It is difficult to choose a financial advisor who can guide you for making right investment in right place. Before going to select your financial advisor, first you have to make it sure that how the advisor will get remuneration for the rendered services. This financial advisor can be sales agent, insurance sales person or a broker. You need to know how to make contract of payment for getting services. In the following way, an advisor levy charges.
a) A percent on account value
b) Commission based
c) Combined way (fees + commission)
d) Hourly wages
e) Quarterly & annually fees
Investors are more interested in the selection of loyal advisor. Many investors change the financial consultancy due to the lack in experience of existing advisors, so selection of good advisor is not simple one, rather you have to ask different questions and follow the many guidelines in order to have good advisor, as your wrong selection can lead you towards loss in business and your investment can be classified by your wrong decision. So, financial advisor plays an important role for boosting or demolishing of your business. Following are the different and unique question which should be asked before choosing a reliable financial advisor:
1: Is Financial Advisor Is Fully Experienced?
A financial advisor must be educated in business and knows all the tricky ways that use in business regulations. He or she should have experience in this professional field. It does not mean that financial advisor should have the degree of MBA, CA or ACCA rather he or she should have the education up to the level of advisory. Any advisor, who does not have experienced in this field, cannot fulfill the desired need.
2: Are Your Self-Satisfied With Advisor?
You should be self-satisfied with financial advisor. If advisor is insisting you to make investment in a particular project, for which you do not have any knowledge, be aware from such advisor, as he or she can cheat you.
3: Is Your Agreement In Written Form?
If a financial advisor is giving to something, make it sure that it should be in written form. Any investment about which financial advisor suggest you, should be in writing, as you have to decide which is the best opportunity and which one is not.
4: Do You Know About Mode Of Payment?
You must have the knowledge about how to compensate financial advisor. Firstly, you should determine the type of services which you are going to hire, and then you will have to know how much fee is required for this particular transaction.
5: Has Financial Advisor Good Piece Of Advices?
It is important to know whether a financial advisor has good advices or worst. A financial advisor may be form large organization or small. If an advisor comes from small organization, he or she must have Omission and Error insurance. So before dealing with him or her, you should ask about the insurance. If advisor seems to be a culprit or replied in ‘No’, that advisor is not trusted one.
6: Do You Have Past History of Financial Advisor?
You must be aware about the character or past history of financial advisor. You have to conduct CDD (Customer Due Diligence) or KYC (Know Your Customer). For this purpose you should browse any financial website and should check the status of advisor’s past history. You have to make it sure how the financial advisor has been working in the past and what his or her market worth is.
7: Are You Vigilant To Review Account Statement?
If you do not have the ability to check out the statement of account on periodic basis, then you must have to hire a special professional who can keep close eye on the advisor and should be vigilant.
8: Do You Have Track Record Of Past Performance?
You must have clear thought of mind that past performance cannot indicate the profit of future as it shows the element of risk. Always avoid such financial advisors who do not make comparison analysis, which means that they are indulging in risk.
9: Do You Know About Risk & Reward?
Always keep in mind about those financial advisors who say that they can enhance return on investment without ascending the risk on investment. Your investment must be secure in regard of principal as the number of investors need more return on investment. An investor should not have blind trust on financial advisor rather investor should conduct scrutiny for the selection of advisor. Investor must have the ability to ask different question about which financial advisor can be warned on his or her misconduct.
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