Financial advisors are a dime a dozen. It’s amazing to see how intelligent and successful people can somehow engage their brains in neutral and part with their money on a whim. They can think about the decision to buy a new fridge for about a week, but they spend little time on life-altering decisions like retirement annuities.
So how do you find a good financial advisor?
An easy way is to do what you normally do; ask a friend. You might have asked your friend if he knew a good dentist, or a good doctor. Do the same. Ask your friends or colleagues who also have interests in sound investment advice. They might have come across a broker that has been helping them for years, right under your nose. Sure, you could teach yourself. It will take a lot longer than just phoning a friend about a broker and you will probably become terribly frustrated sifting through your finances yourself. So save time and make the call.
Interview your winning man
The introduction of the Financial Advisory Intermediate Act (FAIS) ceased anybody from calling themselves financial advisors or investment brokers. This is good news because the Act also states that their license must be visible to prospective clients in their office. Be on the lookout for an international license [Certified Financial Planner License (CFP)] which is recognized in 18 countries around the world.
Discuss money matters
By this we don’t mean your goals. Talk about what charges your new broker will levy for what services. This is sometimes a grey matter. Never sign blank forms. Ask your investment broker if he will charge a fee for advice, or just his services. There’s nothing wrong about brokers earning commissions, but make sure their advice isn’t tainted by a possible commission.
Financial advisor/investment broker checklist
- Time and dates: Your financial planner should tell you his and your responsibilities, and when you will see each other. Normally you should visit your financial planner annually, but certain events in your life like marriage, divorce, births and deaths may cause more visits.
- The facts: You should tell your advisor about your assets, liabilities, cash flow, insurance, investment and tax strategies in order for him to better plan your investments around your goals.
- Review: Ask about how often you will receive reports about how your investments are doing.