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Financial advisors are specialists. Everyone needs them. We reach out to doctors for health check-ups. Our tax returns are filed by chartered accountants. We connect with lawyers for legal matters. Why don’t we find financial advisors for managing the most important aspect of life – our finances?

A financial advisor is an expert in the field of financial planning. He is someone who understands goals and aspirations, considers factors like risk appetite, age, income and expenses. He then draws out a roadmap for us – a financial road map. The destination: a robust wealth stream.

We can call the financial advisor a doctor who looks after our financial health. So like you choose a doctor, pick an advisor after a lot of consideration.

Who needs a financial advisor?

A common misconception is that only people with a lot of money need a financial advisor. Another is that big ticket investments need the assistance. Net worth or investment size don’t matter as much as goals do.

Obviously, not all aspects of your financial life need intervention, but some key aspects like planning for a big expenditure like buying a house or retirement planning should be done using professional help.

Having said that, one should keep in mind the cost-benefit analysis of having an advisor.

Three steps to select a financial advisor

• Know what your financial needs are

Before you jump onto getting an advisor, it is crucial to understand what your financial needs and goals are. Your needs might be completely different than what the advisor is capable of fulfilling. He might have the expertise in a specific domain, but you may be looking for an entirely different aspect of your financial well-being.

Every advisor may not be compatible with your needs. Much like there are specialists in the medical field, it’s best to reach out to an advisor whose specialises in your requirements.

• Understand the fee model

There are no free lunches, right? Even as it may appear that an advisor is not charging you up front, he is receiving a commission on each investment product you pick via him. Another model is a fee-only model. Both have their pros and cons. A commission-based model might make the advisor to lead you towards a product that offers him a higher commission. A fee-only model would require you to pay a fee over and above your investment.

• Accountability to you

If the advisor is a SEBI registered investment advisor, he would have a fiduciary responsibility towards you. Unlike SEBI registered advisors, distributors or agents who provide investment advice do not have any fiduciary obligations. A registered advisor is bound by the law to protect the interest of the client, over and above his own interests.

Financial health is of utmost importance. Find someone who would take care of it for you, with you.

(The writer is co-founder & CEO, MoneyFront. Views expressed are personal)