The financial advisor is responsible for managing your investments and financial products. It is therefore important to assess what could be the quality of his work before recruiting him. To do this, I recommend that you take the time to prepare well for the job interview, especially the technical questions to ask. You will obviously have to inform yourself at least about the possible answers in certain cases.
It is essential to inform yourself about the method of calculating the salary of the professional, whether he exercises in a private practice, with the bank or insurance or as a consultant. This gives you the opportunity to assess his integrity and thus the value of any financial advice he might provide to you.
Generally, employees of the bank or insurance company do not receive any commission when you subscribe to an offer. Sometimes, however, they receive a bonus by selling a particular service within the institution during a given period, for example. In this case, they could try to convince you to take a product that does not suit you.
The consultant, on the other hand, often sets his fees based on the value of your money or your assets. Let’s say for example that you have invested €200,000 and that he requires 0.5% of the sum. The first year, he therefore receives a remuneration of €1,000. If the investment generated a return of 20%, then you have €240,000. The professional will therefore receive a salary of €1,200 the following year. The method of calculation is the same in the event of loss. In addition, it also happens that he determines a fixed rate for each advice or file.
A good financial adviser must have in-depth knowledge in the financial, tax and legal fields. It is also important that he is informed about the news of the sector and that he has a good capacity for analysis and deduction. Hesitations, inaccurate answers or “I have no opinion” on the following essential questions should make you doubt its ability to ensure the proper management of your assets.
You can also ask him questions about a particular tax or even bank loans. You can even offer him absurd and legally punishable ideas to assess his integrity and skills. Finally, you must assess his knowledge of finance by asking him to explain the difference between an Investment Grad and a High Yield, for example.
The value of financial advice depends on the skills, knowledge and integrity of the professional providing it. A high-level diploma is not always a sign of ability, so it is essential to ask the right questions during the job interview. However, I remind you that you must also inform yourself about the possible answers or surround yourself with people who have knowledge in the field.