How to find the right financial planner

Lili | March 3, 2019 | 0 | Finance

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Mumbai: If you are a salaried individual and find it difficult to take out time to manage your money or are simply not able understand financial planning, you should consider hiring afinancial planner.

However, it is important to pick the right financial planner who understands your financial goals. You don’t want to give your money to the wrong person to manage it. Also there have been multiple cases where individuals have been cheated by fraudsters. Here are a few things you should keep in mind before hiring a financial planner:

Check for credentials

Usually, people check with their friends or family for a financial planner or search online. Once you have some names handy, you need to verify whether the individual is qualified to give you financial advice. Make a note of the institutions that the planner mentions and do research on it to ensure that the person is eligible. The easiest way to do this is by going through referral.

Opt for fee-only planner

In India, people are still not comfortable paying a fee for advice. However, it is in your best interest to opt for a planner or an advisor who charges you a fee. This way the person is unlikely to sell a product on which they can earn a high commission and which gives you little benefit. Depending on the person, location and depth of advice, the fee structure varies. Usually there is a flat fee in the range of 10,000- 50,000. You could be charged an annual fee of 0.5-1% of the total assets being managed.

Avoid those who are trying to sell products

If you come across someone who is only talking about one or two products and focuses on doubling your money, you are in the wrong space.

An advisor should be able to create a financial portfolio for you that will enable you to fulfil your goals such as retirement, child’s education and travel plans.

Ideally, the planner will ask you about your financial goals and try to understand what you want to achieve from your investment. Only after multiple interactions, will the chat move toward investment instrument. Anyone selling you financial products is not the right one.

Planning and execution skills of the advisor

Just because an individual is certified to give advice, charges a fee and gives your basic planning structure doesn’t mean your search has ended. You also need to see if your advisor has the ability to plan and execute it. Hence, you need to have multiple meetings with the planner before hiring them. After all, it is your money that the planner will be managing in the future.

Also, ensure that the individual is not shy about communication and wants to engage with you regularly. This way you will be aware about all the financial decisions being taken and understand your investments too.

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