How to Find a Financial Advisor 2018 – UK Based Investors

A financial advisor is plays a significant role to both new and experienced investors. A financial advisor offers their clients with advice on how best to make investments and grow their money.  You get advice on how to tackle specific goals such as how to purchase a home, or give you a broad view of your finances and the relationships of different assets. You will also be taught on how to remain disciplined when handling your financial strategies. A financial advisor will make moves on your behalf or encourage you into making them yourself.

  • Financial consulting
  • Traits of a financial advisor
  • Steps to finding a financial advisor
  • The importance of a financial advisor
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What Does Financial Consulting Entail?

One thing that the majority of entrepreneurs fail to do early is to hire a financial advisor. A financial advisor is an important figure in your financial life. They will offer you with financial suggestions and services based on your current financial situation. They will offer you with genuine information about your personal as well as business finances. If you find a financial advisor, you are guaranteed of the right guidance when it comes to money matters and taxes, which is important to your success. For a financial advisor to give you the right advice, they will gather all your personal and financial data.  They will then utilize this info to create projections that will direct you on how and when you can accomplish you set goals. Normally, these projections are based on a set of realistic assumptions about investment returns, inflation, how much an individual can save, earn and spend. A good financial advisor will advise you on what you need to do differently, the type of retirement accounts you need to use, the much you need to save, how much to save as emergency fund, and changes that much improve the situation of your taxes among others.

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Identifying a Good Financial Advisor

Various traits set apart good financial advisors from bad ones and the successful from the unsuccessful. If you are stuck on how to find a financial advisor to assist with financial planning, here is a guide of some unique traits for successful advisors.

Successful financial planners have a lot of passion for what they do.  This is an important character as standards, methodologies, laws and products in the financial world are constantly changing. A financial advisor who has a passion for their field of practice will be naturally motivated towards learning more.  Advisors who lack passion will often lag behind and struggle to keep up with the changes in the industry. This is enough to differentiate between successful and unsuccessful financial advisors.  When you set out to find a financial advisor, the first thing you should ask them is what is new in the industry. This way you can determine whether they are up to date with the current trend or not and decide whether to hire them or not. Only a passionate and successful advisor can tell you what the latest advancements in the field are and even offer you advice on what to take and what to avoid. Always be keen on this because if you hire one who is still behind in what is currently trending in the financial industry you might end up losing a lot of your money.

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Professional Salesmanship

This is an important trait to consider when you want to find a financial advisor. Professional salesmanship is one of the requirements for successful financial advisors. A good financial advisor is one who can sell their services across the entire scale of financial planning, right from estate management to investment management. These are all necessary ingredients for the success of a financial advisor. Basically, product or service sales shouldn’t be merely about making a sale. The product or service being sold should help the client. But all the same, salesmanship is a necessary tool. It is important that the financial advisor communicates clearly with their client about the problems or gaps existing in their financial plans, and then properly offer a solution and finally ask for the prospect’s business. If a financial advisor is incapable of mastering the courage to ask for business then they will get none. This is another important trait that you should consider if you are in a dilemma of how to find a financial advisor. It is essential that your advisor is capable of communicating with you everything that has to do with your finances in an effective way.  This way, they can help you come up with the best solution to your existing financial problems.

Deep Analytical Ability

For a complete and thorough financial plan, there are several areas that are involved. Some of the key areas that are involved in financial planning include:

  • cash flow planning investment management,
  • retirement planning,
  • insurance planning,
  • tax planning
  • estate planning.

A financial advisor should have a deep analytical ability.  This is an important thing when you thinking about how to find a financial advisor. Most successful financial advisors understand that he risk and return relationship direct almost all the aspects of financial planning. It is crucial to structure an investment portfolio in the right way and being able to relocate the assets as goals and time change. A financial advisor should be in a position of analyzing and planning a portfolio to fit a variety of metrics, such as beta, standard deviation, tactical property allocation, strategic asset allocation and drawdown. It is essential for you to assess the analytical abilities of a financial advisor before you can settle on one. You want to ensure that they understand all that there is to finance. He or she must offer you with verifiable information that you can rely on when making financial decisions. This will depend on his analytical ability.

Steps for Finding a Financial Advisor UK

The first step to finding a financial advisor UK is choosing the type of advisor you want to work with. Anyone can call themselves a financial advisor but is everyone qualified? The first thing that you need to understand when finding a financial advisor is that advisors are put into three categories based on how they are paid. The three categories are explained here:

a) Commission Based financial advisors: these advisors sell their financial products such as annuities, mutual funds and receive commission on those products. In most cases, they are employed by large financial institutions have their series. You must be aware of the fact that commissions can be tempting and they can end up influencing their recommendations for you.

b) Fee-based Financial Advisors: this group of advisors is relatively new to the field of finances. They are affiliated with a broker/agent and just like the commission-based group, hold a license to sell insurance or investments for commission. This group also provides financial planning just similar to the fee-only advisors.

c) Fee-Only Advisors: most recommended for comprehensive financial planning and asset planning. This type of advisors has a fiduciary responsibility to act in the best interest of the clients. They make money through flat fees, a percentage of the assets they manage, or hourly rates. Fee-only advisors don’t receive any commissions on product sales and offer more wide financial help including retirement, estate planning and taxes.

Determine the Level of Help you Require

Depending on your needs, you can choose the type of finance advice that is most appropriate for your situation.  Different financial advisors will offer different types of services depending on what your needs are. Based on the type of help you need, you are exposed to three types of financial advice services:

Comprehensive Financial Planning: this means that you want a professional who can create a one-time roadmap to achieve your financial goals. With a comprehensive financial planning, you want the advisor to take a look at everything including education, insurance, retirement, and investments among others.  When you opt for a comprehensive financial plan, you will pay a flat fee or an hourly rate based on the project’s scope.

Asset management: an asset manager invests and manages your money and offers you with continuous comprehensive financial planning all through your life. They will charge a percentage of the assets they will be managing.

Hourly Consultations:  if you have questions around a specific financial situation, such as buying a new property or selling a business, the best option would be hiring a financial advisor offering hourly consultation. These advisors offer an hourly fee and will offer you with an upfront estimate based on the work to be done.

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Know What to Look for in a Financial Advisor

In your quest to find an independent financial advisor, you must understand the qualities that you are looking for in an advisor. Consider things such as credentials, ethics and experience.

Credentials: there are numerous licenses and certificates that a financial advisor can have. These include CFA, CFP, CPA, and ChFC.  The Certified Financial Planner (CFP) is considered as the highest certification in the industry. The advisors are expected to have many years of experience, take an extensive course and pass a six-hour exam to qualify to be CPF. After they get certified, they need to complete further education and are subjected to stern ethical values. You can determine whether an advisor has ethical or legal cases against them including certain criminal charges, bankruptcies, investigations or unsettled liens by searching on sites dealing with financial professionals such as BrokerCheck. Advisors are expected to unveil any punitive actions and clashes of interest in the second part of his/her ADV. Ask your financial advisor to provide you with their ADV.

Experience: the length of time that an advisor has been in financial advice practice is important.  Consider also areas that they have previously worked to determine their experience level. While education is essential, advisors need also to be experienced in dealing with real life financial situations.

The Importance of a Financial Advisor

The majority of individuals are comfortable with what they earn and can live within their means. Most will be happy when they don’t have unmanageable debts and will often view the idea of hiring a financial advisor as a waste of time. But with the help of a financial advisor, they can manage their finances better. The services of a financial advisor are invaluable and offer you with many benefits.  An advisor will examine your financial situation and pinpoint your weak points that need to be strengthened. They might for instance alert you on areas where you are wasting your money and not getting optimal returns. Another benefit of these professionals is that they help you chart out your professional goals. They will help you draw up a plan that will help you achieve your financial targets. He can advise you, for instance to split your goals into long-term, short-term or medium-term. This allows you to better manage your finances. Finally, the advisor can offer a recommendation of products that can assist you in reaching your goals quickly. He will assess your risk profile, financial responsibilities as well as your personality. He will then explain the features of the product and how to invest.

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Conclusion:

How to Find a Financial Advisor

Financial advisors play an important role in our daily lives.  These professionals are dedicated towards offering their clients with genuine details of their financial situations. If you find an independent financial advisor, then you will have made one big step towards ensuring that you have a successful financial life. A financial advisor will take you through your personal and business finances highlighting areas that need to be improved. They will help you identify a gap in your finances and then offer you with viable solutions. Advisors offer you with such indispensable assistance in managing your investments and offering you advice on what you should do. A good financial advisor will have certain traits that set him apart from the unsuccessful ones. Professional and experienced financial advisors will have deep analytical ability, have a professional salesmanship and are passionate about managing wealth and planning finances. The bottom line is that you should be careful when searching for a financial advisor to ensure that you enjoy the full benefits of hiring one.

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