Managing the finances is not at an easy task to go with. Essential decisions regarding savings, investments, debts are necessary, but managing it all along with your expenses is important. Financial advisors help you in making the correct decisions regarding your finances. But before hiring a financial advisor, make sure you go through these points.
Let us help you with few important questions to ask your financial advisor;
* How do you choose your investment products?
Are you a fiduciary? Is the question you must ask before hiring a financial advisor and analyze if the financial advisor is recommending you a specific product, if yes then he is a fiduciary. A financial advisor will ask you about your background, your short-term and long-term goals and life history to get some insight about you. A financial advisor will never pitch a specific product, instead provide you with a bucket full of options to choose and decide where you want to invest your money.
* How will you manage my accounts for taxes?
A financial advisor should have the complete information about your finances. How do you manage it? What are your investments? What are your expenses? These all factors will help in understanding the tax pattern and where you can be tax benefitted by advising changes in your investments. This will help in making the job of the financial advisor easier and help you to manage your finances efficiently.
* Do you make the financial plan?
Financial plan encompasses the planning of finances for an individual. But nowadays, many financial planners go with the money box approach for accounting client’s cash inflows & outflows, income, expenses, financial goals may that be short-term or long-term goals and family dependency to have a clear idea about any special funds to be raised.
A good financial advisor plays an integral part in your growth journey by ensuring that your ride towards financial independence is stress free. Make sure you go through these simple yet essential points so that your wealth creation takes place without any glitches.
Rahul Jain, Head, Personal Wealth Advisory, Edelweiss