CAFS Portfolio

Financial Consultant

An investor who might have less time and knowledge to manage investments can prefer financial consultants.  They could be a great support for them in managing the performance of the investments. Let us explain to you about them, their qualifications and how to choose them.

    What is a financial consultant?

    A financial consultant is a finance professional who has expertise in financial planning and investments. They analyse your investment goals based on different parameters like money, time, and risk. Based on that they suggest a suitable investment.

    In certain cases, they manage the whole cycle of investments from choosing the investment to managing its performance.


    What does a financial consultant do?

    Managing money consists of 100’s of the task. Their responsibility begins from choosing the investment to showing results. The financial consultants take responsibility for the investment cycle. They make sure the investments are showing good performance.

    Let’s discuss the three most important roles below.

    Understand the investor goals:

    The work of financial consultants begins with understanding the investor goals. Certain investors might take high-risk others might not. The same goes for the time and the amount of investment. They will understand the investor his goals and capabilities and plan the investments.

    Choose the investment:

    Based on the investor’s goals, the financial consultants suggest investment. A Financial advisor will choose a profitable investment. Their performance makes sense to the investors when the investment makes a profit. Due to market condition, the investment may go wrong but the financial consultant finds way to manage the same.

    Track an investment:

    Investors should track the investments so that it works on achieving the investor goals. This helps the financial consultant to suggest any changes if the performance of the investment does not show a good forecast.


    When should an investor opt for a financial consultant?

    Financial consultants are most suitable for investors who have less knowledge or less time to manage their investments. Below are a few instances where you can opt for one.

    Working or handling business:

    If you have a full-time job or a business he can pass on the duties of handling the investments to a financial consultant. This helps the investors to concentrate on their primary income.

    Knowledge and experience:

    If an investor has less knowledge or lacks experience he can hire a financial consultant to manage his investments. As they come with experience and relevant experience.

    For better returns and performance:

    If an active investor could not make desired profits he can prefer a financial consultant. They suggest relevant changes to improve the investment performance.


    How to choose a financial consultant?

    The performance of the investment relies on the financial consultant. Choosing one contains three major steps. Let us go through the same.

    Learning the basics of investment

    For any investment decision, you should get knowledge of at least 30 per cent. In the same way, before choosing a financial consultant you should learn the basics of investments. It helps you to understand the language of the consultant. This helps in making effective decision.

    Analyse their performance

    An experienced financial consultant will have a performance portfolio that contains his previous works. Comparing different investors ‘ portfolios could get you an industry average. Thus you can choose a suitable consultant to manage your investment.

    Creating a modus operandi

    Miscommunication is a hindrance when discussing every investment decision. It advised to discuss and follow a modus operandi for the investment decisions. This avoids miscommunication that could lead to investment losses.


    How to qualify a Financial consultant?

    There are many factors in assessing a financial consultant. Below is a three-pointer to qualify one.

    Based on education:

    It is a great sign that the financial consultant has a strong educational background. A masters degree in finance, Charted accounted, CFA etc, is a strong sign. Even though this is not the only factor that qualifies one, you can also consider their educational background.

    Based on experience:

    The financial consultants could have experience as an executive which you can consider. You can rate them based on their experience. The experience of a financial consultant is a vital factor that helps you to qualify. You can give a change to a less experienced financial consultant. You should track the investment after taking this decision.

    Based on analytics and research skills:

    To choose an investment that achieves the investment goals the financial consultants should perform accurate market research. This helps them find the most potential investment that has a high chance of achieving their investment goals. Even though the market condition is a major influencing fact proper market research could be a great support in making an investment decision.

    Cost of service:

    Certain financial consultants might charge the investors above the market standards. Investors should get proper quotes from the market before making their decision. If the investment makes a loss the cost of service could be an extra loss for the investor.


    Financial consultant in Chennai

    At CAFS we provide financial consultation for Insurance, Mutual fund and stock market investments. Our Financial advisers will analyse your financial goals and suggest the best plan. We are partnering with 24 Insurance companies and 44 Asset management companies.

    We provide customer delight by providing a continent investment process, investment analysis, and a top-notch choice of investment. Our office is in Chennai T-Nagar (Contact Us), We offer a free consultation over a video call.


    What is the difference between a financial consultant and a financial advisor?

    There is no such huge difference between a financial consultant and a financial advisor. As both the roles are responsible for managing the investment there might be changes in their responsibilities.

    They might show the difference in terms of their certifications and qualifications. In India SEBI has created certain restriction for financial consultants and advisers It consists of the certain exam, certification, registrations to manage investments. (Backlink)


    How Do Financial Advisors Make Money?

    Financial advisers ask for money on three aspects:

    Percentage based:

    Let us take an example that an investor wants to invest 1,00,00,000 ₹ (one crore rupees), a financial consultant could charge you between 1 per cent to 2 per cent. This charge is irrespective of the performance of the investment.

    Fixed fees based:

    A financial advisor could form an agreement where he might charge a fixed fee irrespective of investment activity. They can also charge you hourly fees for performing financial planning.

    Commission based:

    Based on the profits made more than the commitment, a financial advisor could make a commission.

    More than the fees charged by the financial advisor, the investor should compare all the options to the qualifying factors we have discussed above.


    Why you should not use a financial advisor?

    It is an important decision that an investor takes while choosing a financial advisor. Below are three main reasons not to use a financial advisor.

    No Investment knowledge:

    If you have no knowledge about investment, you go through our How to Invest guide. It is always advised to understand the basic concepts of investing before choosing a financial advisor.

    Have less than 1 Lakh to invest:

    We at CAFS don’t set any limit for financial advisory but, most of the people have a limit of One lakh below which they won’t consider the investment.

    Without comparing:

    As an investor, you should compare financial advisers with the fees and the past performance. Fixing a financial advisor without comparison is a bad decision.


    Key points:

    1. Choosing a financial consultant could make a huge impact on your investment’s performance.
    2. Learning how to invest before choosing a financial advisor is advisable. An investor should be aware of the fees charged by the financial advisor.
    3. Choose a financial advisor with proper comparison and qualification.
    4. Choose a financial advisor only when you have a relevant need.

    Leave A Comment