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Do You Have A Trusted Financial Advisor?

Do You Have A Trusted Financial Advisor?


“Many people prefer to work with someone who does have to keep their interests first. Should your advisor be forthcoming with that information, or should you find out after the fact?”

I often hear clients talk about having a trusted advisor. I am not sure what they mean. If you’re like many people in search of a wealth advisor, you generally go and talk to your friends and family or allied professionals. Most people tell me they want someone who is trustworthy.

So, they’re basically not clear with the idea of choosing the right financial advisor. So, Let’s start with competence. Many types of professionals call themselves a ‘wealth advisor.’ Attorneys, certified public accountants, insurance salespeople and professionals registered to sell securities (stocks, bonds, options, etc.), to name a few. There is no ‘wealth advisor’ designation. Some professionals who refer to themselves as wealth advisors have obtained qualifications, such as Certified Financial Planner, Chartered Financial Analyst and Chartered Financial Consultant, to name a few.

Well, we would like to tell you a few things that you can check while choosing your financial advisor. This likely will require that you simply experience their services and continue to keep your antenna up. So, ask yourself these:

  1. Do the strategies they recommend work as explained?
  2. Do they meet the expectations that they set?
  3. Do they show up for meetings on time?
  4. Are they prepared?
  5. Do they speak in a language that you can understand?
  6. Are they transparent and forthcoming with information that you may not have asked about?
  7. Do they have to keep your interests ahead of their own in the interests of their firm? At the least, you may always need to concern yourself about this conflict of interest in evaluating their recommendations – especially those that are irrevocable or have high costs to undo.

This list is not exhaustive but provides some guidance to assist you in evaluating your current or future wealth advisor. I hope you get the answers to these questions, Meanwhile, we provide you some mindblowing facts and data that is going on around you.

When Brokers Go Bankrupt

Last week, two discount brokers (F6 Finserve & Ficus Securities) were declared as defaulters by SEBI. Some clients have lost their transit shares to this bankruptcy. These brokers were aggressively advertising their Zero Brokerage plans. In fact, one of them was giving a tablet free if you open an account.

Be Careful Of The Free Lunches

Please be careful if something is being offered free. These discount brokers use your transit shares to offer margin funding to their high trading clients. This can get really risky when markets fall sharply. Most discount brokers started after 2012 and are yet to see a bad cycle. Two of the above got bankrupt in the recent fall.

Pennywise, Pound Foolish?

Your decision to save a few bucks on brokerage could end up jeopardizing your stock holdings. Please do your due diligence before you or your friends get attracted to discount brokers.

To improve financial health, you need a financial expert like a certified financial planner. So, choose wisely and after looking for different options available in the market, make your best decision.

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