their clients. Independent financial advisors, which are not affiliated with any particular products or services, can offer you unbiased advice based on the analysis of the entire market.
On the other hand, restricted advisors either focus on a single subject area, such as life and health insurance, or they can offer you advice on more areas but with access to a limited number of providers. If you opt for a restricted advisor, make sure you ask them about their limitations.
If your primary concern is investments or you need some support in planning your finances but the situation is not too complex, you can consider opting for a robo-advisor or online financial planning services, to help you decide. But when your circumstances are complex, and you need a highly-personalized service, traditional financial advisors are still the best option.
Look for Referrals
Holding a certificate doesn’t make every accountant skilled or credible enough to help you, so you need to make sure you’ve separated the wheat from the chaff.
Start by asking your friends and colleagues for a recommendation, as you are looking for an advisor who is well-versed in handling the issues specific to your stage of life. Reading reviews on their websites or other specialized webpages is a good way to start checking the recommendations, but don’t stop there.
Financial advisors are often named by their specialization, such as a financial planner, a pension advisor, an investment or mortgage advisor.
This specialization may show you the area of their expertise, but before putting anything in writing, you should try to find out more about their previous professional experience. It would be best to ask if it’s possible to have a conversation with at least two of their current clients with similar issues so that you can get a clear idea about their satisfaction with the service provided.
If an advisor doesn’t want to provide such references, beware, as they should be willing and happy to do that.
Also, make sure to run a background check of the advisor and make sure that their credentials are valid by getting in touch with a designated administrator. Ask them whether they have been convicted of a crime, or been under an investigation by any regulatory body.
How Do They Charge?
There are several ways financial advisors charge for their services, and sometimes, the way they are paid can influence the advice they give to their clients.
Some advisors opt for a commission-based model, meaning that they’re compensated by commissions on products they sell, so they might be biased towards pushing certain offers. On the other hand, those who charge a fee might be biased too. If they earn 1% of your annual assets, they might not be motivated to encourage you to liquidate some of your investments or purchase a house, for example, as their fee will decrease.
There are not many advisors who charge by the hour, and those who do are usually just starting with their business. They can still be a great fit if your issues are not too complex to handle.
Weigh Your Options Wisely
Apart from their expertise, you should determine whether your potential financial advisor is a fiduciary, meaning they’re pledged to act in their client’s best interest all the time. If not, they may adhere to what is known as a sustainability standard, which means that what they need to give you a suitable, but not necessarily the best or ideal offer.
When choosing a financial advisor, make sure you’ve checked out at least several options. Don’t decide based on their price and your budget alone, and choose the most expensive or the cheapest offer you can find. You need to look further than certificates and recommendations and try to choose an advisor with whom you can be open and sincere and forge a trustworthy relationship.