Learning how to manage your personal finances is a great idea. However, sometimes you need professional help to make the right decisions. If you are busy trying to make more money, you do not have enough time to follow your investments. After long working hours week after week, you do not have enough time to analyze markets and manage your portfolio. Professional help is particularly important to individuals without a financial management background. Hiring a financial advisor may be the best decision you will ever make for your financial freedom and security. However, you need to vet the financial services in the market before hiring an advisor. Here are the top questions you should ask a potential adviser before signing the dotted line.
1. What Qualifications and Credentials do You Have?
You have worked hard for years to earn your money. You want to entrust it to a qualified advisor. The question of credentials and qualifications should come top on your list. Ask about the advisor’s certifications as well. A verbal response is not enough. You need proof that the advisor is qualified to handle your finances.
2. Do You Have Any Experience?
Academic credentials are good, but not sufficient where your personal finances are concerned. You need an advisor with several years of experience. If the advisor is just starting a new firm, ask about their track performance in their previous places of work. However, you are better off with established firms. You can get trusted financial services from Carnegie and other established firms.
3. Who Will Handle My Investments?
Be wary of individuals who pose as financial advisors but are brokers or middlemen. Such individuals hand over your portfolio to another firm and earn a commission for bringing in new clients. Let the advisor assure you that no other parties or firms will handle your investments and financial plans.
4. Are You Under any Regulatory Controls?
One of the most important questions to ask is if the advisor is a fiduciary. You should get a straight yes to this question. You need protection from fraud and unethical actions from your advisor. Regulatory controls from third parties secure your assets. The controls assure you that you can recover any losses if your advisor breaches the contract or acts in negligence.
5. How Often Do You Communicate with Your Clients?
Hiring a financial advisor does not mean that you sit back and expect high returns from your investments. You need to communicate with your advisor as often as possible. You need proactive communication from your advisors, especially before making major buy or sell decisions. Your advisors should be willing to give you all the information you need about your finances promptly.
You need the help of a qualified and certified financial advisor to manage your personal finances properly. However, you must ask as many questions as you can before hiring one. Some individuals advertise financial services and promise to manage your investments but they are intermediaries. Feel free to disengage an advisor who is unwilling to address your concerns and questions. Transparency and free communication are vital where your personal finances are concerned.