In today’s fast-paced world, an entrepreneur has to wear many hats. You will sometimes find yourself crafting marketing campaigns to get ahead of competitors. Likewise, managers will come up to you for all budget-related queries. Here, your savvy knowledge of numbers and stats will come in handy. It will allow you to explain budget allocation, cost management, and business profitability. But what if you are not an expert on money-related matters?

With the correct financial information, the business can maintain its direction. After all, you won’t know where the business stands regarding profitability. In such instances, hiring a financial advisor could be the best decision. They are the experts of the finance world, helping you manage money and accomplish all financial goals. Besides this, they also provide different financial services such as budgeting, analysis, and investment management.

Now, the question is how to find the right financial advisor. Truthfully, picking the right advisor depends on your business situation. You must look for someone offering services that align with your business requirements, ensuring you don’t end up exhausting money on services you don’t need. Let us show you the ropes if you are new to this.

Here we have outlined five things to look for in a financial advisor.

1.   Education & Qualification

Once you have collected a handful of resumes, start reviewing the prospective advisor’s educational background. It will determine how their qualification can help with your financial solution. Let’s say a potential advisor specialized in taxation and accounting will be helpful for a business wanting to file returns. Most importantly, you must ensure the advisor’s qualifications align with the accounting principles followed in your region.

If you are running operations in Australia, search for Melbourne financial advisor to ensure they follow the same financial standards. After all, the finance world has many bifurcations; the US follows GAAP, whereas the UK relies on IFRS. Further, look for advisors who can apply their knowledge to the real world and develop an optimal strategy for your business. For this, look at their website. It will unfold a lot about their planning practice and thought process.

2.   Work Experience

In the field of advisory, experience counts. Someone who graduated right from college might not be the best judge of a company’s financial position. Hence, look for someone with experience. You must find someone who can prove to be an expert with their experience and expertise. You can ask for their portfolio, consisting of the clients they worked with and past projects. It will help determine whether they have relevant experience working with similar clients.

Further, it will enable you to track performance. You can see where the advisor’s old clients stand today in the market and how they are doing financially. Comprehensive research will go a long way in finding a suitable candidate.

3.   Fee & Conflict of Interest 

How do you plan to compensate the advisor? Some companies hire full-time advisors and include them in the payroll, but there are many ways to compensate. First, ask your potential advisor during the interview how they would like to get compensated for their service. It will give you an idea of how your industry pays the advisors. Next up, decide if you want to pay through client fees, commissions, or a combination of both.

Remember, more conflict of interest arises when commissions get involved. That is because it becomes challenging for the advisor to stay independent. Due to this, they often put their interest ahead of the company. Therefore, you must ensure that advisors don’t get influenced by their compensation method subconsciously by drafting the contract smartly. You can offer an hourly fee, a flat rate, or assets under management fee – based on a percentage of assets they manage on your behalf.

4.   Diverse Skillset

Besides extensive financial knowledge, advisors must have diverse skill sets. From planning budgets to analyzing cash flows, they must help businesses at every step. Likewise, they must use their analytical skills to find gaps in financial statements. That way, they can recommend solutions and build a solid financial standing.

In addition to technical skills, soft skills are equally essential. An advisor must demonstrate effective communication skills to make owners and managers understand the company’s financial well-being. Similarly, they must be effective problem solvers to help businesses escape tricky situations and liquidity crises.

5.   Services & Working Relationship

Most business owners expect a single advisor to offer all financial services, which is practically impossible. After all, every advisor has a specialization, making it challenging to cover all areas. Therefore, you must define services and working relationships with every advisor. Some advisors have a preliminary upfront meeting and follow up with clients once a year. On the contrary, many advisors offer support to help implement financial goals.

The advisor’s transparency is of significant importance. Does the advisor make circumstances complex or offer a way out? Does the advisor use jargon or make everything understandable for managers? These things improve the working relationship and ensure you have a valuable business resource.

Final Thoughts

Finding a financial advisor is more complex than finding an accountant for your business. You have to look for someone who can work in your best interests. Likewise, ensure their goals align with your company since you need the advice to save money and earn more. Above all, look for someone with the right qualifications, relevant experiences, and versatile skills. It might seem like extra legwork, but it will go a long way in securing your company’s financial future will go a long way.

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