Know your Financial Planner

Know your Financial Planner

05 Nov 2018

If you have a personal advisor then it is a must that you entrust your hard-earned money and life savings in the right hands and not trust anyone blindly. Once we have made a choice or taken a stand, we will encounter various pressures to behave consistently with that commitment. Those pressures may lead us to respond in ways that justify our earlier decisions.

Most financial planning clients are business owners or older folks who want to focus on retirement planning, or sudden wealth recipients (think of inheritance, lawsuit settlement, business sale, etc). Seek help from a Certified Financial Planner (CFP) or a Chartered Financial Analyst (CFA). You will always receive free advice from mutual fund distributors and private bank personnel- these people are always on the lookout to sell more products to earn higher commissions. Finalize a planner who takes a more holistic approach to your finances.

Good financial planners help you achieve your financial goals and will never tell you to believe in theories of unrealistic returns. Let us discuss how to identify good financial planners

1. Reputation - Getting a strong referral from a friend or family member can be the first step in finding the right financial advisor. Consider the background and reputation of the company the advisor works for. Are they local? Do they have a strong track record of success? Be wary of planners who seem to be too good to be true – they usually are.

2. Proactive approach - Good advisors keep the lines of communication open, updating you on current financial issues and opportunities. They help make complex financial concepts easy to understand. A financial advisor that withholds information or doesn't take the time to clearly explain his or her recommendations is not worth your time, effort or money for that matter.

3. Panic - Finding an advisor who is patient and doesn't panic is critical to success. You want a planner who is always evaluating what options are best for you but does not divert from a well-thought-out strategic plan. Avoid advisors who are constantly pumping the latest hot stock pick with a sense of urgency; they may not always be having your best interests at heart. There should be no sense of urgency when it comes to sound investing that eventually leads to long-term growth.

4. Confidence and trust -You need a financial advisor you can trust to have confidence in their recommendations. If you feel nervous, fearful or stressed out after discussions with your advisor, trust your instincts and end the relationship.

5. Experience - All legitimate financial advisors are expected to have significant experience in the financial services industry or have some sort of industry-recognized certifications. A few examples of highly regarded designations are those of Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA).

6. Holistic view - Sound financial advice is based on more than just your income level or the types of asset classes you invest in. A good financial advisor will take the time to learn about your full financial situation, investigating your banking, investment, insurance, and credit needs. Only by understanding your spending habits, debt obligations, life goals and more can a financial advisor begin to develop a meaningful and accurate strategy.

7. Support team - A good advisor should have access to a broad range of experts to meet your specific needs. A team approach will ensure that you secure the professional advice you require to meet any specialized investment, wealth management, insurance or debt management needs / objectives.

8. Clear strategy - Just as you wouldn't take a trip across the country without a map, you shouldn't try to steer your financial future without a clear direction. And if life circumstances change, as they often do, your advisor should take them under consideration and help you revise your financial plan periodically

9. They work with you - A good financial advisor will meet with you regularly throughout the year. And that level of attention should continue year after year. Too many times, people meet with an advisor, develop a plan, and then simply get statements in the mail.

10. Your interests first -Professional advisors tailor your plan to meet your specific goals. They don't force products on you simply to meet their targets or to get the biggest commissions. Check whether your advisor represents a wide range of products and service options or if they're restricted to only proprietary solutions their company sells.

In addition to this, a financial planner should always conduct periodic reviews to ascertain your progress and evaluate the performance of your investments. A planner will look holistically across all your investments – real estate, fixed deposits, loans, stocks, insurance, mutual funds, etc. and advice you the best solution or course of action.

A good planner will do the following -

1. Ask questions about your investments, tax situation, nominations, goals, income, expenses, wills and more.

2. Understand your current financial scenario and risk appetite by conducting a financial fitness check.

3. Guide you to achieve your goals by recommending how and where to invest money.

To conclude, make sure you understand your financial needs and consult only an expert for handling your hard earned money. As banks and financial institutions follow the term called KYC (which means to do a due diligence and know your customers properly), it is advisable for all investors like you to follow KFP i.e. Know your financial planner.

Founded in 2005 by new–age entrepreneur Abhishek Bansal, the Abans Group has evolved into a globally diversified conglomerate, providing expertise in Broking Services, Non-Banking Financial Dealings, Financial Services, Agri-Commodity Services, Warehousing, Realty & Infrastructure, Gold Dore Refinery & Manufacturing, Trading in Metal Products, Pharmaceuticals, Software Development & Wealth Management. The Group is a comprehensive financial and non-financial services and solutions provider, aiming to provide end-to-end solutions to its clients.