Selecting a Financial Consultant - Debunking the Myth

In your time and efforts to manage your money and plan for financial security, are you sometimes persuaded to get a product or engage a consultant's services on the basis of claims such as:

"This can be a best financial product in the complete industry."
"We are the very best financial services company."
"I am the very best Financial Consultant in the business."

Such statements aren't uncommon in the financial services industry, so how can you decide who to trust or which financial institution to place your organization with? You will end up grappling with this particular issue once you graduate and start planning your finances or simply nonetheless as you take stock of one's retirement pans.

Let us look at these common statements to acquire a clearer picture of what is truth or myth:

1. "IT IS THE BEST FINANCIAL PRODUCT AVAILABLE IN THE MARKET"

There is absolutely no one-size-fits-all product on the market. What is suitable for one person may be unsuitable for another. A specialist Financial Consultant should gather information about your financial needs and status prior to making any recommendation. You would expect your physician to prescribe medication only after he's got made an analysis, so have exactly the same expectations of your financial consultant.

Ask your consultant: "On which basis is this recommendation suitable for me?"

2. "THE MORE AWARDS THE BETTER"

Awards do give an indication on a Financial Consultant's performance. However, do keep in mind that awards are mainly measured by sales performance. Just as  dual pricing merchant services  that sells probably the most burgers might not have the best cooks, a Financial Consultant who has achieved a high sales performance might not necessarily be the the most suitable person for you.

Ask your consultant: "How did you qualify for the awards?"

3. "WE ARE THE VERY BEST  Additional reading  and branding matter but the key question is just how much emphasis you should place on them. Different financial services companies claim to be the best, so that is really the best? Well, they could all function as best and that depends on the basis of one's measurement, for example, home based business sales or assets under management. As being a hospital that has probably the most number of patients will not mean the doctor that you are seeing is a good.

Ask your consultant: "Best in what area?"

4. "WE ARE ABLE TO SOURCE FOR YOU THE BEST PRODUCT FROM DIFFERENT COMPANIES"

That would be possible only when a Financial Consultant can have access to all financial loans from all finance institutions and the financial products can be easily in comparison to one another. Unfortunately, like the theory of perfect competition in Economics, this may prove elusive in real life. Major financial services companies still use their own pool of Financial Consultants as the only distribution channel for most of their products. In addition, competing financial products will often have different pros and cons. Make sure the financial product recommended is the better suited for you and not the one that is most beneficial for the Financial Consultant with regard to remuneration.

Ask your consultant: "How are you remunerated for the various options listed in your recommendations?"

When you run into these statements, be sure to ask the consultant to back them up. A good financial consultant will assist you to make investment decisions which are appropriate for your needs, and these change in accordance with what stage you will ever have you are at.