Finding the right person or company to use as a financial consultant is crucial as good financial advice is a hugely important asset for any business, whether it is a small start-up or a Fortune 500 company.
With that being said, every company has varied needs and their reasons for choosing a particular financial advisor might be the very reason why another company chose not to employ the services of that same person/company.
Your decision will depend upon your circumstances; some things to consider include what pricing structure your company uses, how much you would be willing to pay an adviser, the types of clients you might typically work with and the code of ethics that an adviser adheres to, etc.
Choosing a good financial advisor is like choosing a good life coach: with so many things to keep in mind, let us take a look at the most important criteria in this crucial business decision.
Experience and Qualifications
The first thing to look for is to make sure your advisor is a certified financial planner (CFP). These are people that are licensed and regulated, and are required to take classes on varied aspects of financial planning. Beyond this, you will want to ask about their past experience, how it relates to their practice, and what other up-to-date credentials your planner might have.
It is also very important to understand how they stay abreast of current trends and practices in the industry. This part is not unlike the standard practice of interviewing a potential employee to gauge their credibility to perform a role based on past experience and credentialing.
The Right Fit
There are countless services on offer from CFPs. If you need tax consulting services, then it makes sense to find an advisor who specializes in that area and not, in say, building a comprehensive retirement plan for your team of one hundred employees. You want to find a good fit for your needs based on the type of services your company offers, your approach to either conservative or aggressive financial planning and based on the types of clients you typically work with.
Understand that some financial planning firms offer a team of people to work with, while other companies make sure to have planners working directly with clients. Knowing the structure of how you will engage with your financial advisor is important, including who will work with you personally.
Find out if the planner works with others outside their profession, including tax specialists, lawyers, or insurance agents. Find out about the backgrounds of the people you might be working with indirectly, in addition to the CFPs who will be at the front and centre in your consulting.
Conflicts of Interest
In writing, request a list of other business relationships your financial planner might have that could influence the kind of financial advice you are receiving. For instance, if a CFP sells stock options, securities, or mutual funds, think about what pecuniary ties your advisor might have with companies or people that sell those particular types of financial products?
This is part of a larger question of ascertaining how strictly your CFP adheres to ethical principles in their practice and making sure they have a clean record of disciplinary history as determined by the Financial Industry Regulatory Authority.
Choosing a financial planner for your business or personal needs does not have to be a stressful process that puts a strain on your efforts and maybe your wallet too. Taking the above advice into consideration in your search for a financial advisor might just be the key to you finding a company/individual that will provide you with the professionalism and competence that you’re looking for.