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What you need to know before choosing a financial advisor

By - Peter Kamuri | November 12th 2012

By Peter Kamuri

The year is fast coming to a close. How can you describe the way you have managed your personal finances? Have you been disciplined enough to be able to consistently live within your budget? Have you been steadily on track to realise all your financial goals you had set to achieve at the beginning of the year?

Indeed, most of us want to lead a blissful financial life. We want to reconcile our credit card debts on time, pay our bills, meet our children’s educational needs and generally remain in control of our finances. However, this is not always the case as the road towards financial independence can be bumpy and riddled with uncertainties. To circumvent these pitfalls that can stand on your way towards financial success, you need the services of a financial advisor. A qualified financial advisor is equipped with skills that can help you handle a myriad of personal financial problems, ensuring that your financial life is manageable and without hassles.

Francis Makiche, a financial advisor working in a private firm in Nairobi says, “Many people underestimate the important role played by a financial advisor. Sometimes planning your personal finances in the absence of an expert is like groping in darkness. The work of an expert is to guide you when you are stuck.”


He adds, “The work of a financial advisor is to objectively guide and give you an objective perspective on your financial situation. He or she can guide you in setting realistic goals and provide advice and encouragement along the way.”

“Even the most savvy in business need the services of a financial advisor. A time will always come when they feel that professional advice is needed to avoid making investment mistakes. These are people who are knowledgeable in their field, just like teachers, lawyers or doctors, and should be consulted all the time,” says Makiche.

People who lead a successful financial life always have clear goals on what they want to achieve. Setting such goals is not easy and that is where financial advisors can come in handy. They can help you set short, mid or long term financial goals that can to your financial success.

But how can you choose the right financial advisor? Experts say one good starting point is to establish whether you need one in the first place. In addition, bear in mind that there are many different types of financial advisors and it is your responsibility to narrow down on the one you require. To get value for your money, you should be guided by your financial goals and needs.

“When choosing a financial advisor, ask yourself a few questions: What information do you have in relation to the financial path you want to follow? Have you set your goals or you do not even know where to start? Do you have previous experience in the investment area you are targeting?” says Makiche. “A good and a well versed financial advisor should be familiar with a variety of topics. He is knowledgeable in diverse areas and will advise you on the best investment opportunities that are best for you and how to set financial goals and priorities,” says Ann Mwangi, a financial expert.

When choosing an advisor, you should do your homework.

“Ask your friends, family members, workmates or even professionals in that field or others to recommend one for you. You may also look for clients served by a person you have earmarked and find out whether they are satisfied with his or her services,” advises Mwangi.

She adds, “Many people forget to evaluate the qualifications of their financial advisors and end up in the hands of quacks or back street financial brokers. Through friends and other professionals, you can dig into an advisor’s academic credentials to establish whether he is the best match for your needs. Establishing their clients’ base can help.”

Makiche “You should always go for someone who will be there for you when you need him. Any worthwhile financial advisor should be willing to spend time answering your questions and make your money grow as a result of giving prudent financial advice.” “Do not forget to consider the fee they charge. There are advisors who charge a monthly or an annual fee. Others ask for a commission every time there is a transaction and some will charge a percentage of the amount of money involved. Be careful as some can be very expensive,” Mwangi advises.

Making up your mind on whether you require a financial advisor or not is an important decision you might have to make depending on the financial path you want to follow. However, you are unlikely to go wrong if you seek services of professionals.

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