Is your financial planner your friend or foe?


All of us make money, save and invest it. We worry about our investments, liabilities & cash flows. Over time we accumulate assets and our wealth slowly begins to grow. However not each of us may be equipped to handle our finances in the most efficient manner. Some of us may not understand the matter in depth while some others just may not have the time. Thus it always helps to have a financial advisor guiding you along the path.


It allows us a good night’s sleep to know that an expert is keeping a good watch on our money.


Choosing the right financial advisor can be tricky. Many times we may look over the signs which tell us to bolt right out of the door. With matters pertaining to our lives earning we must ensure we are making the right choice.  We at ask you to keep the following things in mind before selecting one.

One of the primary steps must be to see his professional qualifications. A Certified Financial Planner is trained in personal finance and hence has the knowledge and the skills to guide you. Similarly is a Certified Personal Financial Advisor. While the former is an international certification, the latter is an initiative by National Institute of Securities Market.  So one must ensure his advisor has the required certification. It is not necessary but it definitely helps.

However merely attaching the credential may not make him efficient. You should ask for references of his other clients who are in the same stage of life cycle like you, ask about his experience and try and gauge his sincerity in guiding you. It can be observed from his manner of understanding your financial affairs. An advisor who knows exactly what he is doing will start by understanding his clients, their families, their goals and ambitions as well as their short comings. He will ask questions to get a clear picture to ensure he frames a plan according to your time horizons.

Another important point to note while choosing a financial advisor is to understand his mode of payment. Advisors who work on a commission basis will generally keep their interests above yours. They will push you to take insurance and invest in products from where they receive a higher commission. Such advisors should definitely be kept at bay. A fee-based planner is usually a better bet as he charges a fee for his advice. This portrays that he knows his advice is not conflicting with your financial goals. He has your interest in mind.

Also avoid such advisors who focus on only one aspect such as say your investments. A person promising to double your money in a short period isn’t an expert. He may be taking a very risky route which might not be the right one for you. A good financial advisor will focus on the whole picture and not just one aspect.

Your financial advisor should be like your coach. Always willing to help and guide you. He must be dynamic and ever ready to learn. A simple way to gauge his sincerity is to notice how willingly he answers your queries & how transparent he is. He should always keep you in the loop by conveying every detail to you. Also you as the owner of the assets mustn’t hand over your entire finances to him immediately. Ask ample questions and ensure he answers them for you. A hesitation in providing you with answers or giving you half details calls for a double check of his intentions. A good financial advisor should not just hand you the fish, but should teach you how to fish.

Our life earnings are our right and we must ensure we do not hand them over to someone who will put them at risk. Ensure you have a good financial advisor who will provide you with sound advice and help you have a financially sound future.  We at believe in the same!


The article is written by Shalmali Kulkarni.

The writer is working with as a para-planner


+2 #1 prat 2011-08-29 18:34
Well written. The writer does lay bare what one must look for in a financial advisor in a very cheerful way...

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