If the world of investment looks overwhelming and you are looking for professional assistance; but wondering how to choose one, don’t worry -- you are not alone! It is very difficult to choose a planner today; due to the plethora of options of investments and due to the number of “planners/ advisors” in the industry. Here we try to simplify this process by asking some right questions:
Qualifications are very important when it comes to managing money. It means the person you are trusting with your hard earned savings, is qualified to manage money and make it work for you. Expertise is essential when managing money. Try and ask questions about various asset classes to the planner to see his comfort level with different assets. After all, you will need diversification. The planner should be updated with latest happenings in the world and how it may impact your investments.
· What is your background?
Ask for the planner’s background- is he just trying his hand in various industries or is he stable and has been in the business of managing money for long. Check for the company’s credentials as well.
· What kind of back office support do you have? How many clients do you interact with?
What is the kind of software used, how many clients does your Relationship Manager/ Planner interact with - this determines how much of the planner’s time is spent on analysis of your investments and on your relationship. Is he is going to be available for you or will he be too busy for you? The initial period of hand holding takes time and then as the relationship progresses, the time spent will gradually reduce bringing it to a mutually accepted level in about a year’s time.
· What is the employee turnover ratio? What is the qualification of the staff in the company?
A company that pays attention to clients, also pays attention to employees. If people are leaving the company too soon or if too many people are leaving the company- something is wrong. The staff in the company including the back end staff whom you may never meet - is also responsible for your investments. Are they qualified to do their work? If not, your investments may suffer - directly or indirectly.
· What level of service should I expect?
It is good to set expectations right in the beginning of the relationship. Ask him clearly what to expect - how many phone calls in a month, how many meetings in a quarter, frequency of reports, what happens in case of extra ordinary events etc.
· How does your company make money?
The planner is in the business to make money as well. How does he do it? Is it a profitable business, does he spend on infrastructure, software etc. This will determine how your service can be improved in the future.
· What is the type of existing clientele?
If all existing clients are millionaires and you are going to be their only “small” client, you will not get enough attention. The profile of the clientele should be like yours, so that you are treated with equal importance.
· Give me a couple of references whom I can speak to about you?
Take at least 2 references of people who are similar in profile to yours and are existing clients of the company/ planner and speak to them about their experience with the planner.