If you are in financial trouble, and have been in a similar situation for quite a long time, it is a clear indication that you are not very good with financial decisions. Take it as a clear sign that you need a financial advisor, but it’s not easy to trust someone else with your money and money-managing decisions.
However, financial advisors are professionals with their repute built on honesty and trustworthiness. There are people who trust these professionals with more money than you have right now. So, it is not a bad idea to consider help from advisors. The decision, however, comes with its own complications. There are several factors that should consider to make sure you are able to get as much benefit out of your decision as possible.
Know Who They Serve
It is important to know where your financial advisor firm makes its money from. It is better to work with firms that solely make money from their clients like you. There are many firms who get commission from the big fishes i.e. the insurance companies, mutual fund companies, or brokerage firms. It is unrealistic to expect that these firms will be working solely in your favor and offer unbiased advice. Instead of finding the best option for you, they will be more interested in selling the product that earns them more commission.
Transparency is very important when it comes to trusting someone with your own finances. When hiring professional help, make sure the firm has a transparent fee as well as clear process. Ask them questions regarding their investment process and if they are able to provide clear, understandable, and satisfying explanation without throwing in too many jargons, it is safe to trust them. Ask them about their preferred investment instruments and inquire about the expected return on investment. Similarly, make sure there are no confusions when it comes to the cost of investment portfolio. Allow them to explain each and every fee they charge.
Finally, one of the most important factor to determine whether you should work with a financial advisor is the way they track and report performance. Investigate about the way they report transactions, holding, and performance. How they assess and review portfolio. Most firms will send you monthly, quarterly, or semi-annual reports. It is best to work with a firm that does this more frequently than the one that does it only once a year or doesn’t have a set schedule.
With these factors considered, you can see how trustworthy a financial advisor will prove to be. Choose the right professional to help you and you are bound to make profitable decisions.