Financial Advisors - How Do You Know If You Are Getting Good Advice?

More and more people are now clamouring aboard the former trails emblazoned by the seasoned investors. Money advice, tips and strategies abound. Get rich. Save for your retirement. Make a million to retire on. Pay off your home in only 5 or 8 years. Financial freedom. Live your own lifestyle. Buy a boat and sail the Pacific. Fantasies come true.

We all know by now that everyone should become investors. Robert Kiyosaki, John Burley, Ric Edelman and Paul Clitheroe are household names due to the plethora of financial expertise now required to fill the magazine sections of printed and electronic media.
But where do you start and what is stopping you from taking the first step?

For the first-timers, I would say it is probably fear. Fear of the unknown. Fear of risking all your worldly goods and chattels. Fear of recurring bear markets and declining assets. Fear of trusting your own limited financial knowledge. And probably more commonly, fear of putting your money into some stranger's care. The most common question I am asked is: how do I find a good financial adviser?

How do you know if you are getting good advice from your Financial Planner? Here are a few tips:

1. A good planner will take the time to find out about YOU first. Always ensure that he or she starts with defining your risk profile, your financial and lifestyle goals and calculates an investment mix portfolio FIRST before they begin to recommend any products.

2. The right planner for you should be one YOU feel comfortable with. Shop around if necessary. Ask for referrals. Interview them - instead of the other way around.

3. Ask whether they have any affiliations with the investments they are recommending. Ask them about their fee structures. Do they receive commissions? And if so who?

4. Ask about their investment methods? Is your money readily available to you at any time (it should be) or are there any restrictions?

5. Look for someone who is a true professional. Look at their offices, their staff, the receptionist. An honest professional would never disparage others in their field.

6. Do not sign any contracts for at least 30 days. Never give them any authority over your funds. You should always be in control.

7. Do you understand what they tell you? A good planner will talk to you at your level of financial understanding - or be willing to interpret anything you don't understand without making you feel like an idiot.

All of this should be done BEFORE you start investing. Never be afraid to walk away from someone who you don't trust. Also, you should keep abreast of financial matters as much as you can.

Personal investor magazines are good, practical magazines that are easy to understand and keep the reader well-informed. If, on the other hand, you have large amounts to invest, you can try a stock-broking firm. Choose a well-established, reputable firm in your capital city and speak to them, using the same rules as described above.