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  Parameters to choose your Financial Planner
  Types of Other Financial Advisors
  Questions to ask a Financial Planner before hiring him/her

Parameters to choose your Financial Planner


While you may choose to work with different advisors for different investment needs or work with a single trusted Financial Planner year after years, you will find the following parameters useful in deciding if the advisor you are choosing deserves your confidence and trust.

    Qualifications – Check what qualification he has in the field of personal finance. Professionals like Certified Financial Planners (CFP Certificants) go through elaborate education program & adhere to strict ethical guidelines.
    Experience – Choose an advisor who has prior experience counseling individuals on their financial needs.
    Association /Professional Membership – Find the credibility of the Financial Advisor’s employer or the professional organization he is associated with.
    Reference – Always ask for two references of his clients. Asking references keeps the advisor on toes and doesn’t let him take you for granted. Also be ready to give reference if you are satisfied with his services.

Types of Other Financial Advisors


Financial Advisors in the market can be broadly segregated as Institutional and Independent. Each one of them has their own strengths and weaknesses. Whichever category they fall into and by whatever name they may be called, most of them are driven by targets and commissions. Let us accept this fact and learn to choose a financial advisor and get the right advice for the financial products we are buying.

Institutional Financial Advisors: They are the one who are employed by Financial Products and Services Company. Most of them are MBAs or Graduates with AMFI and NCFM Certification. Their strength lies in the company name they are employed with. It gives a great level of comfort dealing with well-established company which is handling money of thousands of investors like you. The advisors undergo continuous training & have ready knowledge source for any kind of information you may ask them. But at the same time one should remember, your financial success at times depends on your financial advisor and not on the company he/she is associated with.

It may be noted that they may be driven by high sales target they get which makes them spare minimal time on after-sales service/advice. Second, they are young professionals switching jobs from one company to another in pursuit of higher packages. There is a degree of comfort level which is built, which is lost once your advisor switches and you may have to deal with a new advisor. It is always beneficial for both the advisor and the client to have long-term relationship.

Types of Institutional Financial Advisors

Employed by Products for sales and advice
Insurance Companies Insurance Policies
Mutual Fund Companies MFs, PMS Services
Equity Broking Firms Share trading, IPOs & PMS Services
Private & Foreign Banks MFs, Insurance Policies, Bonds, Deposits
Distribution Houses MFs, Insurnace, Bonds, Fixed Deposits, Govt. Schemes & IPOs

Independent Financial Advisors: The Independent Financial Advisors are self-employed who run their business from a small office with some support staff. Most of them are your friendly neighborhood LIC agents and share sub-brokers. They are friendly, flexible & spend time to understand your needs & make you understand the products which will fulfill them. There only marketing tool is a word of mouth and reference, so they try their best keep you happy. But the disadvantage is they may lack training support & professionalism in their service. You may also find it uncomfortable to deal with them unless you have received very good reference about them.

Types of Independent Financial Advisors

Category Products for sales and advice
Insurance agent Insurance Policies
Mutual Fund distributor Mutual Funds
Equity share broker/sub-broker Share trading, IPOs
Income tax consultant Tax Planning, Employee Benefits
Distributor/Advisor of multiple financial products & services MFs, Insurance, Post Office schemes, share trading, tax etc

Questions to ask a Financial Planner before hiring him/her


While looking out for a competent Financial Planner/ Wealth Manager, Financial Consumers below are the questions listed to ask a Financial Planner before hiring him/her.


1. What experience do you have?

Choose a personal Financial Planner who has sufficient experience counseling individuals on their financial needs.


2. What are your qualifications?

Look for a personal Financial Planner who has proven experience in topics such as insurance, tax planning, investments, estate planning or retirement planning.


3. What services do you offer?

The services a personal Financial Planner offers depend on a number of factors including credentials, licenses and areas of expertise.


4. What is your approach to personal Financial Planning?

Ask the personal Financial Planner about the type of clients and financial situations he or she typically likes to work with. Make sure the personal Financial Planner’s viewpoint on investing is not too cautious or overly aggressive for you.


5. Will you be the only person working with me?

The personal Financial Planner may work with you himself or herself or have others in the office assist in the process. You may want to meet everyone who will be working with you.


6. How will I pay for your services?

As part of your Financial Planning engagement, the personal Financial Planner should clearly tell you in writing how he or she will be paid for the services to be provided.


7. How much do you typically charge?

While the amount you pay the personal Financial Planner will depend on your particular needs, the planner’s level of experience and your geographic location, the personal Financial Planner should be able to provide you with an estimate of possible costs based on the work to be performed.


8. Could anyone besides me benefit from your recommendation?

The planner may also have relationships or partnerships that should be disclosed to you, such as business he or she receives for referring you to an insurance agent, accountant or attorney for implementation of the Financial Planning recommendations.


9. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?

Ask what organizations the planner is regulated by and contact these groups to conduct a background check.


10. Can I have it in writing?

Ask the personal Financial Planner to provide you with a written letter of engagement that details the services that he or she will provide. Keep this document in your files for future reference.

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