Though I strongly believe that you should do your financial planning yourself but in case you decide to use the services of a financial planner, you need to be vigilant. When you approach a financial planner for financial planning, you have to answer so many questions related to your own financials. The financial planner prepares the financial plan based on the information provided by you. However, before you answer questions raised by the financial planner, you should ask some questions to the financial planner in order to access his capabilities, which are as follows:
1) Do you have your own financial plan ready and how do you review it?
This will help you in understanding how practical the financial planner in his approach to financial planning. It is easy to make financial plan for others, difficult to make it for oneself.
2) How do you think inflation will impact my financial plan and what is your opinion on trends in inflation?
This will bring a critical aspect of assumption in financial planning. The success of a financial plan depends on how good it is in handling impact of inflation.
3) Do you yourself sell financial products?
If a financial planner sells financial products, he will mis-sell some products to you in the course of financial planning. Avoid such planners
4) How qualified is the financial planner?
A new breed of financial planners have emerged, who are know as CFPs( Certified Financial Planner). In context of Indian market, they have very little knowledge of financial products and should be avoided. Prefer a financial planner who is CA, CFA or MBA from reputed institutes. Additionally if he is a CFP, it is fine.
5) What is the experience of financial planner?
Though there is no harm in going to a qualified financial planner, it makes sense to have a financial planner who has experience and has worked in the industry
6) What is the opinion of financial planner on the conventional financial products?
Answer to this question will show his approach for financial products and how balanced is he in his approach. Please remember that aversion to traditional financial product shows that the planner is having risk taker approach and it may not be suitable for you
7) How much is the fee charged by the planner?
Answer to this question will give you whether you will get value for your money or not
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