How to select the right Financial Advisor

Shivangi had worked hard at her job, cut down her expenses, and saved a good sum for her future. Her friend, Ravi, suggested her to put her savings in stocks so she
can earn good returns on her savings. He had earned good returns by investing in stocks. So Shivangi put all her money in stocks as suggested by Ravi. Unfortunately, after a few months, the stock market dipped, and Shivangi lost all her savings.
Her safety cushion was gone for the time being.

DIVERSIFYING YOUR INVESTMENTS
What Shivangi didn`t do is diversify her investments. Not all financial products are linked. For e.g. if she had invested a percentage of her savings in Debt Funds, even if the
stock market dipped, her money in debt funds would have been secured. Hence, it is important to take Financial advice from the right people.

SELECTING YOUR FINANCIAL ADVISOR
A good financial advisor can help you minimise your loss, manage your costs, and focus on your life goals.
Financial advisors are not just for the wealthy. Anyone who wants to get their personal finances on track and have long-term goals to achieve should take the help of a financial advisor


1. Determine what service you need
Do you need someone to manage all your finances/assets, are you looking for someone to help you plan for your retirement, do you have different milestones in life and want to plan yor finances for each of them?
After understanding what you need find the fnancial advisor who provides these services


2. How does the Financial Advisor earn income
Understand how the financial advisor earn their money.
There are two ways they can make money:
a. Charge fees to the clients. This is usually a percentage of the client`s assets managed. Managing and planning the assets/finances better is favourable for the advisor here
b. Commission on certaing financial products. Since here the income is tied to sale of financial products you need to wary about why the financial advisor is pushing for a particular fund or product.
   Earnings based on commissions is not necessarily a bad thing, some products like insurance are usually based only on commission. However, it is always useful to be extra careful

3. Do a background check
Research about the company/advisor. Find out how long they have been working in this industry, who are their experts, what are their credentials, how many clients they have serviced till date.

4. Client Testimonials
Look for clients` reviews or testimonials. Reach out to existing clients and ask for a feedback. Ask the advisor to give you some references.

5. Set up an initital call
After you are satisfied with your research, set-up an initial call or meeting. Talk to your advisor about your needs and analyze how well they are able to understand it.
Are they able to chart out a good plan for you. Is it customised to your needs?

Conclusion
Apart from professionally maintaing your finances, financial advisors also provide emotional support when markets are turbulent. They have an open dialouge with their clients, try to maintain calm, and provide some perspective on the issue and solutions on what can be done.
Selecting the right financial advisor can make a world of difference. Hence, take some time, compare and analyze, and choose the advisor best suited to you.