Part 1 of 3 – What makes a great financial adviser?

Further to my recent blog “Money causes stress?… Why?” I highlighted the importance of having the advice and support of a financial adviser. Your next question will probably be “How do I choose a financial adviser?”, so I thought I would help you out and explain all of those key areas that make a great financial adviser.

However, whilst just listening to the advice of a great financial adviser may not make you instantly rich, it is an excellent way to assure you that you are on the right path toward achieving your financial goals. Just like some accountants or some solicitors are better than others, naturally, some financial advisers are better than others. With almost as wide a pool of financial advisers to choose from as there are colours in a rainbow, how do you decide which one is right for you? Look for signs.

Before you hire or invest via a financial adviser, make sure he or she possesses all of the following attributes that make a great financial adviser:

1. Looks out for your best interests

When you hire a financial adviser you want to be sure that you can trust that person to always give advice that is in your best interests. Before you hire an adviser, ask for testimonials and have them explain how he or they can help you achieve your financial goals.

2. Great relationship

You will be spending a lot of time with your financial adviser so it is really important that you feel at ease when talking about money and how to manage it. You should have an open line of communication and be comfortable calling and talking to your adviser any time you have a question or a problem.  Test this early in the relationship.

3. Full disclosure from the start

When you engage the services of a financial adviser you are often entering into a form of contract. In return for your business, you expect a certain level of service. While no one can guarantee that every investment can turn out perfect, your adviser should clearly state what services he or she will provide. The agreement(s) you enter into should clearly disclose the fees, service expectations and protection levels.

4. Understand your entire financial situation

One of the things that distinguish an average financial adviser from an outstanding one is his ability to ask great questions that really get you thinking. Your adviser asks those questions because he needs to get to know who you are before he can create a plan to put you on the right path for meeting your future financial goals. If he does not know you, he cannot know how much volatility you are willing to take and he can only guess at the types of investments you may need.

5. Has the right qualifications

You can’t expect that the free investment advice you get from a family member will always be sound advice, but you should expect it to be sound advice when it comes from a professional with solid credentials. A financial adviser must have been trained and passed demanding tests that demonstrate competency in the field.  Ask for qualification levels, then check them out.

6. Experienced

No matter how smart someone is in school, nothing can replace years of experience. A veteran adviser, who has helped hundreds of thousands of clients, understands what works best in real-life situations. Often aided by a company that has a lot of resources, your adviser should be well-versed in the specific advice they give.

7. Takes a realistic approach

A great financial adviser should be tough with you and not simply accept orders. You don’t want someone who will not challenge you. You want honest advice, even if it seems contrary to your personal beliefs. If you want to make all of your own financial choices, you don’t need a financial adviser.

8. Has no complaints

You should do a little investigating to make sure that the financial adviser you are considering does not have any trouble within the market. While a minor infraction may be nothing to worry about, multiple complaints or serious offences can be troubling.

9. Talks to you in a language you can understand

A financial adviser needs to be sure that his client really understands what he is saying when he is giving advice or explaining a particular financial product. Not everyone understands terminology like puts and calls, bond yields or even exchange rates. An adviser can often improve communication with his client by drawing analogies, using visual aids, and listening.

10. Keeps up with change

Tax and regulatory laws change and new financial products are introduced. Your adviser should be well-versed in all the relevant laws, rules and changes that could affect your portfolio. Embracing technology will make it easier to serve you better and also enable your financial adviser to stay current on the latest news and information.

I hope this helped you with a better understanding of what makes a great financial adviser and will allow you to make the right decision when choosing. If you are a financial adviser already for wealth management, I hope it helped you with improving your standards leading you to be a GREAT financial adviser.

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Mike is recognised at the forefront of financial planning as a financial advice mentor who demands only the best outcomes for both individuals and businesses he works alongside.

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