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Top 5 tips in choosing a Best Financial Advisor

Managing investments to grow your money is important for your financial independence. What used to be seen as investment choices in the past decade such as RD, FD, land, house are now spread in to various gold, e-gold, plots, equity, derivatives, bonds, currency, antiques etc. It is essential to tap in to investment advisor expertise to take wiser decisions.

Top 5 tips in choosing a best Financial Advisor

Managing our finances is a very important part of our lives. This is because not only do we need to maintain our regular expenses, we also need to plan our insurance needs, taxation matters and also plan for our retirement. However, many of us tend to neglect our finances either because we do not have the proper knowledge or are hard pressed for time. That is a why it is very important to have a financial advisor who can sort out your financial life and help you meet your short-term and long-term goals. Here are 5 tips to choose a financial planner who is right for you.

1. Check the credentials

The first thing to check is whether the financial advisor has the required credentials and qualifications. A financial planner should have sufficient knowledge on the subject. To begin with, your financial planner should be a SEBI registered investment advisor. As far as qualifications are concerned, the Certified Financial Planning (CFP) certification offered by the Financial Planning Standards Board is an accepted qualification that is in lines with the global benchmark. A CFP certification is thus another thing to look for, though it is not mandatory as any Financial Professional and people from related professions can also be financial planners.

2. Check the fee structure

Remember that financial advice does not come for free. A good financial planner will charge a fee for their services. In case a financial planner is not charging a fee, he or she would be depending on commissions and may be biased in his or her suggestions. Some financial planners can charge a flat fee, while some might charge a fee based on a percentage of the assets they are managing. Sit with your financial planner and discuss the fee structure. Financial planners could charge you anything between Rs 10,000 to Rs 50,000 per year.

For small portfolios, it's better to go with a periodic fee structure to pay your financial advisor rather a lumpsum annual fee.

3. Look for experience

Look for a financial planner who has seen through a few market cycles and has an idea how different asset classes have behaved during those periods. Such experience can stand you in good stead. Go for a financial planner who has at least 5 years or more experience in advising clients.

Role of a Financial Advisor is to manage money by assessing the risk, understand the macro economics, paying attention to the future growth. Overall it's a multi faceted role. Experience counts more than any other factor in choosing the best financial advisor.

Quick Facts

Best Financial Advisor Criteria

4. Fix up a meeting

It is important to meet the financial planner in person or a video conference. Find out how comfortable you are talking to him or her as the relationship with your financial planner will be an ongoing process. Hence building a good rapport with your planner is something that will benefit you. Find how often your financial plan will be reviewed and how often you can get in touch with him or her for any advice or query. Today, due to the COVID19 pandemic, many financial advisors are meeting their clients online.

5. Do a reference check

Just like when you show a doctor, a reference check is important. Talk to existing clients of the financial advisor and see how satisfied they have been with the advice provided. Find out if the financial planner spends enough time understanding the client's problems and has meaningful conversations. Ask them if after engaging with the financial planner they have seen a marked improvement in their financial life. Also to see the advisor's or his company's public profile along with the reviews and ratings.

Quick Facts

What a Financial advisor can do for you?
  1. Understand your investment goals
  2. Plan for a right portfolio mix
  3. Buying, Selling financial products
  4. Risk Management
  5. Tax Planning
  6. Retirement Planning
  7. Educating about financial products
  8. Act as a Trusted Advisor


Following the above tips will help you choose the right financial planner. After all, it is all about managing your hard-earned money.

Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.