3 Important Questions Investors Need to Ask to Find the Right Financial Adviser
Looking to use services of a financial adviser? If so, then it will be necessary to ensure that you are hiring the right person who will be able to provide advice according to financial situation you are in. In this context we will go through some details you need to check to find the right person for this important task.
Questions to Ask for Finding the Right Financial Adviser
Can you show a sample of financial plan you develop for clients?
Structure, layout as well as contents of any financial plan would generally vary from one financial adviser to another. One adviser may offer a financial plan that is very brief while other advisers may provide something which is well detailed with charts, graphs and other important details.
An overview of these plans will give you a clear idea of the way advisers function. It will also provide you the opportunity to find certain aspects of financial plans that you are not able to understand.
Do you make assumptions while running projections?
If you are looking for a financial adviser to assist you with retirement planning then it will be important to known whether the adviser utilizes certain assumptions while making projections related to retirement planning.
The benefit of such projections is that they allow you to visualize amount to money you will be able to spend on a yearly basis right up to your life expectancy. Let us look at some of the assumptions upon which such projections are based:
• Rate of inflation
• Amount of spending
• Rate of return for growth of assets
While looking for a financial adviser you will have to search for someone who utilizes conservative as well as realistic assumptions. This way you can be sure that you may well end up having a lot more than what was projected but not with something strikingly less than the projection.
What happens if contract is terminated?
At the time of hiring a financial adviser you need to have information on what would happen in case you decide to terminate the contract. Few of the questions you will have to find answers for are:
• What are adviser's termination rules? When and how the contract can be terminated?
• How the fees will be refunded? (as for instance, right at the inception you should know about any specific rule in the contract which states that fees is to be paid for first six months and there will be no refund in case you decide to terminate the contract before six months complete)?
• What would happen to investments and accounts when the contract is terminated? Will you be allowed to leave with your accounts when contract gets terminated? Does the firm own these accounts (which means it will become necessary for you to close these accounts, cash out and create new accounts somewhere else)?
As we can see there are several things you need to check to ensure that you are handing over your finances to someone who has required knowledge and experience to manage them properly.