Critical Things To Know From Your Financial Advisor


Most of the fields have similar principles and finance is not an exception. Imagine that you have a doctor who followed a certain standard when recommending the medical treatment because you are seriously sick. However, you are not approved the best but the most suitable. The doctor could have offered you a superior treatment, but in his recommendations, he wants to use the therapy using a particular pharmaceutical company that pays him well.

If you are hiring a financial advisor, you should know that he will know more than even your friend. When it comes to money matters, then they should be personal. When you have a good rapport with the financial advisor, it’s an important dynamic.

It is something absurd, but that is what investors have been facing before they choose a financial advisor. However, there is an advisor you can avoid who uses the term “suitable” like standard advice. Here are some vital things you must know before you invest in hiring a financial advisor in your firm:

  • Prudent Investment Process

If you need to have a prospective investment management firm, here is where they should shine. You will ask them to explain to you about their investment process simply. You should expect to hear heavy details. You need to know about the investment vehicles or products that the firm favors and if they shun.

Another crucial thing is whether investment changes will be made as per your approval or there will be a modification. You will also need to know how often you can meet with the advisor. For an expert financial witness, who should be the primary contact? So, employ the ones with credentials and experience.

On the other hand, will the firm you want to hire put your consideration as their priority? If the firm is holding a fiduciary standard, it should address and disclose potential conflicts and then work on clients with interests. It is an important distinction that you should get from the firm you hire in writing.

  • Transparent Fees

In the investment world, for you to determine “all-in” costs for your investment portfolio, it becomes a murky process that is also guarded well with secrets. However, having a trusted investment management firm, it will help to explain all the fees both seen and unseen.

In the fee, they will include an hourly cost for financial planning or any fee charged as an assets percentage that is under management. If they have high fees, they will decrease the overall return of the investment portfolio. Even though, trusted financial advice will come with a price but fair fee.

  • Third-Party Custodian

You have to check whether the investment advisor is using independent custodian. If they do, they will take possession of your assets and also provide a separate report from the advisor. The best thing is that a custodian will protect you from fraud.

  • Clear Performance Reporting

When tracking your investments progress will not need clouding by abundance data. You will want clear, holding, transaction reports and easy to understand performance.


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