What Goes Into The Making Of A Proper Financial Advisor?

What Goes Into The Making Of A Proper Financial Advisor

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As a person shopping for a financial adviser to help you formulate and achieve your financial goals faster, you may find yourself keen on knowing what actually goes into the making of a good advisor of finance. After all, seeing how important the financial aspect of your life is, you can't take advice regarding it from just anybody.' It is from such a background that you would be keen on finding what goes into the making of a good financial advisor, so that you can retain the services of such a professional, and thus avoid the perils that could come out of poor financial advice.

Now, without a doubt, a good advisor of finance has to be a person with a good understanding of financial management. It is therefore in order for you, before retaining any person as your financial advisor, to ask them (tactfully of course) what their qualifications for the task are. You simply can't afford to take financial advice from a quack. Besides having a sound and relevant educational background, a proper advisor of finance will also need to have the relevant certifications and licenses. Anybody without those purporting to offer financial advice is a quack.

A good financial advisor has to be a person with good understanding of the psychology of money.' You come to realize that sound financial management is not just about number crunching. There are emotions (of fear, of desire and so on) involved. In fact, if you have been having difficulties in your financial life, chances are that part of the problem is emanating from this area. It could even be that the whole problem is rooted in your psychology. A good advisor of finance is therefore also a good counselor, capable of digging for the root causes of problems, and actually addressing them. The financial advisor's competence in this area is probably something you can work out from a brief chat with him or her (as you notice patterns in terms of how he looks at the problems you give him or her, whether he or she is quick to give advice as opposed to listening, what sorts of solutions he or she is thinking in terms of, and so on).

A good advisor of finance also has to be a person with some track record of success in the field. Of course, it is not always that the most experienced professionals turn out to be the best (as their experience could be the wrong type of experience, namely the experience of failure). But, at the same time, you also don't need someone learning the job with you as the guinea pig.' It may be a newly-minted financial advisor you ultimately choose to work with but you need to ensure that they at least have some experience gained in the course of their internship or something. Ideally though, you should work with a professional who can truthfully cite cases of sound financial advice given.

Finally, a good advisor of finance has to be a person without conflicting interests. Ideally and this is very important- you should work with a fees-only' independent financial advisor, and not one of those investment/insurance salesmen masquerading as financial advisors. Should you opt to work with the latter, you can almost be certain that they will misadvise you into buying their investments (even if that is not the best thing given your circumstances), so that that they can earn their commissions.

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