Having decided to hire a business adviser for financial planning of either personal or for the business itself, the big question that comes up is; how to choose the right business adviser? The simple answer, is to ask the right questions! And what are the right questions? Well, read on...
Questions to ask the prospective business adviser
1. Will your earning from me be commission-based or fee-based?
A commission based system can range from simple (as in lump-sum per transaction) to, quite complex calculation (as in percentage of profit or transaction).
Some prefer commission basis of payment because it means you are paying for achieving a goal. The downside of such a system is that your business adviser may opt for short-term gains and sell you financial products that may not make sense in the long-term (by which time your relationship with the financial adviser would have probably ended).
A fee based system on the other hand, is a payment for time spent on your account. The fee rate is usually fixed on the size of the asset to be managed. The advise provided to you in a fee based system, tends to be detailed and more balanced. The downside? - You can never detect over-billing i.e. it is difficult to dispute the quantum of time the financial adviser says he spent on your account.
2. Do you specialise in working with .. (your size of asset)
Some financial advisers specialise in dealing with hundreds of millions of dollars. The kind of advise they provide is geared accordingly. Therefore this question is intended to find out if the financial adviser is the right business adviser for you.
3. Is he a CFP?
A C.F.P must meet educational and ethics requirements. This is no guarantee that his advise is better but it does ensure you aren't falling prey to a quack – and there will be many of those.
4. What type of advise does he cover?
For example can he / she also provide you with insurance planning, Bookkeeping Parramatta, a business succession plan and so forth or is the advice limited to certain things only?
5. List of clients
If you are happy with the answers you have received, ask for a list of clients and call up a few of them.
Most business owners spend every minute of their professional lives advancing their business, fighting off competition, fending off take-over attempts and otherwise charting courses in a highly competitive market filled with legal and taxation hurdles. They rarely have time for keeping track of their own personal finances or undertake business financial planning. The right Business Advisory Firm will help fill the gaps in your financial planning.
More information here: http://business-adviser.com.au