Loan advisor’s main definitions are:
- this is the identification and formulation of financial goals.
- this is an analysis of the existing financial condition.
- these are recommendations for optimizing the budget, reducing expenses and increasing revenues.
- to ensure the protection of the family from risks and force majeure situations.
- this is the development of a strategy for achieving goals.
- this is a constant work on the strategy, its adjustment.
- this is the search and testing of new financial opportunities in the market.
In order to be a loan advisor, you have to understand many things. Investments are only part of it. Of course, investment is important. This is the locomotive that carries you towards your financial goals. But only narrow-profile specialists are engaged in investments, who can be called investment consultants.
A loan advisor needs to be a bit of a coach and a motivator, know how to manage a budget, understand investment options from the stock market to alternative methods (foreign rental real estate, for example), be able to choose a risk and health insurance program, know how to optimize taxation and ways to protect capital from third parties (courts, supervisory authorities and creditors). He should have the opportunity to listen you, share the experiences, support and guide.
Although people do not particularly favor insurance because of the high rates, onerous terms and the unreliability of companies, a competent financial advisor will select an economically feasible type of insurance specifically for you.
The entire insurance system in the world operates through an agent network. If you, on someone’s advice, refused to work with a financial advisor who has a relationship with an insurance company, you will still have to look for another advisor or insurance agent in order to issue an insurance policy. Otherwise, your financial plan will collapse if the breadwinner of the family becomes disabled, for example.
Will the child be able to get a quality education at the same time, provided that the money has not yet been saved up? Unlikely.
Will a widow be recognized as a wife? Unlikely.
Will a family be able to live at the same level of well-being? Unlikely.
So how do you choose “your” loan advisor among info businessmen, insurance agents and investment advisors?
How to choose a loan adviser?
- Pay attention to those who work independently. There is no point in seeking financial advice from an employee of an insurance company, broker or bank. You will be offered only products of this or affiliated structure.
- Study candidates from afar. Website or pages in social networks. What does he write about, what are his thoughts?
- Ask questions in the comments to his expert articles. Here you face the task of determining the candidate’s expertise and whether he really understands budget optimization, investments and financial protection.
- Make sure the adviser understands that there are many ways to invest either through banks, through a broker or through insurance companies. They know the pros and cons of each method. They have the opportunity to offer the client to implement all the listed opportunities, including foreign financial intermediaries.
- The same relates to insurance. A person should understand the difference between foreign and domestic risk, medical, savings, investment insurance.
- Ask what subboards and bond securitization are. How he himself prefers to invest. If the “advisor” just sells insurance, it will be difficult for him to answer how to build a portfolio, how does ETF differ from ETN, American ETF from European. He will not be able to explain how to purchase foreign ETFs in the lending market.
- Rich experience. Even the presence of a diploma or certificate issued in 2000 does not guarantee that a person understands these issues.
- When communicating, the advisor must start from the goals. First, you discuss the situation, and only then you are given a ready-made strategy for it. But how to make sure that a strategy is not just a well-sold boxed solution?
- Ask to talk about how you can invest not in the already proposed way, but in some other way. For example, not through a broker, but through another service. Or through an insurance company. It will not be difficult for an expert to switch and tell right away what specific steps will need to be taken for this.
- During the presentation of a ready-made strategy, ask questions that shift the focus a little. And you will immediately understand whether the specialist understands the topic, or is simply selling you a boxed strategy with a clever look.
- Empathy. It is always pleasant to communicate with an empathic person.
- No less important than expertise. A person should be disposed to him, he should be comfortable with him. He must motivate and support. You have to trust him.
A loan advisor is akin to a family doctor. You trust him with your secrets, you periodically address him for advice, prevention or relief of the disease.
He will tell you how to instill in a child a culture of dealing with money, and how to pass this culture through inheritance.
It is he who will help lay the first brick in building your own family financial dynasty.