Identify why you think you need a financial planner. Perhaps you’re going through a transition—say, you have a new baby or you’re recently divorced. Maybe you need to update your retirement plan or get a reality check on saving for college. Do you require frequent contact with your adviser, or are you okay with annual updates? What is your tolerance for risk?
If you’re looking for broad-based advice about various aspects of your financial life, hire a registered financial planner, or RFP. These professionals must pass an extensive, ten-hour exam and meet other education and ethics requirements to gain the credential. A registered investment adviser, or RIA, is registered with the Securities and Exchange Commission can manage your investment portfolio. A chartered financial consultant (ChFC) specializes in insurance and estate planning. A certified public accountant (CPA) can help with tax planning.
Since fee-based advisers are not common in Malaysia, we recommend for you to look for one with RFP licensing and is still active in the practice instead of just any insurance agents, unit trust agents or commission-based Will writer. The professional are unlikely to sell you inappropriate financial products. Some of them charge per visit; expect to pay RM100 to RM300 an hour. Some planners levy a yearly fee—commonly 1% to 2% of your assets. When you sit down for the initial interview, establish upfront how much you’ll pay.
One way to ensure that your adviser’s interests align with yours is by asking the right questions. Some basic queries include: What can you offer me? Are you conservative or aggressive? What do I do if I have a question? Look for someone whose clients are in situations similar to yours and who is available as often as you need him.
An adviser who charges based on asset size may want to handle as much of your money as possible. That could mean, for example, that he might not advise you to pay off your mortgage, even if it makes sense for you to do so. Such conflicts may be unavoidable, but awareness will help you stay a step ahead. If you’re worried about potential fraud, a quick Google search should unearth the worst abuses.
If your adviser isn’t listening to you or taking your goals into consideration, it’s time to split up. But unlinking your finances can be expensive; prepare to shell out termination and transfer fees. If it’s an amicable breakup, however, your old and new advisers can get together to make the transition smoother.