Advisors/financial planners and intermediaries in personal finance industry have a fiduciary responsibility towards their clients. But clients too have responsibilities that make the relationship flourish and be rewarding for both the parties. Let us look at what traits would a good client have:
- Know your Expectations: The first and foremost thing is to know your own expectations. This will help you select the correct entity to deal with. You will not go to a cardiologist to ask about orthopedic problems or vice-versa. Similarly, each stakeholder in the personal finance arena has different set of strengths and has different services to offer. Though there might be an overlap amongst various entities. Look for what suits your requirements best. If you are looking for just some transactions in a financial instrument of your choice, look for an agent who deals in these instruments and offers services. If you need a detailed analysis of your finances and need a roadmap to reach your goals, look for a financial planner who can look at the big picture and guide you accordingly. A planner can offer you advice and servicing for various financial instruments, but an agent who is solely into distribution will probably not be able to guide you on a financial plan. Here it also helps to know what you don’t know. Then, these gaps can be filled by hiring the services of a person who knows these things. If you have complex taxation needs, then you need to engage a tax expert. Mismatch in expectations and deliverables of the advisor/intermediary can lead to dissonance and not yield any results for the client.
- Time issue: Time is a perishable resource, respect your own and your advisor/planners time.Be clear on how much time you can spare to deal with an intermediary. Simple transactions take minimum time. But a detailed plan will demand more of your time. Please do not engage a planner if you do not have sufficient time to discuss your details. Once you engage an advisor/planner, allow a reasonable amount of time to complete your work. Keep your appointments and do not make too many unscheduled demands on the time of you advisor/planner.
- Compensation: Be ready to compensate fairly. Expertise can be availed of only by suitable remuneration. Do not expect free advice. If you pay peanuts, you will get monkeys. Agree on a fair remuneration and then keep your payment schedules.
- Integrity: If you are dealing with a planner/advisor, be honest about your financial details. ‘Execution only’ relationships will not require you to share your other financial details. A planner can give you a viable plan only if you provide correct details. It is equally important to discuss your concerns with your planner, so he/she can optimize the advice given to you accordingly. Give complete information. As far as possible give all the information at one time during the data gathering meeting. This will save time and reduce the need for unnecessary communication on both sides.
- Acknowledge communications sent to you as and when required. Advisory/planning is a two way street. Open communication channels and timely response is essential to keep things going.
- Do your homework: Try to keep your documents up to date. It will smoothen out the process of advisory/planning by having the most current data.
- Be Aware: Try to be aware of things. Though understanding personal finance may in all likelihood not be your strength, try to get financially literate. You will feel more in control of your own finances, if you are aware.
- Do not keep on second guessing your advisor/planner’s recommendations. You have engaged their services because you feel they will do a good job of advising you. If you do not wish to heed to any of their recommendations, it is no use hiring them in the first place. In such situations, it is better to hire the services of an entity which can process the transactions you wish to do and keep you updated on the same.
- Seek an ongoing relationship. It will help you be comfortable in your financial life.
- Stick to your plans: Once you have a plan in place, stick to it. Do not try to jump the boat at the slightest hint of hard times. Have reviews as per schedule to help you deal with your concerns about any need to change.