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Important Questions You Must Ask Your Financial Advisor

27 May 2015 No Comment

canstockphoto20274704A good financial advisor is worth their weight in gold, but choosing the right person for the job can be a rocky road. Not all financial advisors are good at their job and some are downright terrible. If you find the right person you could easily save a lot of money, but if you end up using an incompetent financial advisor it could cost you a fortune.

Do I Need a Financial Advisor?

Good question! Most people make an appointment with a financial advisor when they want help finding a mortgage or they need to start planning for their retirement. There are many different types of financial advisor, but the main ones offer specialist advice on mortgages, investments, pensions, and home finance products.

If you need help in any of these areas – and unless you are an expert, assistance is definitely recommended – a financial advisor is the person to turn to. So what are the key questions you should be asking at your first appointment?

How Much Do You Charge?

Financial advisors don’t offer their services for free, although the initial consultation might not cost you anything. Different firms have different fee structures, so before you hire a financial advisor to help you find a mortgage or plan for your retirement, find out exactly what the service will cost and whether they are working on commission. You may find this information on their website, but if the information is not there or you aren’t sure how the fee structure works, ask at the first consultation.

Many financial advisors work on commission. There is nothing wrong with this, but be aware that they are being paid to recommend certain products or service providers, so unless they are completely independent, you may be steered towards a product that isn’t quite right for you.

What is Your Investment Approach?

It is a good idea to think about what type of approach you take to finance and pick an advisor accordingly. For example, if you are looking to make some investments as part of your retirement planning and you want a good return fast, a high-risk investment strategy could be right for you. But if you are happy to adopt a more cautious approach, look for an advisor who is happy to err on the side of caution.

Are You Qualified?

Financial advisors, planners and consultants such as JSF Financial have to earn certain qualifications before they are licensed to practice. Financial planners Los Angeles must have a Certified Financial Planning (CFP) qualification in order to practice, which involves a comprehensive board exam. Other specialists will have slightly different qualifications. Always make sure that the financial consultant you use has the appropriate qualifications and certification. If you don’t, you may end up receiving poor advice from someone who isn’t qualified to give you advice.

The best way to find a really good financial advisor is to ask for recommendations from people you know and trust. If a close friend or family member received excellent advice from a financial advisor, they are likely to be a good choice as long as they offer the right service.

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