How to Know If Your Financial Planner Is Worth It

Here’s how to distinguish the real planners from the salespeople among the plethora of fee-based experts available on the market.

It might seem like a major move to hire a financial counselor. Whether you are saving for retirement, purchasing a home, or paying for your child’s school, you are entrusting them with your future aspirations, not just statistics. However, how can you determine if the cost you are paying is appropriate?

Openness on costs and services

The first thing to look for is the clarity with which your adviser outlines their price schedule. A sincere adviser will not be reluctant to disclose whether they charge commissions, flat fees, or a combination of the two. It is a warning sign if you can not figure out where their motivations are.

Qualifications and regulatory clearances

Only SEBI-registered investment advisers (RIAs) are permitted to provide fee-based, pure financial advice in India. You may use the SEBI website to find out whether your adviser has registered. In addition, credentials such as the Certified Financial Planner (CFP) provide legitimacy, but regulations are the unavoidable.

Customized guidance rather than generic plans

You will not gain value for your money if your adviser gives you a portfolio that looks eerily similar to everyone else’s. Before suggesting methods tailored to your needs, a competent adviser should take the time to learn about your family’s objectives, risk tolerance, and income.

Accessibility and communication

The role of an adviser extends beyond just helping you with your financial planning. They have to be accessible for regular check-ins, assist you in adjusting to changes such as changes in employment or tax updates, and provide clear explanations of choices. It is a bad indicator if they only contact you when it is time to sell you a new product.

outcomes that are quantifiable

Lastly, evaluate the adviser based on results. Although no one can guarantee returns, you should eventually observe observable advantages like lower tax obligations, a well-balanced portfolio, or advancement toward your savings goals. You are spending too much for too little if all you are left with are pricey goods and no clarity.

FAQs

1. What is the appropriate fee for a financial counselor in India?

Depending on complexity, fee-only RIAs typically charge between ₹10,000 and ₹25,000 year for a financial plan. Commission-based consultants make money from the goods you purchase rather than charging up front.

2. Is it possible to function without a financial advisor?

Yes, if you have the necessary self-control and feel at ease managing investments, taxes, and insurance. However, most individuals may avoid expensive blunders with the guidance of a knowledgeable counsel.

3. What is a financial advisor’s greatest red flag?

You should go elsewhere if they aggressively promote items, avoid discussing prices, or lack SEBI registration.

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