Simply put, a good financial planner will help you manage and grow your money whether through investments, tax planning, retirement or estate planning. Since it is hard-earned money we are talking about, it makes perfect sense not to trust just anybody claiming to be an expert. When selecting an adviser, the first thing to look for is the adviser’s qualifications. Is he or she licensed and were there complaints regarding performance and attitude?
In a country like Australia, financial services providers are required to have an Australian Financial Services (AFS) license. It’s a good starting point when trying to shortlist candidates but still, a license does not guarantee quality performance. Therefore, also check the candidate’s experience, particularly in handling the service or services you need and the type of situation you are in. Make sure you do not simply ask them about it; verify their claims.
Next, ask how the financial planner will take on the job. Some are overly cautious while others are too aggressive in terms of investing. Find out what their approach is and see if it’s wonderfully aligned to yours or too strong or weak for your financial goals. Also, determine if the planner is the only one you need to communicate with or if there are other people on the team. If there are, meet with them, too, and don’t forget a little background check.
Another important consideration when searching for a financial planner is the fees. Ask how much they charge and if they charge by the hour, per service rendered or through commissions. While it may be difficult to come up with an exact amount, the planner should be able to provide a good estimate and be able to explain clearly how they came up with such amount. Lastly, know when these fees should be paid.
There is the issue of conflict of interest, too, as planners may also get commissions from selling mutual funds and insurance policies. Talk to your planner about this to know how he or she deals with this. Put everything in writing to guarantee that your needs will be prioritized over the planner’s commissions from these companies. Keep in mind that aside from qualifications, competence and experience, a planner must also demonstrate diligence and integrity.