Beware of the mistakes while hiring a Financial Advisor

Health and wealth are two important aspects of an individual’s life, where professional input is of utmost assistance. But in most cases, people tend to handle health care service differently from financial service. No one pays a visit to the dentist or the physician on a regular basis but might have to go to the professional financial advisor on a daily basis depending on the financial status of the investor. People often tend to complicate their financial situation by attempting to take decisions without any professional help or hire the wrong advisor for his financial decisions. In this context, it is worth mentioning that the term advisor has a broad meaning and includes brokers, financial planners, and wealth managers among others.

In most cases, people commit certain mistakes that can easily be avoided if certain precautionary measures are taken and knowing in detail about the role of a financial advisor. Some of the common mistakes to be taken note of include –

Confusing different types of Advisors

As already mentioned, you cannot expect to receive the same service from a broker as you can from a financial planner. Brokers generally deal with a portion of your financial life, i.e. investment-related matters and they will be least interested to know your overall financial status. On the other hand, a good financial planner will consider every aspect of your financial status, such as estate planning, insurance, investment management, and tax planning. Knowing which professional provides what type of service can ensure a proper return for your investment.

Not conducting a background check

You put all your hard-earned money at stake when you decide to work in collaboration with a professional financial advisor. You cannot afford to vest all your years of income in inexperienced or incapable hands. Therefore, you need to check the credentials of the advisor either online or through physical verification just to make sure that the advisor to whom you have assigned such an important task is experienced and efficient.

Ignoring the Fiduciary Responsibility

Find a financial advisor, Honolulu with Fiduciary responsibility to ensure that the interest of the client will always be upheld over the interest of the advisor. Whereas, a broker has no fiduciary responsibility and is not liable to uphold the interest of his clients. The loss or gain accrued is the sole responsibility of the client. In this context, it is worth noting that a fee-only financial planner has the highest fiduciary responsibility and will have the least possible conflict of interest during the course of offering advisory services to their clients.

Having unrealistic expectation from investment

There are potential investors who think that their income will reach sky-high as soon as they hire a professional financial advisor. But this is not the case, as no advisor guarantees positive returns from their investment. There is always a risk of seeing negative figures in the investment amount. This is because the market is volatile and no person can predict the future situation with accuracy. However, there still remains a possibility that professionals who deal with financial matters on a regular basis will be able to provide better advice on savings and investment-related matters than those who are inexperienced.

Conclusion

Even when you understand the roles and responsibilities of a financial advisor it is no guarantee that you will hire the right one. Make sure to conduct proper market research and compare and contrast among eligible candidates to find a financial advisor, Honolulu that best meets your financial needs.

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