The Finance Blogger

Studies show advisers are focused on their income – commissions etc and less so on providing financial advice to their clients. Most advisers do understand that if they are going to stay in business for a long time, they need to make sure that they are perceived to have their clients best interests at heart. However in my personal experience, many are on commission and many make more money when you are doing a trade or investing additional money. Sometimes this is a good thing for your investment portfolio and sometimes you are trading for no reason and just paying fees for nothing.

How do You Make Sure You Get the Best Financial Advice?

Develop your own strategy for your investments and stick to it unless someone can provide you with factual well thought out comments that would cause you to reconsider your strategy. This may involve some work on your part, but at least you will be well informed when you do talk to your adviser and will not just accept things blindly.

Talk to several advisers and ask them the same questions to see if you get the same answers and recommendations. Make them justify their positions and explain why a specific action should be taken. If the strategies are divergent from our own or different from each other, you may want to get a third opinion. The more data you have the better your decision will be.

Steer clear of advisers who do a lot of trades. These guys are just interested in padding their own pockets. If you are chasing profits or speculative stocks and not making any money, then you know that the only one making money is your adviser.

Maintain a Balanced Portfolio

Maintain a balanced portfolio that is well diversified. You never want to be invested in one investment only. If it goes bad you have lost your entire portfolio. If you are well diversified, the losses will be much less. The same applies to advisers. If you have a decent amount spread your money so that you get those extra opinions and strategies.

Review your strategy annually or even twice annually if there is a volatile market. Update your strategy only if needed and discuss it with your spouse as well as your adviser. This is important to make sure that you do not deviate too much from your core strategy.

Adjust for the long term for your retirement pension. Some advisers are  only interested in short term gains and a lot of trades. Long term buy and hold does not make them a lot of money. But it does decrease your cost and you still collect dividends and interest depending on the investment type

Once you take all of this into account, select an adviser that is aligned with your fundamental goals and objectives.

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