The most important decision of a person who wants to secure their future is selecting the right financial advisor. Whether it is to plan for retirement, investment to create wealth, or just managing one’s wealth, a good financial advisor will guide you towards your goals with the proper strategies. However, this is terrifying in India as the market is diverse, and volatile.
Here are some key considerations while identifying and choosing the right financial advisor for your needs:
1. Understand what a financial advisor does
A financial advisor can, in general, guide you on investment and retirement planning, tax planning, etc. He should calculate your present financial status and plan specially designed for your future goals. These advisors may provide services from investment advice to full future planning. You need to determine the level of services you are looking for so that you can identify the ideal advisor who can give the services that can fulfill the desired needs.
2. Check the Qualifications and Credentials
In search for a financial advisor, what one looks for in certifications or qualifications. As noted earlier, a good and eligible adviser must be certified for conducting his business professionally, therefore the certifications needed: It could include becoming certified financial planner and some sort of CFA qualification- for some examples. It would be worth checking whether the advisor is registered with regulatory bodies such as SEBI. SEBI is an authority which regulates financial advisors in India and ensures them to follow ethical standards with transparency.
3. Experience in Industry
Another very important selection criterion of the right financial advisor is experience. More or less experienced advisors can face more challenging situations in finance as well as understand the world of finance much better. An advisor with experience managing many kinds of clients can be a good fit to give you useful knowledge and take you through most stages of financial planning. So, pick one who has dealt with clients like yours and goals that you have. This may ensure he understands the unique challenges as well as opportunities you might face.
4. Seek Trust and Transparency
Trust is the only foundation for a successful association with your financial advisor. You feel comfortable talking over your future goals, apprehensions, and personal matters as well. A good advisor must listen to your needs, respect your goals and give honest and transparent advice. Find a planner who can explain his recommendation and address your questions. Any advisor who cannot clearly expound on his advice and cannot be transparent raises alarm bells.
5. Cross-Check References and Reviews
A good financial advisor should also have a proven track record. Online reviews, testimonials and referrals from past clients help in giving some indication about the good or bad word. Word-of-mouth referrals will be the best source to make a judgment about the efficacy and trustworthiness of an advisor. You can also ask the advisor for references, especially from clients with similar financial needs. The references provided by good advisors should never hesitate. Contact these people and ask them to further elaborate on how the advisor operates and how they usually tackle things.
6. Assess their communication skills
An excellent advisory relationship can be established through communication between you and your advisor. Your advisor should elucidate complicated financial issues so that you understand them; your investment positions should also be told to you. Ensure you see whether your advisor is responsive to all the calls, emails, or questions you may have. Ensure you find the advisor that gives you periodical reporting on his/her investment and how general finances are planned to benefit on. Being an advisor that foresees the needs of an individual will lead to timely management of goals through planning one’s finance.
7. Compatibility
Compatibility is the last thing to consider while choosing a financial advisor. The values and the attitude of the advisor toward money should be compatible with yours. If you are a conservative investor, then it is essential to work with an advisor who understands your risk tolerance, and you should not encourage aggressive investment strategies. But if you prefer aggressive investment, then it is necessary to find an advisor who can help in building a portfolio that would suit your risk appetite.
8. Have Long-Term Relationship Support
It is a long-term process which involves investment and continuous change and follow-up of one’s financial plan. It should have an advisor that provides continuing support so he could help you on the day you retire, get married, or when you have your child. A good advisor should be willing to have a long-term relationship with you and revise your finances as your goals and circumstances change over time.
Conclusion
It starts with the discovery of the appropriate financial advisor who can assure a better future ahead. The considerations made here include qualifications, experience, communication skills, fee structure, and compatibility, through which one selects an advisor who understands needs and leads them to the desired financial goal.
VSRK Capital offers customized advisory services. If you wish to invest, plan for your retirement, or manage your wealth, our experienced advisory team will be happy to guide you through every step of the process. Feel free to contact us today to get started on the right path.
FAQs
Should I choose a financial advisor who is independent, or one affiliated with an institution?
That all depends on you. A benefit in choosing an independent advisor would be that it is not tied into some specific products or services to which it may be more biased to. It has the capacity to give free advice and a personalized touch to your needs. On the contrary, institutional advisors like VSRK Capital are better equipped and armed to the teeth with more instruments and tools but may prove biased in their recommendations to you because of the products and services offered by the institutions. If you want more objectivity and personalized recommendations, then an independent advisor will be suitable for you, but an institution will be apt for you if you need one-stop-shop services.
What are the general fee ranges for financial advisors in India?
Three commonly used ways of charges applied by financial advisors have been flat fees, a charge for percent AUM, or as commission-based fees. One may have to shell around ₹5,000 up to ₹50,000 annually as flat fee which depends upon the degree of complexity involved. Who quoted as a percent of AUM varies anywhere in a yearly amount of 1 percent and 2 percent. The commission-based advisor earns through commission from selling products, so this can have a bias on the kind of recommendation.
How can an advisor help me formulate an investment strategy for my financial goals?
The financial advisor can help prepare a customized investment program for your future goals given your risk tolerance and the horizon. He will be in a position to help one choose the right combination of assets such as stocks, bonds, or mutual funds, while also enlightening him about diversification with an objective to minimize risks. They also monitor the performance of your portfolio and make the necessary adjustments to keep your investments aligned with your goals. An advisor like VSRK Capital can help you make the best decisions for long-term success with expert advice on how to optimize your strategy.
