Of the so many important questions that you have to answer regarding your money and investments, one nearly topping the list is if you have hired the right advisor? It is very important that your advisor understands your long-term goals and defines your portfolio accordingly. Any discrepancies can lead to major confusion and loss.
An advisor is like a desert guide who can guide you through the identical-looking sand dunes of a desert tackling the winds of change in the appropriate manner and setting guidelines side by side. An advisor can help you overcome the fear of being left alone and stranded in the ever confusing and changing markets. Then how to identify if the advisor you chose is the right one and loyal to you?
Here are 7 pro tips to help you judge an advisor for their loyalty;
- Conflict of interest
The first thing to check for in an advisor profile is if he is being commissioned by any company for pushing their products. If such is the case then there will be a huge conflict of interest as the advisor will only brag about the products, he is being paid commission for and will not show a transparent picture to you.
A loyal advisor will understand your long-term goals and your cash flow needs. Keeping in alignment the risk appetite and cash flow needs, the investment decision can be made which will be fruitful for you.
- Prioritizing employer needs
The next thing to know is if the advisor is more concerned about his employer’s needs and prioritizes them over yours. Other related questions to this factor are what are the value company works on? Is he paid commission for converting a client? Are all costs unveiled? How many clients does he handle? What is his TAT?
If answers to all these questions fall under your line of interest then go ahead and trust the advisor with your money. If you have the slightest of the doubts, clarify before you handover your money.
- Spectrum of services
This is one important factor to consider before hiring a financial advisor. It is the era of portfolio diversification wherein it is always advised that you must keep a mixed bag that helps you hedge against dips in one or some of the stocks. For this, you must be sure of the fact that your advisor understands and has an in-depth knowledge of the available and trending investment avenues in the market. He must be a jack of all trades in order to guide you through the market movements and fluctuations. Also, since that you are opting for financial advisory services, are the smaller tasks covered under the package as well? For example, when it is time to file taxes or return, such services must also be available to you.
There is no substitute for a well experienced and seasoned advisor who has gone through several market cycles. Your advisor must have a sound experience of portfolio restructuring during both bull and bear markets so that the investments are in your best interest.
- Regularity of advice
Does your advisor call you only when he has a new product to sell? If that’s the case, you need to review your decision. A good advisor must stay in your touch to refresh your money needs and take corrective measures as and when required. 10 years back your requirement may have been capital appreciation but today it is capital preservation, your advisor must be aware of this change in needs.
- Curating a vision together
Now that he knows what are your needs and some vague goals, it is the responsibility of an advisor to help you create a vision that is in alignment with your goals and also helps you grow your wealth. The portfolio he crafts for you must fall in place with your life planning- education, marriage, home, car, child education, child marriage etc.
- Yes Man is a big NO
Is your advisor a Yes man and never objects or questions your suggestions? If it is so then you need to do a serious revision. You would always want your advisor to be loyal and honest towards you and disagree with your suggestions that are not worthy or fruitful.
A loyal advisor not only helps you grow money but also defines your personality in such a manner that you leverage his services to create wealth and maximize your benefits.
Before you handover, your precious money to an advisor makes sure he treats your money well and knows what is best for it.