While I am flattered with the comments and encouraged by the criticism on this column from my readers, one common question seems to be nagging them: how do they find the right financial advisor? A financial advisor is not a ready off-theshelf product. Just as you would exercise due diligence in finding a life partner, I recommend that you make sure that your match with your advisor is made in heaven. Here is a quick checklist that may help.
TRUST & CONFIDENTIALITY
Call it by any other name, like ethics or integrity, if you please. You do not normally agree to get married the first time you meet, so why should a relationship with a financial advisor, which potentially could extend beyond your life too (for your family), be any different? Take time to meet in different environments (your home, your office, the advisor's office) and look for tell-tale signs such as an offer for a deal that's "too good to be true". (My experience tells me that it normally isn't true!) Find out if your advisor pays taxes honestly, for example: his personal behaviour will obviously spill over to his professional dealings.
COMPETENCE
Trust alone is not enough. Does your advisor have the knowledge to be able to offer you the right product, and more importantly, the right advice? What is his belief in continuing education, and upgrading his skills? Has he completed a professional, reputed course such as that of a Certified Financial Planner? The world is changing, and the financial world is doing so at breakneck speed. If your advisor is not keeping himself abreast with the latest, you are likely to be the loser.
SERVICE ORIENTATION
There must be a genuine desire in your advisor to serve you. For a start, ask your advisor for a service level agreement. Is there a bunch of standard services that he will provide? Are there items on the list which he will not provide and which are essential to you? Haven't you been able to easily make out which air hostess is doing her job and which one is thrilled to bits at being able to serve passengers in the flight? You need an advisor who's passionate about his work.
CLIENT PROFILE
Please spend time with the advisor understanding the type of clients he services. Your advisor could have expertise in dealing with young software professionals; if you are retired and less comfortable with dealing with emails as the primary source of communication, you may need to look elsewhere. If the advisor has a clear age or demographic concentration for his clients, he may be disinclined to meet the needs of a different profile of client.
STRONG REFERENCES
Many of my clients have asked me for references before they sign up, and I encourage that practice. I was, however, more than impressed recently with a prospect from the US who insisted on getting at least two references from the Bay area where he resided. He then proceeded to meet them personally. In his subsequent visit to India, he visited our office, and only then decided to sign up.
TRUST & CONFIDENTIALITY
Call it by any other name, like ethics or integrity, if you please. You do not normally agree to get married the first time you meet, so why should a relationship with a financial advisor, which potentially could extend beyond your life too (for your family), be any different? Take time to meet in different environments (your home, your office, the advisor's office) and look for tell-tale signs such as an offer for a deal that's "too good to be true". (My experience tells me that it normally isn't true!) Find out if your advisor pays taxes honestly, for example: his personal behaviour will obviously spill over to his professional dealings.
COMPETENCE
Trust alone is not enough. Does your advisor have the knowledge to be able to offer you the right product, and more importantly, the right advice? What is his belief in continuing education, and upgrading his skills? Has he completed a professional, reputed course such as that of a Certified Financial Planner? The world is changing, and the financial world is doing so at breakneck speed. If your advisor is not keeping himself abreast with the latest, you are likely to be the loser.
SERVICE ORIENTATION
There must be a genuine desire in your advisor to serve you. For a start, ask your advisor for a service level agreement. Is there a bunch of standard services that he will provide? Are there items on the list which he will not provide and which are essential to you? Haven't you been able to easily make out which air hostess is doing her job and which one is thrilled to bits at being able to serve passengers in the flight? You need an advisor who's passionate about his work.
CLIENT PROFILE
Please spend time with the advisor understanding the type of clients he services. Your advisor could have expertise in dealing with young software professionals; if you are retired and less comfortable with dealing with emails as the primary source of communication, you may need to look elsewhere. If the advisor has a clear age or demographic concentration for his clients, he may be disinclined to meet the needs of a different profile of client.
STRONG REFERENCES
Many of my clients have asked me for references before they sign up, and I encourage that practice. I was, however, more than impressed recently with a prospect from the US who insisted on getting at least two references from the Bay area where he resided. He then proceeded to meet them personally. In his subsequent visit to India, he visited our office, and only then decided to sign up.
I only wish that each of you take these pains before signing up your financial advisor. Keeping your eyes open before getting into a 'marriage' with your financial advisor will surely improve the chances of a long, financially healthy relationship.
