Independent Financial Adviser – IFA selection required enough care from our side. Since they are the person advising you the most possible instruments like insurance, mortgages, to do your financial plan, there lots of room for a cheating or act for self interest on to trap you for there own profit by huge commissions by insurers, mortgage providers etc…
It is your duty to identify a best, impartial, non-greedy Independent Financial Adviser using common sense. Below are some points you have to keep in mind and find answer from the mouth if an IFA to decide whether he is a suitable perfect person for you to keep as your financial adviser.
When you first meet an IFA, you want reassurance from him that he is completely independent and will give you best advice. Test his knowledge. And if you don’t like or trust the person, don’t even think about going any further. Meet several IFAs until you find one you do trust and you feel will act in your best interests over the long term.Be aware that an IFA must give you a menu outlining both his fee and commission-charging options and that he is obliged to offer you this ‘fees’ option.1. Is he authorized as an Independent Financial adviser?2. Is he associated with any company?3. What is his pay source to provide a complete financial planning advise to you?4. How much it cost you to make him as his financial adviser?5. Is he able to compare multiple product and able to convince you on why he select a particular product for you compare with other one?6. What is the commission he is going to receive by giving this product to you compare with other similar product?7. If not, what wrong he found with the other cheaper one?8. Is the commission you paying to the financial adviser is the one time one and associated with the product friend end cost or separate?9. Is it associated with the product front end load, then is it only the one time payment or for several years? (Insurance policy premium for each year have front end load that pay a fixed amount to the agent as his commission. You are losing that money from your premium)10. Is he able to convince how the commission charges of instruments affect your investments?11. Is he willing to work well for you if you are providing fees to him instead of getting commissions from companies after he advising there products for you as an investment instrument?12. What is the motivations behind his investment advise and how he is coming to the calculations to select them for you? In other word, how he is determining the product is best suitable for you?13. What is the possibilities of walking out by selling the advised products and what will be the penalties for the same?All the above models questions need only common sense. You have to find out the maximum about the nature and correctors of the IFA because each mistake cost you in the way of losing your hard earned money.Always make sure to collect required informations and compare the same with multiple options. To do so, you have to have a list of various IFA’s and contact, ask, identify to get the best among them as your financial adviser.If you agree to pay ‘fees-only’ to an adviser, and not commission, the good news is that any commission he would have earned goes to you.Always alert on the one who offering a return of more than 15% on your investment.You should be well aware about the reason for asking compensations as well as the information on authorities where you can contact if conflicts happening.