How to Evaluate Your Financial Advisor?


It is not possible to give your hard-earned money to anyone to create a financial plan. Financial plans are designed to help you increase your wealth over time.

Your financial advisor is like your personal money manager. They plan for your investment’s growth over time. They have the responsibility of protecting your financial interests first.

They should ensure that your investments grow faster than you can. It is possible to pay a fee. They can help you explore different investment opportunities.

You might think that all financial advisors are successful because they have completed the financial course or are the best in their field. It isn’t true. Investment gurus are not all the same. Many people have created an illusion within the industry.

There are both good and poor advisors, just like any other industry. It is important to choose the one that gives you the best results. This applies to stock advisory companies. These are some tips to help you choose the right one.

Licensed advisor

Many websites list financial advisor companies and individuals. They are listed on the SEBI website in India, and for stock. The apex authority SEBI issues advisors a registration number.

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Before advisors are granted certificates, they must pass the licensing exam. They receive a certificate to practice. These certificates can be found on the website or in person. After the licensing process, the advisor will be able to give you commodity tips and share tips.

Question your advisor

It is important to inquire about their fees. Some people work on a commission basis. They get paid for making recommendations and agreeing to them. Others work on a percentage basis. Fixed percentage of the asset under management. Others pay a flat fee for a lump sum.

The commission basis is better if you are a buy-and-hold investor. You will only trade a few times per year.

You will be more successful if you trade actively than if you receive commission on assets under management. He should be able provide you with future tips and regular nifty tips.

Ask the advisor the second question: Will he have a fiduciary obligation towards you? Fiduciaries are supposed to manage assets for your benefit and not his. This is an example of the duty of a lawyer to his client.

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You should also ask him who he is working for. Whether he is working with a firm or on his own. You are partnering with a broker firm if he works for a large brokerage company. You must comply with the rules and regulations of the firm if you are working for them.

One firm may have several brokers located in major cities. Each broker will be responsible for his or her own work. As a supervisor, compliance and operator, each broker will have his own responsibility.

They may be independent advisors and have an office somewhere. Perhaps compliance can be done at another location. These are just a few examples.

Warning Signs

In the early stages, there are very few warning signs. They don’t give you enough time for you to make a decision. They want to sign a few papers. They are often in a rush to sign papers and must submit documents quickly. You need to find an advisor who is available for you. You are paying for his services. He should be able, if necessary, to give you some great options tips. He shouldn’t make excuses about it.

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Another indicator is if the advisor pushes those products down your throat, in which case they receive high commission. Ask the advisor how much commission he gets. If the advisor is unwilling to reveal and hides information from you, then it is possible that there is something wrong.

Advisors should talk to their clients about their investment goals and needs. What are your goals, time frame and risk-taking abilities? He should spend enough time with you to do all of this. Every investor is different. Every investor has a different goal. Each investor’s investment plan should be unique. One plan does not work for all.