Ideally, the financial adviser helps the client maintain the desired balance of investment income, capital gains, and acceptable level of risk by using proper asset allocation. Financial advisers use stock, bonds, mutual funds, real estate investment trusts (REITs), options, futures, notes, and insurance products to meet the needs of their clients. Many financial advisers receive a commission payment for the various financial products that they broker, although "fee-based" planning is becoming increasingly popular in the financial services industry.
Financial advisor (FA) and financial consultant (FC) are contemporary titles for stockbroker, broker, account executive or registered representative. A variant spelling, financial adviser, also is used sometimes. Traditionally, the job has involved buying and selling securities (such as stocks and bonds) on behalf of clients.
Trust and Confidentiality
Call it by any other name, like ethics or integrity, if you please. You do not normally agree to get married the first time you meet, so why should a relationship with a financial advisor, which potentially could extend beyond your life too (for your family), be any different? Take time to meet in different environments (your home, your office, the advisor’s office) and look for tell-tale signs such as an offer for a deal that’s “too good to be true”. (My experience tells me that it normally “is too good to be true!”) Find out if your advisor pays taxes honestly, for example: his personal behavior will obviously spill over to his professional dealings.
Competence
Trust alone is not enough. Does your advisor have the knowledge to be able to offer you the right product, and more importantly, the right advice? What is his belief in continuing education, and upgrading his skills? Has he completed a professional, reputed course such as that of a Certified Financial Planner? The world is changing, and the financial world is doing so at breakneck speed. If your advisor is not keeping him abreast with the latest, you are likely to be the loser.
Service Orientation
There must be a genuine desire in your advisor to serve you. For a start, ask your advisor for a service level agreement. Are there a bunch of standard services that he will provide? Are there items on the list which he will not provide and which are essential to you? Haven’t you been able to easily make out which air hostess is doing her job and which one is thrilled to bits at being able to serve passengers in the flight? You need an advisor who’s passionate about his work.
Client Profile
Please spend time with the advisor understanding the type of clients he services. Your advisor could have expertise in dealing with young software professionals; if you are retired and less comfortable with dealing with emails as the primary source of communication, you may need to look elsewhere. If the advisor has a clear age or demographic concentration for his clients, he may be disinclined to meet the needs of a different profile of client.
Strong References
Many of my clients have asked me for references before they sign up, and I encourage that practice. I was, however, more than impressed recently with a prospect from USA who insisted on getting at least two references from the Bay area where he resided. He then proceeded to meet them personally. In his subsequent visit to India, he visited our office, and only then decided to sign up.
Financial advisors can greatly enhance their productivity and their ability to serve a large book of business if they are supported by one or more sales assistants. However, in many financial services firms, financial advisors must fund the pay of their sales assistants, in whole or in part, out of their own compensation