Choosing a financial planner is like making a huge business deal; once you get it wrong there is no coming back from that. You will lose your goals, dreams and most importantly your finances if you do not get things right from the start.
The greatest thing about having your own money is you get to choose who handles and manages it. It may not be an easy choice, but it will be worth it in the end. The question is; how do you know the planner you choose is qualified, trustworthy and reputable? Or how will you know they are not?
The following red flags will help you disqualify financial planners who are not worth any risks
The financial planner is not certifies
You might be surprised to hear that there are a lot of good financial planners who unfortunately may not be certified. In the past, people did not see this as a big deal. Now, the certification of a financial planner is a standard requirement. The certification shows a standard of professionalism from the part of the planner. The certification orders the planner to put your interest first before theirs. Working with a planner who has the right kind of certificate will guaranteed ethics, transparency and accountability in your transactions.
Financial planners who offer to manage the money for free
Financial planners should be paid with an upfront fee or through commission. The upfront fee can be hourly, or the percentage of assets they agree to manage for you or a retainers. Most clients will desire a fee only payment structure because it lacks a financial incentive for the planner. A planner working on commission has the power to make trades, which is not in your best interest at all. Commission based planners represent their work as free of charge but it will cost you in the long run.
The planner has no interest in your financial goals
Some planners are just present to deal with the finances. Remember, the main role of the financial planner should be to help you plan for your life and finances not just how you use them. You should look for an advisor who has the same interest as you. Find a planner who is interested in the long term plans rather than just the finances.
The management style is unheard of
When meeting with your financial planner, you are free to ask them questions about their experiences and priorities. You should check if they have legal qualifications to be financial planners. You are also allowed to talk to their previous clients to get a glimpse of how they handle their client’s financial goals and other services. If their negative reviews overpower the positive ones, you should think twice before taking on their services.
Financial planners have the power to manage money with you or for you. There is a very big difference when it comes down to these two. When signing a financial planner, there should always be a written agreement on the methods and goals of financial planning.