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Choosing the right financial adviser is one of the most important decisions you can make.  There are so many financial decisions that you will make during your lifetime, that it will be almost impossible to make the right decision every time without the help of a trained professional. With that in mind, here is a list of some of the major “do’s and don’ts” to look for in a financial adviser.
What they should do:
  • Speak in plain English.  If your adviser can’t clearly explain a financial strategy or product in a simple way, there may be either one of two things happening; either they don’t fully understand it, or they don’t want you to fully understand it.
  • Spend time getting to know you and your situation.  Everyone’s situation is different, and financial planning shouldn’t be a ‘one size fits all’ process.
  • Spend time working out your goals.  A lot of the early discussions with a good adviser should be about setting achievable goals that are relevant to you.  If your adviser doesn’t know where you want to go, how can they help you get there?
  • Know the limits of their own knowledge.  A good adviser should work as a ‘project manager’ as part of a team of other professionals (e.g. solicitors, accountants, mortgage brokers) and should know when to get these other team members involved in the decision making process.
  • Be able to clearly explain their fees and costs.  This information should be disclosed in an open and upfront way, not hidden in the back of a lengthy document.

What they shouldn’t do:
  • Promise unbelievable returns.  If it sounds too good to be true… it probably is.
  • Only talk about managing your existing investments.  A good financial adviser should be able to talk to you about growing your wealth in a sustainable way over the long term, both by looking at where your existing funds are invested and also by helping you with a plan to put extra money away each year (if you need to do so to achieve your goals).
  • Focus on products instead of strategies.  Think of it as spending more time talking about the road you want to take and the mode of transport you want to use, not about which model of car you’re going to take.
  • Look at your financial situation as completely separate from your lifestyle.  Good financial planning is about lifestyle planning, not just about being the richest corpse you possibly can.

Written by Michael Hogue.
Published by Michael Hogue November 14, 2015