How to choose a financial advisor
The archaic way of handling business and business organizations with the idea of the “kind of” Sole proprietorship where owners feel they do not need any external assistance as per advice on business management has long and long been done with.
It’s the 21st century and the need for having public assistance and private aid from professional finance ventures on finance advice to enhance businesses and boost productivity is becoming more and more obvious today.
Many business owners in Nigeria now assimilate the idea of having a financial advisor attached to their businesses in order to receive regular professional counsel and advice from these experts.
The difference is clear, companies running without the assistance of a financial advisor usually go bankrupt more often than not or require external loans every now and then for the survival and continued existence of their businesses while those who have active financial advisors rarely have economic problems nor financial crisis because their financial management system is strong and company finances remain buoyant.
However, choosing the best financial advisor for your business in Nigeria isn’t that a very easy thing to do, many do not know how to go about it and a couple of business owners ended up with the wrong persons. The most obvious effects of working with a bad financial advisor in most cases are summed up in “Bankruptcy”, “Retarded growth” and “Stagnation”.
How to choose a financial advisor
Let’s discuss how you can achieve the aim of choosing a good financial advisor for your Nigerian Business.
1. Compare records
While or before settling for a good one amongst three similar items that are being suggested to you by someone, you would possibly have to check records for this stuff to see if they have public acceptance, to see if they have proven efficiency and the reality of what they promise to offer.
Similarly, before deciding on a financial advisor to employ or work within Nigeria while you have a long list of possible persons to hire, you would have to do a background check to get some background information about them.
Perhaps you could ask them to state or mention to you other companies and firms they have worked with, when they do, it would be nice to write to, call or visit these said organizations to ascertain their view of such persons in terms of competence.
Also, you could do a general assessment of the companies in question in the aspect of how successful they’ve grown to be and how financially buoyant they are.
If answers come out positive, then you don’t have a problem, you’re definitely hiring the best person for the job.
2. Verify certification
It’s true to some extent that “examination isn’t the best test of knowledge” but at the very same time, “Knowledge without examination is void and null”.
Academic qualifications are necessary because they prove that such a person has actually been specifically trained for the field in question.
It would be wise to in a polite sense try to ascertain what academic quantifications your aspiring or current financial advisor has in terms of economics and finance or financial administration because these two pieces of training are necessary and in fact compulsory for every and any financial advisor in Nigeria to have undergone before taking up office.
You can imagine what jeopardy a company would be facing if its financial advisor rather had an MSc in Civil Engineering. Wrong course!
3. Observe your business growth intently for a few months after choosing one
Now, you possibly have settled for an advisor after he or she has shown proof of academic qualification and a record of good dealings and competency.
However, there could still be loopholes. Finance remains finance everywhere but then to be on the safer side, do not just relax after employing or hiring one hoping that everything is perfect already and they already know.
No! You need to keenly observe the marginal growth of your business from the very first day of hiring to a given period of time, if the growth graph curves or drops drastically (which may likely not be the case) or drops gradually and keeps dropping further, there’s definitely a problem and if you keep at it, you’d be losing everything you’ve ever toiled for, you need a replacement asap.
On the other hand, if there’s a gradual increase in the company’s profitability and productivity no matter how little it might be, be it 10% or less, it’s most definitely a very good sign that there’s progress and sure there’s going to be continuous progress.
This throws a few more light on point number 2. There’s really nothing bad if you have hired a total of 10 advisors in 12 months, you’re after your success and should fight for it at all costs.
If the first person proves incompetent, hire the next person, if the next person still doesn’t fit in, change him! You keep changing until the difference becomes clear to the point where it is now possible for you to project your progress from a given standpoint.
Good financial advisors are hard to find because in Nigeria today, almost everyone is just about the certificates these days and as such do not take time to learn the practice.
5. Involve them in every situation
In every financial situation or decision, you’re about to take up, ensure that your financial advisor is aware and in support.
The more they are engaged with these actions help you to see what you really need to see. You’ll get to see if their advice is effective or not, you also get to establish if they really are experts as they claimed they are.
However, you should also use good judgment while carrying out this process of “determining value” so that you do not end up losing millions of Naira because of advice from a bad financial advisor, it has actually happened to many. Just be cautious until you finally arrive at your desired best advisor on finances.