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How to choose a financial consultant

How to choose a financial consultant

Managing finances is a very important part of your life. It helps you grow money and achieve financial independence. Unlike before, when there were very few investment options for you to choose from, there are various investment options like gold, plots, bonds, equities, and many more investment options today.

By managing your finances, you not only maintain your regular expenses but also plan your insurance needs, retirement plans, etc. However, most people neglect their finances either because they don’t have the necessary time or don’t know enough about it. 

This is where a financial consultant comes in. A financial consultant can offer you various financial services based on your specific needs and goals.

Who is a financial consultant?

A financial consultant is someone who plans your finances, identifies prospective investments, and guides your insurance decisions. They offer personalized financial advice to help you grow wealth. 

Financial consultants are certified and offer financial advice to big businesses, governmental organizations, and private clients. A financial consultant’s job is to offer an unbiased assessment of a proposed business plan or decision.

Why are financial consultants necessary?

Every dream and goal needs a carefully crafted plan to be achieved. Financial consultants make it easier for clients to achieve their financial goals. A financial consultant is well-versed in almost all areas of finance, such as taxation, allocation of taxes, budgeting, forecasting, etc.

Hence, they may be able to provide their clients with a range of services, such as cash flow management, education planning, tax and insurance planning, investment and retirement planning, risk management, etc. these services would be highly beneficial for businesses or people who want to manage their finances. 

What is the role of a financial consultant?

Financial consultants offer their clients a detailed analysis of their finances. They break down every aspect of the client’s finances, including income, expenses, and assets, and help them create a financial plan that will aid them in achieving their goals. 

Each financial consultant specializes in offering different types of financial services. The table below gives you the four types of financial consultants and the services they provide. 

Title  Services 
Chartered Financial Consultant (ChFc) Financial planning, investing, tax planning, estate planning, retirement planning
Certified Public Accountant (CPA) Tax planning, bookkeeping, audit and assurance services, business management, forensic accounting
Personal Finance Specialist (PFS) Financial planning, estate planning, retirement planning wealth management, investing, insurance
Chartered Life Underwriter (CLU) Life insurance, annuities, risk management

How to choose a financial consultant?:

A Personal financial consultant is someone who manages your finances. So it is important to choose a trustworthy and reliable person to do the job. Here are some tips you can follow while choosing your financial consultant.

  • Check the credentials:

Before deciding on a financial consultant, you should know whether he has sufficient knowledge on the subject. To do that, you should check if the financial consultant has the required credentials and qualifications. 

  • Your financial consultant should be a registered SEBI (Securities Exchange Board of India) investment advisor.
  • Your financial consultant should have been offered the Certified Financial Planning (CFP) certification by the Financial Planning Standards Boards. This certificate is not mandatory as any financial professional or someone from relevant professions can be financial consultant.
  • Look for experience:

When you choose a financial consultant, look for someone who has seen through a few market cycles and know how different asset classes behaved during those cycles. Such experience can be beneficial for your financial planning.

The role of a financial consultant is multi-faceted. They should be able to understand the macro economics, manage your money by assessing the risks and pay attention to the market’s future growth. So choosing a financial consultant with experience handling all these will be the best choice for you. 

  • Check the fee structure:

Financial consultancy does not come for free. Financial consultants can charge up to an average of Rs. 10,000 to Rs. 50,000 annually. If a financial consultant is not charging you any fee, that means he or she would be relying on commissions and may not give you unbiased financial advice.

Depending on the assets they are managing, some financial consultants may charge a flat fee, while others may charge a fee based on a percentage of those assets. Meet with your financial advisor and go through the fee structure.

  • Meet them in person:

It is important to have a face-to-face meeting or video conference with your financial consultant. Since your connection with your financial consultant will be an ongoing process, find out how at ease you are speaking with them. 

Consequently, it will be to your advantage if you can get along well with your consultant. Learn how frequently your financial plan will be evaluated and how frequently you may contact the consultant for any suggestions or questions.

  • Do a reference check:

Doing a reference check is important when choosing your financial consultant. Ask the financial consultant’s current clients how satisfied they are with the guidance they have received. Check to see whether the financial planner takes the time to comprehend the client’s issues and engages in meaningful conversations. 

Ask them if their financial situation has changed significantly since they started working with the financial consultant. You can also examine the public profile of the financial consultant or his business, as well as the testimonials and rankings.


It is your hard-earned money that you are going to give to the financial consultant. So select the right consultant for managing your funds. When your investments choice are wiser, the wealth journey becomes smoother.

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