Saturday, September 29, 2007

How to choose a good Financial Planner?

Its my 100th posting!!! I'll continue to give my 100% and look forward to my 200th posting...

Today, I like to share on how we can choose a good Financial Planner? Saw this report in Straits Times last month. I had summarised for you.

1) Word of mouth
If he comes strongly recommended by trusted friends or family members, chances are he’s been making their money work for them quite well.

2) The Chemistry
You are going to have to share personal aspects of your life, from your income to your marriage plans, with this person.So it’s important that you feel comfortable enough with him to be honest about your financial details and goals, as well as to ask as many questions about his advice as you need to.

3) Research on the company that your financial planner belongs to
An established firm or a firm headed by someone with extensive experience is a better bet, because chances are that this firm will know how to steer you wisely during a sluggish market as well as bring in the profits during prosperous markets.

4) The first meeting
He should be asking you extensive, detailed questions about your financial history and future aspirations, in order to analyse your needs. Someone who is more interested in telling you about the different financial products he can offer you is probably more concerned about making a quick buck.
5) Practice what he preaches
Do not be afraid to ask your financial planner what his own personal plan is like, as a good financial planner will always practise what he preaches.

6) His relevant Qualifications
You can ask your prospective financial planner if he has taken any courses to earn additional accreditations like the Chartered Financial Consultant (ChFC). Getting such designations requires some years of experience in the industry. If your prospective financial planner is taking such courses, it’s a reliable sign that he is in the industry for the long haul.


Anonymous said...

A financial planner will help to guide you along the pathway to enduring financial stability. A good advisor looks at the big picture, evaluating where you are presently in order to design a plan to get you where you want to be in the future. But do you really need a planner, or can you do the job yourself?

In order to answer that question, you must take stock of your own desires and goals, as well as your likes and dislikes, your patience level and personal tolerances. If you have a basic working knowledge of financial matters, of investments, tax strategies and the like, you may feel comfortable enough to go it alone. There are tremendous amounts of information available through books, trade magazines, and of course, the internet. Software is readily available to help you calculate and make important decisions; online personal help is also available through membership websites and self-help groups. If you are inclined to roll up your sleeves, study and learn, and do the work yourself, the tools are certainly available.

If, however, you have neither the aptitude nor desire to develop and implement your own financial plan, then you’ll certainly want to the engage the help of a qualified advisor. But how do you choose? How do you know which planner is right for you?

The first thing you’ll need to do, again, is examine your own financial position and goals. Also, you’ll want to determine your own risk tolerance level. When your investment holdings take a downturn, will you lose your hair or will you be able to ride it out? And, you’ll need to know exactly what you want from your planner.

After completing your self-exam, begin shopping around for a good financial planner. One of the best ways to find what you’re looking for is word-of-mouth. Ask your family members, friends and business colleagues for the names of planners they’ve used or recommend. Narrow your list to several of the top candidates.

Once you have your prospects, set up interviews with each one. Make a list of questions to ask. And be sure that this initial consultation is free of charge. Remember, you are interviewing them regarding the possibility of hiring their services. You want to make sure that you’re comfortable with him or her; that their investment philosophy is in tune with your own. If your tolerance for risk is low, you don’t want to hire an investment planner who is aggressive about high-yield, high-risk stocks and bonds.

During the interview, take note of the advisor’s answers to your questions. Do they seem knowledgeable and honest? Are they straightforward concerning different types of investment strategies? Do they give you the pros and the cons? Do they listen intently as you describe your own financial situation and goals? Again, you must have a comfort level about this person’s philosophy and fiduciary commitment.

Before making a final selection, be aware of the various methods of charging fees that planners use. Once you’ve made your choice, do a background and credentials check. Ask to see the planner’s Form ADV. If the advisor is a stockbroker, you’ll also want to check the Central Registration Depository (CRD) records as well. If they’re a lawyer or accountant, check your state’s board associations for those particular professions. And last but certainly not least, contact the Better Business Bureau for any complaints that may have been lodged against the planner.

Be thorough in your search. Do your homework. Your money’s worth the effort to find the right financial planner to help you reach your goals.

Khiat Han Hwee Adrian said...

A Financial Planner plays a crucial role in the society.

The general public are largely not bothered with issues like Insurance and Investment. They over or under insured and taking excessive or too little risk with their investment.

The planner educate and try convince them the importance of planning. They help reduce the burden of the society in future.

The problem is this industry is that the regulators are not tight enough to ensure professionalism. The Sales environment is too strong where many true adviser cannot earn a proper income whereas those sales adviser earns big bucks.

I expect things to change in the next 3-5 yrs. Advisory force will be less sales based and better advices will be given soon.