Questions to ask your financial advisor

In my previous post I talked about being alert despite using the services of a financial advisor. I feel that there are certain questions to be put forward to any financial advisor to know what he/she is worth of. Although you might find it embarrasing to ask these questions, but keep in mind that what you are doing is entrusting your hard-earned money to him and as with any service you should be fully satisfied before you use it. In India people from banks and distribution houses, insurance agents, mutual fund distributors and chartered accountants etc all call themselves wealth manager or a financial advisor which makes it totally confusing.

In a purely technical sense certified financial planners (CFPs) are those who have been certified by the Financial Planning Standards Board (FPSB), India. But even if the concerend person is not a CFP, make sure that he understands your financial goals and uses the financial planning process to help you figure out how to meet your life goals through the proper management of your financial resources.

What you should look out for in a good financial advisor is :

-- His qualification
-- His experience
-- Does he provides any value-added services and covers an entire range of financial planning
products including equity investment, debt, commodities, art, insurance, international investment,
which home loans to take and why, tax planning, estate planning, filing tax returns,
superannuation, real estate, and do a cash-flow analysis.
-- Does he understands your goals or he pushes his own products
-- What are the charges he puts on any product. what is his cut? This will give you an idea of
whether he is pushing a product just to make a higher cut.
-- Diversification is the key for proper financial planning, what is his financial planning philosophy
-- Does he provide any references of other people subscribing to his services
-- What about the exit route in case you want to discontinue his services

A satisfactory answer to each and every question above should be obtained before you trust him with all your moolah !!


  1. Well Ketan,
    Is it better to entrust all your savings to a financial planner rather than investing in mutual funds, soem shares and having a few bank deposits by oneself.
    How costly are these planners?
    Arent they just like an informed investor?
    Just like the mutual funds invest our money in shares doest a financial planner act as a middle man?
    These are some of the doubts i have.

  2. Alex, I never say entrust all your money to the financial planners.. the best is obviously to manage your own money... but with the plethora of schemes and investment options it really needs a focussed effort to understand and sift throught dozens of documents/websites/company profiles etc etc ... so just that in case someone doenst feel to go through tthis ordeal and feels more confident in handing over the money to the advisor... my point was to just choose the advisor cautiously... BTW with so many MFs and NFOs coming up... its not easy to invest in them... also wont you need to perform a lot of study to buy shares...

  3. What how many millions are you hoarding to have CFPs and CFAs to manage your money? Man, you can count them by heads in India.

    Those pros who usually carry PMS services also don't hold valid CFP.

    Flagging you, good looking and young babes are out to lure you, you know at those times, it's not your little brain that works.

  4. Ofcouse there may not be more than 100 CFPs... but the point i mentioned is about who would be technically qualified for managing your finances... its like servicing your bike.. technically you should go to authorised service provider.. but apart from that there are scores of road-side people who claim to service your bike (cheaper too)... but unless you know and ask pointed questions while servicing... you wouldnt trust the guy.. its the same case....

    About good babes... well well... thats marketing aint it? if you think from below the belt.... god knows wheres your life is heading ;-)

  5. As rightly said:
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