The Top Five Things You Should Be Asking Your New Financial Advisor and Why

Ia highly uncertain, fast moving and ever-changing world, ensuring you have the right partner to guide you on your retirement and financial planning journey is more important than ever. A financial advisowho has the ability and means to show you all available options, works for a highly regulated and credible company and communicates through both good times and bad are some of the necessary considerations before choosing an advisor. 

Bearing that in mind, what are the five key questions you should be asking your potential new financial advisor right now?  

Before getting into these questions, perhaps the first question should be: Do you need a financial advisor at all?  

If you have the time, ability and inclination to constantly monitor the markets, have access to the best analysts and economic brains, can boast decades of financial market experience, have learned important lessons from past financial crises and if you are confident, you won’t make hasty and panicked decisions – then you probably could go it alone. But that is just one aspect of a financial plan being the underlying investments. What about life cover and a Will which are the foundations of a good plan, tax efficiency, retirement planning and estate planning to ensure your family are provided for when you are gone? 

If not, you need an expert in your corner who will give you the best chance of preserving and growing your wealth, especially as the need for detailed planning is considerably compounded when you add the complexity of investing offshore. 

Based on the experiences of Carrick’s Private Wealth Managers, who understand the concerns of our clients, we believe the following are essential questions you should be asking right now, particularly in light of the current global environment… and why: 

  1. Are you an independent financial advisor, able to bring all solutions to the table without any conflicts of interest? This is critical to ensure you are seeing investment ideas from the full spectrum of local and international markets.  
  2. Do you and your company have the necessary experience, personnel and processes in place to really understand my needs and to plan accordingly? You need someone who has applied their mind thoughtfully and diligently to your circumstances and needs and not an advisor that is product dumping for a quick sale.  
  3. How do you manage money? An advisor should be able to clearly explain their investment process and methodology as well as the investment partners they use. Most financial advisors don’t have the necessary experience which ends up being to the detriment of their client’s. You need someone that is proactive, monitors the markets on a daily basis and can take advantage of opportunities as and when they present themselves. Ask to see past performance as well as detail on how risk is managed. 
  4. Explain how you meet all regulatory requirements and fiduciary standards?It is vital that your prospective advisor and advisory firm are correctly qualified, licenced and can legally operate in the jurisdiction where you live, as well as in those jurisdictions where you may wish to invest – or potentially relocate to at some point. As an African investor, that means ensuring that offshore requirements and local regulations are scrupulously upheld. The advisor and firm must also disclose what services and products they can provide, as well as any limitations on the services or products they offer to clients. As part of this process, it’s also prudent to ask about the advisor’s qualifications.  
  5. Explain your fee structure.As with any good business decision, you must be able to weigh up the likely cost versus potential return.  

Depending on your personal circumstances, there may be other questions you’d like to ask. But these, we believe, are important grounding questions for 2021.  

If you wish to consider entrusting Carrick with your financial future, be sure to put us to the test. 

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