What You Should Consider When Choosing a Financial Advisor

While most people might be prepared to manage their wealth on their own or to follow the suggestions of friends or families, there is no better option than to take on the services of a licensed financial advisor to help you manage your money, goals, and long-term plans as well as suggest financial products (such as investments) that can help you get ahead.

Though their services do involve fees, most financial advisors are not overly expensive, and may only take a fee (a dividend) from the results of investments they make on your behalf.

If you’re considering approaching a financial advisor, here are some key things you should keep in mind:

What are their qualifications?

It is always worthwhile to seek out a licensed financial advisor or planner who is fully qualified. While family or friends can always offer you financial tips or guidance, true financial advice can – and should – only come from a person who has suitable qualifications.

When considering the services of a financial advisor, keep in mind that a Certified Financial Planner (CFP) is required to have a recognised undergraduate and postgraduate qualification, and should have at least three years’ worth of work experience. Financial planners are also required to undergo Professional Competency Examinations, and adhere to an ethical Code of Practice. You can ask to see their qualifications at any time.

Check their background and references

Great financial advisers and planners will usually have a list of references that they will supply so that you can understand and gain insight into what work they have done in the past, and whether their clients were satisfied with their performance in the first place.

It’s always worthwhile to contact people who have used an individual’s services in the past to hear about their experience. Beyond email or a phone call, you can also search online to see what past customers have said about a financial advisor’s past service. You can also contact self-regulatory groups, such as the Financial Intermediaries Association of South Africa, to see if your preferred financial advisor is a member.

Consider how many clients they have

While having a long list of clients might sound like a financial advisor is sought-after, consider that each of those clients have specific needs and demands – and if your preferred financial advisor has many clients at present, they may not have the capacity to offer the personal service you need.

Having an upfront conversation about your expectations and a financial advisor’s ability to meet your needs can help set your relationship off to a great start.

What if you can’t afford a financial advisor?

Though having a financial advisor on-board can help you define your goals and adjust your budgets and long-term plans, you might feel as if you are unable to afford their fees.

While there is no substitute for a licensed financial advisor, there are a number of tools that can assist you in forming a financial plan-of-action. Apps such as Spendee and 22Seven can help you draw up budgets based on your spending patterns, while the Wonga Money Academy can help expand your knowledge on debt, savings, budgeting, and investing.