Should I get financial advisory services? How to choose the best financial advisor? A Guide
Tuesday, Aug 1, 2023
For most Indians, managing their finances is a really difficult task. There are just so many places to put your money in. Many people who are acquainted with financial advisory services use the best financial advisors for guidance but most of us don’t know where to find a financial investment advisor and how to find the right financial advisor. So, in this guide, we’ll discuss financial advisors and how to select the best financial advisory services.
Most people don’t understand the need of hiring a financial advisor, so, first let’s understand why an amateur investor should take financial advisory services.
Benefits of Hiring a Financial Advisor
Expert Knowledge: The best financial advisory services will have numerous expert analysts that understand and monitor the stock markets. These are qualified financial advisors who can give you effective financial advice. They keep updated with the trends and can advise you on multiple financial angles like taxation, retirement planning and more.
Goal Planning: The best financial advisor will guide you through the process of planning short term and long term financial goals like buying property, retirement planning and more. They suggest investment planning in a way that your financial goals are most likely to be completed. Most retail investors fail because they don’t have a plan while investing.
Risk Management: A financial investment advisor will make sure that your portfolio has a number of different securities and varied fund allocation. The best financial advisor will make sure that your portfolio is according to your risk tolerance and financial goals. Financial advisory services will regularly monitor your portfolio. Financial advisors will also make adjustments to the portfolio whenever required.
Objective Management: While investing by yourself it happens that you get emotionally attached to an asset for many reasons. It could be that you’ve been holding the investment for long periods of time. But your financial advisor will not endlessly wait for a stock to hit highs. The best financial advisor will make logical decisions and make adjustments as required.
Tax Management: Gains from investments are taxed under law and you should not evade them. But, the best financial advisor can guide you to make investments in a way that your tax liability is minimised to the best possible degree.
Time Saving: Hiring a good financial investment advisor helps immensely in saving time. As busy working individuals you would not have all the time to research and invest. So, it’s a better idea to hand it over to a financial investment advisor.
Convenience: Managing personal finances yourself is really complex. Plus, you need tons of knowledge and years of experience to even get profits. Financial advisory services on the other hand have the required knowledge and experience.
Support: The best financial advisor will be available to answer all your questions and concerns regarding the markets and your portfolio readily. Green Portfolio, for example, is available instantly via calls and chat support.
Now that it’s established that having a good financial investment advisor is better than portfolio management services yourself as an amateur in the stock markets, let’s understand how you can choose the right financial advisor. You shouldn’t choose a financial advisor without some research.
Here are some factors that you should consider while choosing a financial advisory service:
SEBI Registration: All financial advisors are legally required to be registered under SEBI and every registered advisor will have a unique registration code which should be publicly available on their website. Make sure that the financial investment advisor you select is registered, if not, they just might be fraud.
Experience: It takes years and sometimes decades to understand the equity markets. So, the financial advisor you chose should have some years of experience in the markets. Their experience will be reflected in their performance metrics. Consider their records before choosing them.
Performance Records: A very important metric to be considered while choosing a financial advisor is ofcourse the returns. The best financial advisors will have a good track of giving returns over long periods of time. Don’t consider just the one-off profits, look at long term returns for a fair judgement.
Fee Structure: All financial advisory services are priced differently. These differ according to various factors like investment size, investment strategy, etc. Weigh the fees of a financial advisor against the returns they provide and then make a decision based on everything. Opt for a financial investment advisor as per your fee budget but don’t just go blindly for the cheapest available option.
Investment Strategies: Investment strategies differ across financial advisory services. There’s no good or bad here but there is suitable and unsuitable. Look at different services and understand their strategies and only opt the one best suited to your diverse requirements.
So, when you now go and opt for financial advisory services, do a comparative analysis between your choices and make a decision based on the above factors to choose the right financial advisor.
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