When it comes to managing your money, investment, and finances while residing abroad, you need to make sure that you have a good financial advisor who will help and guide you in achieving your financial goals. However, if this is the first time that you are seeking an expat financial advice, choosing the right person for the job can be daunting. The ‘financial advisor’ is an umbrella term for a variety of specializations. This is why you have to make sure that you are making the right decision.
But how can you possibly do that?
Just like choosing a lawyer or an engineer, there are different factors that you have to take into consideration when choosing the best financial advisor. Here are the most important ones:
The Services That You Want And Need.
If you only need help in choosing and managing your investments, a robo-advisor or online financial services would work for you. This is a cost-effective choice and is the best option for those who are just starting out. However, if you have a more complicated situation, or maybe you want holistic advice on certain topics like your estate planning, retirement plans, or your insurance needs, then you need a human financial planner.
The Cost Level That Would Suit Your Situation
If you are on a limited budget, a robo-advisor is the best option for you. The annual fees would usually start at 0.25% of the assets that they manage. There are also top providers who may charge you up to 0.50%. However, you need to understand that what they can do are very limited and are only perfect for those who are just starting out. But if you have the budget and you need a more advanced approach, then you can hire a human advisor who would usually charge a median fee of 1% or higher.
Financial Advisors’ Qualifications
If you finally decided which financial advisor would work best for you, it is important that you do a little research about their education and experience. These two are essential when you are considering a human financial advisor. Do not hesitate to ask the following questions:
Is your advisor a fiduciary?
The fiduciaries think of what’s best for their clients. The nonfiduciaries on the other hand only recommend products that would be ideal for their clients even if they are not the most cost-effective. This is why it is important that you know about the ‘fiduciary rule’ and ask your potential advisor if they follow this standard.
How does your financial adviser want to get paid?
Advisors have different fee structures. If you want a hassle-free transaction, stick with fee-only advisors. This way, you only have to focus on their fee and not on the commissions that they get for selling your products. However, they may charge a percentage of the assets that they are managing for you, a flat fee, or maybe an hourly fee.
What is your advisors’ investment philosophy?
It is important that you and your financial advisor have the same investment philosophy. This will help you believe in what they can do. You should also ask who are their typical clients. Make sure that you choose an advisor who has the experience and is used to a situation like yours because he or she is the key for you to meet your financial goals.
Tips When Asking Questions
If asking questions make you nervous, just keep in mind that your questions is as important to them as it is to you. You are building a relationship with your financial advisor and it is important that you are able to ask him or her questions. You should have an open communication. You should also inform your advisor that you are interviewing others so that they too will know that you are not making an immediate decision just yet. You are paying your financial advisor to give clarity to your financial life and they should not make it more confusing for you.