Consider Financial Planner, Not Sales agent

A financial planner is important to take care of your financial requirements, so that you will be able to invest right to realize your short and long-term goals. The financial goals in a person’s life can range from anything including saving for a holiday trip to education and marriage of your kids. And whenever you think of investment, it is important to understand the financial instruments completely and do not trust the sales agents or marketing people blindly.

Why Sales Agents Are Not Financial Planners

Following are the reasons of not considering sales agents as financial planners:

1. Advice of sales agents are biased towards products they sell as its sales give them a commission-based income. In addition, even if the sales agents are selling two or more products, the chances of selling high commission-based product are more. Hence, most often the decision is based on commission in the product, instead of consumer needs. For instance, among retirement-oriented ULIPs and NPS, the clear winner as per market data is a ULIP plan, although NPS offers better opportunity to save for retirement.

2. Many a times, it has been seen that insurance products are being mis-sell as insurance agents do not provide complete information to consumers, in the lure of selling it. For instance, while selling ULIPs, few insurance agents tell customers that it is mandatory to invest for minimum five years but never tell that to get stated growth; they are supposed to continue the plan for the complete term.

3. Also, it is likely that insurance agents do not make customers understand the working of market-linked products, especially the risk part.

4. A true market comparison is difficult to get from sales agents as their decisions are biased towards products they are selling. It may also be because of the fact that most of the agents are aware of the universe of the product and concentrate on their product only.

5. In addition, it is likely that customers are unaware of the hidden charges of the product, they are planning to buy. Under this, many financial products levy transaction charges for each payment and withdrawal transactions, but are not disclosed in brochure. Other

6. If the company is weak in providing services or any other operational issues, the same information is not likely to be disclosed by sales agent of the companies.

Why Do You Need Financial Planner?

In case you have any of the following questions troubling you, the need of a financial planner is there to help and guide you to make informed decision:

• Are my investments beating inflation?
• Do I have enough for retirement? When can I retire? From when should I start investing?
• How can I protect my assets? How can I achieve my financial goals?
• Where and how to invest in a fluctuating market scenario? How risky is the stock market at any given point of time? How to minimize investment risk?

In addition, if you are frustrated by misleading advices and want to analyze your financial position as a whole, it is time you hire a financial planner.

How To Choose Financial Planner?

1. Qualification: Look for a financial advisor with correct qualification of becoming one. Usually, ‘Certified Financial Planner’ (CFP) is the required qualification to be able to manage an individual’s finances. An advantage here is that ‘CFP’ credential can be used only by individuals with at least 3 years of relevant work experience; hence, only experienced people will be dealing with your finances.

2. Experience: It is also important to look at the past experience and track record of planner, before hiring one. With the past experience, you will be able to judge how well the person will be able to understand your situation uniquely and build a customized plan for you.

3. Reference: Ask your planner for two references for the credential check of the person, so that he/ she will not be able to fool you with false testimonials and designations attached to him, if any. Ask about his past performance and judge about his abilities from previous clients’ feedback.

4. Market research: The research is important to find out the best person to manage your finances. Hence, it is important that you will not depend too much on your peers’ knowledge. Compare the candidates and zero-in on the best person, after judging them on the above mentioned criteria.

5. Payment Structure: Once you have zeroed in on a planner, it is important to look at the payment structure. Here, it is important to make sure that the planner is fee-based and do not earn commission from any particular company for recommending their products.

6. Services offered: Learn more about the services offered by the planner. For example, some planners also facilitate opening accounts such as PPF etc. along with handling them; whereas other only recommend the suitable products. In case you have hectic work schedule, look for advisors with additional services.

So, hire a good planner, suiting your financial needs and live the life free from financial tensions.