The necessity of logical financial planning
can never be overrated. It is a unique strategy that gets individuals set to be
capable to attain their financial goals. Having a financial plan helps people
manage the inflow and outflow of cash and meet recurring financial obligations
while having the aim of getting financial stability after their retirement. Scott Tominaga
is an expert specializing in the area of personal financial management, wealth
management, and advisory.
He is well-known in the industry for his
dedicated financial services to the banking sector, stock trading, financial
management, etc. Currently, he is specializing in financial advisory for
individual and business entrepreneurs. He states while hiring a financial
advisor, people need to avoid five major mistakes.
Choosing
an Advisor Who is not of Fiduciary standard
As defined, a fiduciary is a professional who
is ethically and legally bound to perform his/her duty considering the best
interest of their client. They are supposed to stay away from conflicts of
interest while serving their clients. Thereby, one needs to ensure while hiring
an advisor that the professional is not a registered fiduciary since they are
likely to suggest investment instruments that they feel best option for their
clients. They are not obligated to make sure whether or not any client gets the
best return of it because they are mainly focused on their interest.
Going
for One Who Follows ‘One-Size-Fits-All’ Approach
Financial planning is such a subject, which
cannot be addressed with a ‘one-size-fits-all’ approach. Professionals must
prepare a custom strategy that needs a high level of expertise in the domain to
formulate a financial plan matching the income, expenses, spending habits, and
financial objectives of the client. This applies to business as well. The lack
of understanding of the needs and objectives of one’s financial plan could be
destructive rather than doing anything good for the individual. So, before
hiring someone, people should ensure to get a list of the professional’s
previous clients and inquire them about their satisfaction level with the
services of the expert.
Hiring
the First Financial Planner Once Met
Hiring a financial advisor is essential. But
people need to remember that impulsive decisions and hurry are the causes of
making mistakes. Considering the importance of financial planning their life,
they should spend adequate time researching well before choosing one. Apart
from getting referrals, taking the assistance of Google to shortlist a few
advisors, interviewing them, and thereby picking one makes sense.
Hiring
without Checking Credentials
This can be a big
mistake. Scott Tominaga
suggests people not get tempted simply by seeing a business card imprinted with
certain big qualifications and hire the professional on that basis. Financial
planning is a complex domain and advisors must undergo certain test procedures
and should be equipped with the necessary, licenses, credentials as well as
references. So, individuals should not hesitate to ask for those documents and
accordingly hire one who is properly certified for example, with a Certified
Financial Planner degree.
Confusing
Financial Planners with Brokers
Typically brokers focus on a specific segment
of the financial goal, for example, helping individuals in developing their
investment portfolio. On the contrary, financial planners like Scott Tominaga take care of their
client’s entire financial life comprising budgeting, insurance, tax planning,
estate planning, investment management, etc.
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