How Do I Choose My Financial Advisor – 6 Important Questions And Considerations

With so many choices out there, it can be hard to decide who to choose as an advisor, especially taking into account all of the factors involved. Countless times I’ve been told by clients that they've struggled to reach their previous advisor and are unsure how funds are performing; which unacceptable considering that it’s your hard-earned wealth and future in question. No matter how big or small you consider your portfolio to be, there should always be a consistently high level of communication and service delivered. Here’s some key points to consider and questions you should ask:

 1.   How will our journey together work?

You’ll need to understand what you can expect from your journey start to finish and how that continues after the implementation phase. Does the advisor have an assistant, they will be key in assuring that your service is first rate. Check out their assistants’ online recommendations and activities, see that they have a good reputation for that. So many clients have spoken about completely dropping off their advisor's radar after the portfolio is in place, which is unacceptable.

Every client is different in terms of what they need, but your advisor should offer to meet with you on at least a quarterly basis, performing a full review of your portfolio at least once a year or as and when your circumstances change.

A point also to consider is how accessible is your advisor for ad-hoc advice and will they charge a fee for this?

 2.   Are you independent?

This is a key point that a lot of individuals fail to consider. As an independent advisor they will be able to show that they work within your best interest, as advice is not driven by restrictions and incentives to recommend a particular product. Having a broad range of products, investments and funds to offer will give you a solution that best suits your needs.

3.   What is your experience and specialty?

Specialty areas can be nice, if you’re only looking for one particular service, for instance retirement planning. For a well-rounded service through your complete financial journey, if the advisor hasn't offered the information already, you’ll want to ask questions about their background and track record. Check how far their client base spends and the business' assets under management. Also check the size of their client base. It’s great to have a lot of clients, but you’ll also want to know how they manage this and ensure that this doesn’t affect your own service that you will receive. Having a boutique style service shows that you’re always going to get the best possible experience with scope for your advisor to go the extra mile.

 4.   How are you paid?

Transparency is key here, how is the advisor remunerated for their services. You’ll want to gauge whether the professional fee is worthwhile and competitively positioned. If you manage to get yourself an initial free consultation and preparation of your own financial plan, due to additional scope in the advisor's schedule, take advantage! Normally, there is a fee applied for all financial services from an expert. Check how commissions are paid too, does it come from the provider, or out of your pocket? You want to see that your advisor clearly shows the breakdown when your plan is drawn up.

 5.   What are your qualifications and affiliations with professional bodies?

Experience is great, but you also want to ensure that your advisor has relevant qualifications that demonstrate their ability to give solid advice. They can talk the talk, but can the walk the walk for your full financial journey? Are they able to provide intelligent research and evidence to validate their recommendations? It’s also worth while checking their assistants’ qualifications, are they invested in the business and clients? After all, they will also be a big part of your service, so you want to know that you’re in good hands. It goes without saying that you should use a regulated company too; you have to know that all rules are enforced and monitored.

6.   What is your investment philosophy?

Asking your advisor about his and his company’s investment philosophy is one of the most important things you can do. As a future client, it is imperative that you understand your advisor's views on investment markets, risk, multi-managers and discretionary fund managers, active- versus passive investing, changing investment strategies, timing markets, tax efficiency and growth. Most importantly, your advisor should give you comfort that his/her investment philosophy is aligned with your objectives, and that he/she is able to provide client-driven advice that is in your best interest.

Many individuals leave getting the right financial advice far too late; making timescales to achieve goals less comfortable than it needs to be. If you've been burnt by a bad experience before, make sure you bounce back. The right advice is out there, you just need to ask the right questions. Having an advisory firm in a strong market position and a client centric approach will see you back on track!

You may not have experienced what real good advice looks like - my advice - get yourself a financial health check! It's like going to the doctors, sometimes it's just good to know that everything is tip top...you might even walk away with a tip that improves your current health. If you get one piece of financial advice that improves what you're doing already, it's well worth the time to invest!

Angela McGreal

T | +44.2031399013

M |+230.57086692

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www.carrickis.com

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