Today we would like to list the most important skill sets that financial planners should have to be trusted with critical decisions about clients’ investments.
To begin with, we’re assuming that the preliminaries educational and experiential financial planning qualifications of the potential financial planners have been met before getting to this stage.
- Listens: giving financial advise is a huge responsibility and the nature of it depends to a huge extent on the context of the client: for example, two 30-year-olds with college degrees and high-paying jobs might have wildly differing relationships with money depending on their background. An adviser can only build that context by asking questions and listening. If the adviser is talking more than listening and starts listing some “sure-shot” products in the first 10 minutes of your conversation, they’re not to be trusted with critical decisions about any investment.
- Has a system (and sticks to it): Capital markets are extremely complex and inter-connected. Therefore, to isolate a purely causal relationship between an adviser’s skill and results is nearly impossible. Are the 65% returns they got over the past year the result of brilliant stock-picking or just pure luck that will revert as soon as you sign with them? You can’t tell this for sure. But you can ask them for their investment philosophy. Do they have a consistent view of what gets returns that they can articulate without falling into finance-jargon? Also, do they stick with it or do they move to the flavour of the month when it comes to his investment ideas? If they don’t believe in any philosophy to be consistent, then it’s not that different than a game of roulette on whether he delivers target returns or not.
- Has a track record (that includes down years): While all the valuation techniques can be learnt in a short time, only living through actual markets over a period of time can imply any level of understanding. More importantly, an exposure to market corrections should be a required criteria to pick an adviser since it means they survived in the industry and also to see how they reacted to it and therefore what results they showed in the rough times. If they advised all their clients to “sell everything and move to gold” in December 2008 (when the market was at historic low levels), then they are probably not the ones you want advising you about wealth-building.
If you think you tick all the three boxes and can be taken into a serious consideration as financial planners, find amongst the newest financial jobs the most suitable for your skill sets and apply now!
