The Top 5 Mistakes to Avoid When Selecting a Financial Planner

A financial planner is much more than just a money manager. Your financial planner can guide you through your finances, help you improve on them and make better financial choices.

Trusting someone to make the right choices for you isn’t easy. And it shouldn’t be. Go for only the right financial planner who can understand your finances and goals to create the best plan for you.

While there are so many things you can do to find the right planner, there are also some mistakes you should avoid when selecting a financial planner.

Also Read: Banking for Gen Z: How the Young Generation is Reshaping Finance

Here are the top 5 mistakes you should avoid when choosing your financial planner.

Mistake #1: Not doing proper research

There are several things you need to consider when selecting a financial planner. While you may have your checklist, there are some areas he must have expertise in to help with your finances. Check out the credentials of the planners you’re shortlisting, interview them and maybe even their clients to understand how they can help you. Your communication and comprehension must be clear with your financial planner. You can figure out how well the planner understands your goals when you interview them and choose the best one for you.

Mistake #2. Hiring a Financial Planner based solely on referral

Many people tend to and trust recommendations and referrals.

Your financial situation and goals may differ from others, and choosing a planner based on their referral may not be the best choice for you. Even if you are meeting a Financial Planner your friends or family referred to, make sure you interview them thoroughly to understand if they can help you achieve your specific financial goals.

Mistake #3. Only considering past performances of the planner

Reviewing the experience of the financial planner is helpful. But you cannot make your decision entirely on their past performances. Past performances are not a guarantee of success in the future. The financial planner needs to create plans unique to your conditions and modify them as your financial situation changes.

Mistake #4. Trusting only words and promises

Hiring a financial planner who is trustworthy and understands you is the goal. But that doesn’t mean you should fall for words or promises. Choose a planner who understands your financial goals and makes a realistic plan. Your financial planner should openly tell you if you are at any financial risk and make plans to avoid or minimize the situation. Choose a financial planner who considers your long-term financial goals and makes the best decisions to keep them on track.

Mistake #5. Making an emotional decision

Choosing the right financial planner is an important decision, not to be made emotionally. Do not select a person just because you are related to them. Make this critical decision keeping your current finances and financial goals in mind.

Author - Vaishnavi K V

She is an exceptionally self-motivated person with more than 3 years of expertise in producing news stories, blogs, and content marketing pieces. She uses strong language and an accurate and flexible writing style. She is passionate about learning new subjects, has a talent for creating original material, and has the ability to produce polished and appealing writing for diverse clients.