I am not getting into the legal part of who is a financial planner, who is a mutual fund distributor, etc. I am assuming that you have an individual who is helping you invest in direct shares or mutual funds or a combination of financial and real assets and you need to know what to ask him.
Here is an attempt to give you some direction….
- Why are you in this business – seriously this is a good one for a start!
- How long will you be in this business and what are your BCP – business continuity plans?
- If you drop dead what happens to my portfolio?
- Is my risk profile similar to your other clients?
- Is my risk profile similar to yours?
- Will your portfolio look somewhat like mine after we finish investing?
- Have you had any brush with any regulatory authority?
- Do you deal in all asset classes or are you restricted?
- Do you deal in shares or mutual funds – and do you favor one over the other?
- Do you use Technical analysis for shares? (beware a Yes means he is a trader, not an investor)
- Do you advise on taxes, wills, retirement planning, budgeting, borrowing, health and life insurance?
- What in your past – education or experience makes you competent to be in this business?
- What proof can you show that you have achieved success for your clients?
- Can I talk to some of your clients?
- Do you consider yourself financially successful?
- What returns do your clients get on their portfolio – give me high, low, mean, median and mode.
- What returns do you think my portfolio will give?
- What books on investment will you recommend?
- How will I compensate you?
- If there is a conflict of interest will you tell me and find a way to sort it out?
Just indicative…..there could be more…
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