What You Need to Know to Choose the Perfect Financial Adviser for You

Xcela Wealth
Who is a financial advisor?
Financial advisors are focused on helping clients achieve set financial goals, which range from finance management, investing to growing savings. According to the Money Advice Service, financial advisors come in number guises depending on the area of specialization. The most commonly used titles for financial advisors include a broker, consultant, accountant, investment advisor, financial planner and pension advisor. The term broker is often used, when the advisor is dealing with products such as home, car insurance, mortgages and investments like shares.

Choosing financial advisor
Whether you are looking for estate planner, tax planner, estate planner or insurance agent, finding the right financial advisor can be challenging, especially for the first time. According to the Wall Street Journal, the best place to start is choosing a Certified Financial Planner (CFP); reading the planner’s code of ethics and analyze their pay structure. Certified financial planners often come off as credible; because of the rigorous testing standards and qualifications demanded. Besides CFP, the other professional accreditations include Chartered Financial Consultant (ChFC), Personal Financial Specialist (PSF) and Registered Investment Advisor (RIA). The ChFC certification is easier to achieve compared to a CFP because the latter demands passing a comprehensive board examination.

Financial advisors with Certified Public Advisor (CPA) accreditation can easily apply to become PFS if they decide to delve into the sphere of financial planning. Due to the exorbitant fee charged by some advisors, clients looking for professional advice are encouraged to look at the pay structure adhered to by the advisors. If you do not have a trusted advisor at your beck and call; one way to evade higher charges is by avoiding commission-based advisors. Commission based financial advisors, be they registered representatives or brokers are offered commission based on the products they sell. Most of these advisors operate under the aegis of larger corporations. If you do not have a lot of assets at your disposal, you can always consider advisors who charge by the hour.

The other factors to take into account before hiring a financial planner is establishing their commitment to fiduciary and assessing their professional record through background checks. An advisor committed to upholding the tenets of fiduciary often acts in the interest of the client. The fiduciary standards in the US require an advisor to make reasonable investment recommendations bereft of any external interference. The decisions should be made based on a reasonable inquiry into the client’s financial situation and investment objectives. Running a background check is highly recommended as part of the integrity test. The scrutiny of records may indicate if the planner has been subject to investigation by any regulatory body or investment author, and reveal records of past crime or convictions.

The most desirable traits in a financial advisor
According to Letsmakeaplan.org, the considerations for choosing a financial planner can be summarized by looking at the following key traits: competence, objectivity, compliance, privacy, diligence, integrity, and clarity. Privacy is a critical factor that helps establish a strong bond and trust between the planner and clients. The relationship involves disclosure of personal and financial information that must be safeguarded at all times. The information should only be shared at the client’s request; on behalf of the business or when the information is demanded by the courts. Planners need to do their work by upholding professionalism and honesty at all times.

A planner with integrity will ultimately place principle over individual gain and work in compliance with the industry regulations. Objectivity is another crucial trait in choosing a financial advisor. An objective advisor should be in a position to tell his or her client whether the goals they want to achieve are attainable or unrealistic, bearing in mind the level of commitment required and available resource. Lastly, it is important to establish if the advisor has a successful, past record of coaching clients. Without breaking the rules of disclosure, you can request the advisor to provide a list of clients they have successfully assisted in the past to establish if they fit the billing.

About Adam Hoffman
Xcela Wealth is a leading financial consulting firm based in Melbourne, Australia. The firm focuses on educating and empowering investors to achieve a stable financial future. Adam Hoffman serves as Xcela Wealth personal finance expert, specializing in long-term personal development practices. His clients include high net worth individuals working across various industries in the UK and Australia. Adam holds an accounting, business, finance undergraduate and master’s degree from the University of Melbourne. During his off days, he enjoys surfing, outdoor activities and spending time with his family.


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