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Deciding to use a financial adviser can be a significant turning point regarding financial stability and planning. The right financial adviser can bring a wealth of benefits to individuals looking to diversify their finances, proactively plan their retirement or seize investment opportunities. However, reaping the benefits of working with a financial adviser hinges on one critical step; choosing the right one. 

To help you know what to look for and what to avoid, we’ve compiled a list of top tips for choosing the right financial adviser; here’s what you need to know. 

How to choose the right financial adviser 

Choosing the right financial adviser is no small task and can feel overwhelming at times, especially when considering the impact that their services can have on your financial situation. Fortunately, you’re not in it alone. Here are our top five tips to help you on your quest to find the right financial adviser for you and your financial needs.

Understand and review their fee structure

When considering financial advisers, it’s important to have a good understanding of their fee structure and how it affects your budget. Some financial advisers charge based on the assets or investments they manage on your behalf, whereas others may charge a flat fee or receive commissions. Be sure to find a financial adviser that is upfront about their fee structure so you can better understand how much you’ll be required to spend to work with them long-term. 

Confirm which financial services you will require

It’s essential to go into your search for the right financial adviser with an idea of which services you will require. This will help streamline the process and help you pinpoint which advisers align with your overall financial objectives and goals. Although financial services can vary depending on the adviser, some of the most common services include investment advice, debt management, budgeting advice, insurance coverage, estate planning, retirement planning and tax planning. Before choosing the right financial adviser, be sure to pinpoint your financial needs and the reasoning behind wanting to hire a financial adviser in the first place.  

 Review a financial adviser’s credentials

When creating your shortlist of financial advisers, it’s important to note and review the specific credentials of each. Unfortunately, no standard certification exists for qualifying as a “financial planner.” Therefore, it’s critical for individuals to do their homework and review the professional history and credentials of their financial adviser of choice. Some standard credentials to look out for include; CFP®, CFA, CIMA, ChFC and CRC. 

Determine whether you need a fiduciary financial adviser

It’s a common misconception that all financial advisers would put their client’s needs above everything else to avoid conflicts of interest. However, this is not always the case. Although many professionals fall under the term’ financial adviser’, not all of them are subject to the fiduciary standard. The fiduciary standard is a regulatory rule requiring financial advisers to prioritise the client’s best interests ahead of their own, even if recommending certain standards could potentially reduce their compensation. As a potential client, weigh the pros and cons of working with a fiduciary and allow it to help guide you in choosing the right financial adviser for your specific financial needs. 

How do they manage revenue streams? 

When working with a financial adviser, you want to ensure that your financial objectives don’t play second fiddle to the additional administrative tasks that burden financial advisers on a daily basis. In addition, you’d like to know that their recommendations and advice are backed by real-time data-driven insights specifically geared towards your unique financial needs. Therefore, it’s important to ask your financial adviser about the revenue tracking and data and analytic software they use to manage your assets best. 

At Commspace, we support financial advisers with the best financial adviser revenue management solution in South Africa so that they can deliver optimal service to their clients. 

Ultimately, choosing the right financial adviser highly depends on clear, transparent and open communication. The partnership between financial advisers and their clients is one that is founded on the principle of trust and authenticity. These values should be evident from the get-go, from onboarding to retirement planning. 

Fortunately, finding the right one doesn’t have to exhaust your time and resources. If you have any other questions that we didn’t cover in our article, have a look at our resource library, complete with everything you need about navigating financial adviser revenue, misconceptions and best practices.