Avoid the mistakes and select the right financial advisor for you
admin July 28, 2021

It is more of a necessity for many of us rather than a choice to hire a financial advisor and take benefit of their expertise. But if you have the right knowledge to manage your finances, you are saved from the hassle of hiring a financial advisor.

Managing your finances includes tax preparation, financial planning, investing funds, and many other things.

The financial planner for your financial needs

To manage your finances, you need a sufficient amount of time and energy and the right resources to complete your financial tasks.

In Ireland, to cater to all your financial tasks, you may hire a financial advisor who has the expertise to guide you in every possible way, such as loans, investment, and other major areas.

A financial advisor also helps you to borrow 24 hours loans in Ireland as well. Before hiring a financial advisor, you have to ensure your decision to be informed and right to put your financial resources in the right direction.

Mistakes to avoid while choosing a financial planner

  • Being indecisive

Do not be indecisive while selecting the right financial planner. Being indecisive is more dangerous than selecting the wrong one.

Many people lose out on their excessive cash by waiting for the right time. This makes them lose their money and make wrong decisions.

Many people are unable to act or decide for their finances. Hence, there arises the need to choose a financial advisor for your financial management.

A financial advisor removes the emotional element from the situation and acts in a disciplined manner taking the right decisions for your finances.

An advisor also helps you to fulfill your goals and allocate resources as per your needs and circumstances. Your advisor should work in sync with your needs and financial wants.

  • Not asking for referrals

If you seriously want to hire a financial advisor, do not hesitate to ask for referrals from your family and friends. Many people do not ask for referrals and hire an expert.

You should always ask for recommendations. If you do not feel comfortable asking for referrals, you can ask some questions to clarify your financial advisor.

  • Are you satisfied with your financial advisor’s service?
  • What are the services that your financial advisor excels in?
  • What were your criteria for selecting your financial advisor?

There are few financial things beyond your financial advisor's control, so do not worry about them and do not include them in your criteria.

  • Misinterpreting the titles or credentials

In the field of finance, there are some credentials that anybody can obtain by spending particular time on some courses. While there are certain titles such as CPA (Certified Public Accountant) and CFP (Certified Financial Planner/ Practitioner) can only be obtained after completing professional courses.

These official titles require years of study and hard work, along with rigorous training and education.

Hence, it is important not to be impressed with the titles and go for the genuine title. You should be aware of their services to take benefit out of them.  

  • Not focusing on appropriate experience

Instead of choosing a financial advisor who is older, opt for an advisor that has relevant experience. It is always easy to connect the grey heir with years of experience.

Grey hair may only be a reflection of their age but not experience. There may be financial advisors young in age but having relevant experience by working with families like yours.

Always invest in a financial advisor that fulfills your need and the required tasks.

  • Ignoring conflicts of interest

There are two types of investors, i.e. a registered representative (RR) and a registered investment advisor (RIA).

An RR can charge you a commission 10 times than what is there in the market, whereas an RIA doesn't charge you extra irrespective of giving you a piece of profitable advice. They get paid the same amount of money regardless of their recommendations. 

There are 3 categories of compensation of financial advisers:

  1. Fee-only- The only source of these financial advisors is the fee that they charge from their customers. They do not ask for commissions.
  2. Commission- Most of the RR's falls in this category. They work on commission from their customers.
  3. Fee-based- This is a hybrid version of the above both. In this method, financial advisors charge a fee and also get commissions for what they suggest.

A financial advisor will likely be giving profitable advice irrespective of their compensation category. The main factor is to understand the extent to which their advice will be suitable for you.

  • Not checking with the team

Along with the knowledge of your financial advisor's experience and age, it is essential to know their working with a team. If your financial advisor works with other experienced professionals harmoniously, this is a good sign for you to hire them.

In Ireland, an advisor needs to have access to the broader spectrum of knowledge via collaboration with other experienced professionals.

A team may have experts in different fields such as financial planners, tax and accounting professionals, investment managers, concierge services specialists, estate planning specialists, and many others.

Every expert in the team has their own roles, such as a financial planner helps you have access to personal loans in Ireland and finds ways to increase your finances. A mix of all these specialists can be advantageous for your finances.

  • Looking for a ‘black box’ attitude

It is always good to know everything that your financial advisors are doing with your money. Many financial experts may keep you out of it and may make you feel that it is not your cup of tea.

This is like keeping you in a black box and knot, keeping you aware of anything. At the same time, some good advisors keep you well-informed every time they do something.

If an advisor does not keep you informed, consider it a red flag. You have the right to know about your money and how is it being utilized.

Even if you do not understand the details and do not want to get into it, your financial advisor's prerogative is to make you understand the basics and risks involved before investing it anywhere.

Also, they should always be available to answer your questions irrespective of how beginner level they are.

  • Not going by your instinct

Your gut instinct is always right, and it is always profitable to follow it every time. If your financial advisor thinks by stepping in your shoes and can like you simultaneously, use his expertise.

A good advisor will always decide in your interest and make appropriate decisions.

These decisions are taken by your advisors considering your circumstances and financial goals in life, like borrowing provident loans that will be profitable for you in the long run.

Before selecting your financial advisor, do your bit of research and shortlist your candidates as per your requirement. Once you select the right candidate, they will make the right decision for you.  

Some red flags to follow while selecting your financial advisor:

  1. When an advisor sells their own funds for getting paid twice.
  2. When an advisor asks you for a fee without any reason. They ask for a fee for managing as well as accessing the portfolio.
  3. When an advisor charges his/her consulting fee.

Conclusion

To manage your finances in an organized way, choosing a suitable financial advisor for yourself matches your expectations and caters to all your needs and financial goals.