All wealthy people have a Financial Planner or Investment Adviser.
So the first question is what is a financial planner? Secondly how do I select a good one? A financial planner/adviser is a person you select to help guide you through the myriad of choices available in the investing world.
Most will hold a certification such as CFP (Certified Financial Planner) from a governing body or association.
Some financial planners will have a certification from a specific company or bank.
Every financial planner will have a field of expertise or training in specific investments.
How do I select a good financial planner? 1.
Ask family, friends and co-workers who they use for financial planning.
If you know someone who has a high net worth definitely ask them who they use.
This is the quickest way to start a list of potential financial planners.
Then start to screen your list by answering the following questions.
Does the financial planner hold a certification? Who does the financial planner work for? How long have they been managing money? Are they an individual or are there several partners? What are my short-term financial goals? What are my long-term financial goals? 2.
Does the financial planner work for a bank or a mutual fund/insurance company? There will be good financial planners that work at banks and mutual fund /insurance companies but they will push you to buy the products that the company/bank represents.
Most of this type of adviser will work for "free".
That is you do not pay them directly they are compensated by the company or bank they work for and may receive additional bonuses for selling specific products to clients.
You will be limited to the type of product that you can purchase, for example a financial planner employed by ABC Mutual Fund will not let you buy physical gold in your account with them.
The company will not be set up to deal in gold and there is limited return to the company as there are no recurring management fees.
The management fees are often referred to as a Management Expense Ratio (MER) they get a percentage for all the money managed in the fund regardless of the fund making or losing money.
This may be a good starting point for someone with a limited or zero net worth but it is not a good place for your money after you have established a net worth of say $25,000.
3.
Is the financial adviser independent of banks, insurance and mutual fund companies? Some of the very best financial advisers will be independent of banks and insurance/mutual fund companies.
These types of advisers will typically charge for managing your account but you will get a more balanced and independent view of your investments and your investment options.
You will also gain access to a wider variety of investments such as: stocks, real estate, precious metals, gemstones, and other offerings.
You then need to find out if they are a sole operator or if they have partners or associates that can take over your account if your financial adviser should become incapacitated from illness or accident.
Are the company and the employees bonded and insured? In most jurisdictions this will be required for a business license.
4.
Set up interviews with your short list of potential advisers.
Most investment advisers will have a first meeting with you for free.
If they want to charge for the meeting that is not necessarily a bad thing, they may use a fee as a way of screening clients to eliminate people who will waste their time.
If you find an adviser that charges a fee ask if the fee will be waived if you select them to manage your wealth.
Go to the meeting armed with specific questions and be prepared to write down the answers to your questions.
You will have to reveal information about yourself, your net worth and your goals for the relationship.