Please help me find reasonably priced financial advice from someone who won’t rob me blind.
Someday, I’ll create a keyboard shortcut reply to that email, which I receive too frequently, that gives all the information to ask when seeking such a person. But an ugly fact of the investment advisory industry has generally been this: There are too few practitioners who will work with people who are not wealthy, or at least not without pushing questionable, commission-oriented investments and insurance policies. Often, when people ask me for referrals in Mumbai City, I can barely think of anyone except one firm. I have written about them here
Many of the best financial planners want to charge you a fee each year based on the assets that they manage for you, say 1 percent every 12 months. But before they will even consider working with you, you generally have to have many lakhs of rupees.
Your planner must also be ethical, which means that he /she has to pledge to act in clients’ best interest at all times. Revenue can come only from client fees, not commissions. You have to be either a CA or CFP (certified financial planner) and must have no major marks on your disciplinary record. Any issues means AVOID.
You’ll want to hire the type of financial adviser who promises to act as a fiduciary all of the time, with all of your money, which is a fancy way of saying that person must be loyal to you first. In fact, you should ask your financial planner to sign a fiduciary pledge, a promise not to profit at your expense. We’ve written a version of the pledge that you can use the next time you’re shopping for an adviser. Find it here.
After your financial planner has signed the pledge, make sure to ask these questions.
- How much experience and what experience do you have?
Look for a financial advisor who has Taxation, Insurance – Health, Life and Accident, Investments, Financial planning, retirement planning and estate planning experience at a minimum.
Additional expertise such as Counselling on college education, Counselling on purchase of real estate, Process of obtaining home loan, Ability to deal with / help you in terms of Employee Provident Fund, Gratuity and Pension is a BIG PLUS.
- What are your qualifications?
As mentioned above check the education of the person, That person should be either be a Chartered Accountant (CA) or a Certified Financial Planner or an MBA Finance from a reputed college. He could also be a Certified Financial Analyst (CFA) from CFA Institute of America. (Note of caution: Some people claim that they are CFA but actually they have just completed a course from ICFAI india which is just some college in Hyderabad and not true CFA.) People with above qualification are certified after thorough testing and they possess a very sound understanding of finance.
- What services do you offer?
The services a personal Financial Planner offers depend on a number of factors including credentials, licenses and areas of expertise.
- What is your approach to personal Financial Planning?
Ask the personal Financial Planner about the type of clients and financial situations he or she typically likes to work with. Make sure the personal Financial Planner’s viewpoint on investing is not too cautious or overly aggressive for you.
- Will you be the only person working with me?
Ask about the person who will be actually working on your case. Is it going to be somebody else in his organisation or himself? If its somebody else then does that person have the enough qualification and experience? Many a times the person whom you speak would be just the front facing Marketing person and the people actually doing the work could be an inexperienced individual.
- How will I pay for your services?
As part of your Financial Planning engagement, the personal Financial Planner should clearly tell you in writing how he or she will be paid for the services to be provided.
- How much do you typically charge?
While the amount you pay the personal Financial Planner will depend on your particular needs, the planner’s level of experience and your geographic location, the personal Financial Planner should be able to provide you with an estimate of possible costs based on the work to be performed.
- Could anyone besides me benefit from your recommendation?
The planner may also have relationships or partnerships that should be disclosed to you, such as business he or she receives for referring you to an insurance agent, accountant or attorney for implementation of the Financial Planning recommendations.
- Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?
Ask what organizations the planner is regulated by and contact these groups to conduct a background check.
- MOST importantly – Can I get everything it in writing?
Ask the personal Financial Planner to provide you with a written letter of engagement that details the services that he or she will provide. Keep this document in your files for future reference.
Disclaimer: I am not your financial planner / advisor. Also, I am not SEBI Registered Investment Adviser. I write articles to share my opinion and experiences of managing money. The information and services may contain errors, problems or other limitations so I request you to contact your Financial advisor, CA or legal advisor for professional advice before making any financial decision. All views and opinions shared here are purely individual opinions. If you have any questions or concerns regarding this post then please contact me and let me know. Also please read a full disclaimer here.