Importance of An Independent Financial Advisor
The world of investments is rewarding but complex. To find your way and make the right decisions as an investor, you need to have extensive financial knowledge or assistance from a financial advisor. An independent financial advisor ensures that you are in the right direction with your investments and can achieve your set financial goals.
Who Is An Independent Financial Advisor?
These professionals can either be a person or a firm. They are financial experts and provide assistance, make recommendations, prepare reports by analysing your investments, and charge a fee for the services. Such an advisor can not only help you with investment assistance but also ensure your transactions are successfully completed. Hence, the importance of a financial advisor is immense for investors.
Why Do You Need An Independent Advisor?
With an understanding of the independent financial advisor definition, here are the key reasons why you should seek help from an advisor and why investors swear by the importance of independent financial advisors:
Financial matters are complex, intricate, and sometimes hard to comprehend.
Without adequate expertise, it is difficult to ascertain which investment instrument suits your goals.
Financial matters are interlinked and not independent of each other. If you move money from one investment to the other, it affects both investments and possibly more.
Financial products often have hidden costs which you may not know about.
There are a lot of terms and conditions involved in financial products,
You might not be acquainted enough with market trends that are important for any financial decision.
Importance Of Registered Independent Advisors
Importance of registered investment advisors: Registered investment advisors can help clients in making better investment decisions. They can invest the portfolio of their clients in a better way. They understand better the characteristics of different investment instruments. They understand the risk and return characteristics of different investment options. They also factor in the risk tolerance of the client while recommending an investment option for the client. They follow a systematic approach while taking investment decisions for a client.
Here is how such advisors can add value to your financial life.
Expertise:
No matter the complexity of your financial needs and goals, an advisor can help you with a customised game plan that covers the big picture while also focusing on the details. Some financial advisors even focus on specific investment strategies, while some offer comprehensive services. They can help you with everything from investment assistance to estate plans, tax savings, charitable donations, inheritance, and securities.Financial Goals:
You have financial goals of your own, which the advisor will help you plan for and achieve. But the essential goal of such a financial advisor is to set your finances in order. Once they do that, you might even form newer and higher goals and set out to pursue them with the assurance of credible financial guidance to back you up.Accountability:
In order to serve you better, such financial advisors often try to create a personal bond. This also helps them understand your needs and life goals better. Since they are entrepreneurial and dedicated to the betterment of your portfolio, their level of accountability is high.Transparency:
Generally, independent financial advisors work on a fee-based pricing model. It is simple, it is transparent, and it helps in the growth of your assets. With this model, you can be assured that their business does well when you do well. Hence, there is transparency between the two parties with regard to money and services.Convenience:
Once you hire such a financial advisor, you don’t need to manage your own portfolio. Their investment guidance will put you in auto-transact mode, wherein you just follow their recommendations and take action. The same goes for other financial matters as well. This would save you a lot of time, energy, and effort.
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Conclusion
It is thus clear that the role of an advisor goes beyond just financial help; it is to keep you financially healthy on an overall basis. So, if you’re planning to embark upon newer, bigger financial goals, you can find your independent advisor and hire an independent advisor online. You can also consider going to reputed and trustworthy firms such as IIFL or their sub-brokers.
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Ans: The individual is an expert in the financial field and provides investment-related assistance to their clients in return for a fee.
Ans: You can join IIFL’s partner program which is the fastest-growing business model in the financial sector, to become an advisor for finance with IIFL.
Ans: These entities/individuals can become a financial partners with IIFL:
Millennials & Centennials
Existing IFAs
Professionals
Homemakers
The rates for an independent advisor entirely depend on numerous factors, including the total number of assets involved, the length of time needed, and the advice you need. If the independent financial advisor is also managing your assets, besides broviding advice, then the fee may range between 0.5% to 2% of the assets under management.
Yes, having an independent financial advisor can be beneficial. The reason is they offer unbiased advice tailored to every client’s specific financial goals and circumstances, unlike advisors affiliated with financial institutions who may have incentives to promote certain products or services.
Furthermore, independent advisors can provide a wider range of options from various providers, ensuring you receive the best possible recommendations for your needs. Additionally, they often offer personalized attention and ongoing support, helping you navigate complex financial decisions and achieve your long-term objectives with greater confidence and peace of mind.
The cost of a personal financial advisor in India can vary. Typically, financial advisors charge a percentage of the assets under management (AUM), ranging from around 0.5% to 2% annually. For example, if you have assets worth ₹1,00,00,000, the annual fee could be between ₹50,000 to ₹2,00,000.
Alternatively, they may charge an hourly rate, which can range from ₹5,000 to ₹20,000 or more per hour. Some advisors may also charge a flat fee for specific services, such as financial planning or retirement planning, ranging from ₹10,000 to ₹50,000 or higher, depending on the complexity of the service. Overall, costs can vary widely based on the advisor’s experience and the scope of services provided.
