In this era of tremendous change and consistent competition, no firm irrespective of its capital or size can afford to lose marks because of casualness. The biggest misconception in the minds of new firms is that they are capable of managing their own finances, without any external help. Statistics shows that this misconception is highly prevalent and can cost a great deal to your business. How to avoid such a situation? The best way is to hire a professional financial agency or a financial adviser. The main task of a professional financial agency is to take care of your firm’s stocks, hire or pick bonds and trusts for real estate capital and other such investments for your firm. In other words, choosing a professional financial agency for getting the above tasks done is an extremely crucial task and one must follow a stepwise procedure for getting it done.
But choosing the right agency or adviser is a task in itself. Before you finalize a financial agency for handling your finances, here is a list of 5 questions that you should definitely ask while grilling a financial agency in an interview.
- Who Is The Real Manager Of My Investments?
This is probably the most important and the most revealing question when it comes to the selection of a professional agency. Keeping your funds in a discretionary account and conducting important transactions without your trade-wise consent are two of the most crucial features that you should look for in your financial adviser. Most of the renowned financial agencies like Media Group Nordic and others have suggested that transactions involving ETFs, mutual funds, money bonds and stocks of individuals should be dealt on the go-get basis and time involved in such transactions should be minimized by not involving in trade by trade consent procedures. While hiring a financial agency or adviser, never fall in the trap of middlemen who boast of themselves to be effective money managers but are actually working as middlemen between your company and genuine financial advisers.
- Can You Give Us A Summary Of Your Track Record?
Your first step while making this enquiry is to ask for a detailed analysis of the ADV form. This form discloses all the aspects and possibilities of previous conflicts related to security and trades and answers a significant number of queries that might strike in your mind while hiring a professional agency. Always make sure that you ask for a list of all the clients your prospective agency has worked with and call them to make the desired enquiries. Keeping in mind the current state of financial markets, one should also make an assessment of the risk oriented performance of the agency before hiring it.
- Who Is Responsible For Your Payment?
Technically speaking, all the payment that a financial agency gets shall come from the clients that it has managed to connect with. All the other sources of income including trade commissions, teaser fee on mutual funds, undefined annuities, bonus sharing with the investment products of the firm should be cut out and disclosed immediately. Professional agencies highly discourage such false sources of income and think of these activities as the generators of conflict between the firm and financial agencies. Furthermore, such undefined sources of income suit more to brokers and broking agencies but when it comes to a professional financial agency or adviser, the above mentioned income sources are clearly discouraged.
- We Would Like To Pay You By The Hour. How Does That Sound To You?
When we talk about the going rate for an average financial agency, it revolves around one percent of the total number of assets that are managed by the agency. Due to the sudden rise of banking on internet, the costs involved in transaction activities have reduced drastically. A large number of financial activities like exchange trade funding, mutual funds and index funding are automated on internet and involve less scope of work for a financial agency. If you and your financial agency agree upon such an automated framework, you can expect it to charge less on account of the reduced work. If they agree upon this method, you can either reduce the cost from one percent share of the agency or you can start making the payment via ‘pay by hour’ method.
- Do You Know That You Are Under A Legal Obligation To Act In Our Best Interest?
As a financial firm, you should be absolutely aware of your legal right to sue the financial agency or adviser if they don’t work in the interests of the company. In a negative scenario, you can drag the agency in a court which can even lead to arbitration. However, do keep in mind that a financial agency works as an adviser and is not bound to follow your orders blindly. An agency has the right to decline your order if they believe that such an order may land you in a difficult financial position.
Hiring a professional financial agency is certainly not an easy task. Multiple factors work simultaneously when it comes to the hiring process and the above mentioned questions are effective enough to reveal the most out of a prospective financial agency.