Investment as a concept is unique to every individual as every person has his or her own financial objectives and risk tolerance. Investments cannot be treated like a commodity or a lifestyle product. Just as you should always consult a doctor before taking any medicine even if you are well aware of the drug through common knowledge, the same holds true for your finances.

Poor financial advice can result in big compromises. Personal finance is a broad, complex and dynamic field. Our financial life has become much more complex than it was sometime back. With returns from traditional debt instruments dropping to single digits, exposure to equity-oriented investments appears to be the new trend so that one is able to maintain one's standard of living in the time to come and achieve the financial goals as well.

Calling for expert help is prudent not only to deal with the volatility in the markets but also to avoid hasty calls and resorting to excess leverage which appears to be the culture in today's day and age.

Specialist's job

As is often said, "Let the specialist do his job". One will be better off recruiting an expert as most of us lack the time and expertise required to manage our finances.

Searching for a sound financial adviser who is the right match for you calls for a lot of work. That said, there are some who feel that hiring an automated online investment service, termed as a robo adviser, could solve most of their problems and save them from the hassles of searching for an expert.

However, there are not many robots who can manage all aspects of one's life. In my view, finding the right financial adviser is one of the most important money management decisions one ever makes. While there are benefits of taking the services of a planner, choosing one with character and competence requires you to go that extra mile.

Search strategy

How does one go about evaluating and choosing one's financial adviser? Start by inverting the traditional search.

Personal recommendations from known people is one way of finding an adviser. This will prevent the first impression of a charismatic adviser colouring one's judgment.

But it is not always easy to find out whether an adviser has done a decent job until it has been a while as the fruits of advice can only be assessed over a period of time. Thus, word of mouth needs to be backed by some background check of the reputation of the company the adviser works for. While doing a background check, the performance track record across market cycles should be considered.

Remember, a company that is wary of disclosures probably isn't worth doing business with. Look at the advisers' professional qualification. The adviser should be registered with Sebi and is expected to act on behalf of his clients the same way he would with his own money.

Once you have shortlisted the list of advisers with clean track records, take out time to make notes and seek a second opinion from a person you trust by comparing notes.

The key to choosing a competent adviser is to get him talking. Try to understand the approach of the adviser towards fulfilling your financial goals.

Comprehensive view

Good advisers take a comprehensive view of your finances. Rigorous financial advice will be based on more than just your income level or the types of assets you invest in. A good adviser will spend time to understand your full financial situation, spending habits, insurance and credit needs and life goals with an intended time horizon and then align your investment goals to carve out a meaningful and accurate strategy.

What to avoid

Be wary of advisers who guarantee or otherwise assure hefty returns. Transparency is key to building a strong bond between the investor and his adviser.

While the markets are in no one's control, the fee that the adviser charges for a solution certainly is. Besides, transparency can manifest itself in many other ways. The adviser should be direct in his communication. The solutions offered by him should focus on the needs of the client rather than on benchmarks or the launch of complex, niche products that often get tested through customers.

Good advisers understand the nuances of the market environment as well as the products - their features, risks and benefits.

Moreover, an adviser needs to be calm and patient. He needs to evaluate the options that are best for you without showing any sense of urgency. An adviser with a strong sense of urgency may not have your best interest at heart.

Emotions always take precedence in times of crisis and most investors are slaves of their emotions and take irrational decisions. Hence, a good adviser is not one who agrees with his client but one who makes the client aware of the consequences of such actions.

A financial adviser not only provides a client with products that beat market trends but also aligns opportunities keeping in mind your requirements. The adviser you choose should have integrity, commitment to ethical behaviour, high professional standards and should put your needs and interests first. As is said, "When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps."

The writer is head of investment advisory, Motilal Oswal Private Wealth Management