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7 factors of considering financial advisor before investing in startups


It is simple to locate financial advisor or sales agents who call themselves advisors. They seem to be on every corner. In India, around 50 lakh individuals offer investment and insurance goods. Because of the low entrance barrier for selling financial goods, anybody may become an adviser.

The underlying assumption of an adviser is that he will provide objective guidance. However, recent regulatory interventions concerning reforming the code of behavior for these advisers in numerous sectors have clearly shown the disparity. They’ve become a part of the issue rather than a part of the solution. You’d be surprised if you read my last line, but it’s true.

What exactly is a financial advisor?

A financial advisor is a finance specialist who offers financial counseling and guidance to individuals or businesses. Financial advisers may help people and businesses achieve their financial objectives faster by providing them with plans and methods to increase wealth, cut expenditures, or erase debts.

Financial advisor position

A financial adviser may assist people or businesses in achieving the following financial goals.


In the case of an individual, a financial counselor may advise them on how to save more money and develop their wealth. It accomplishes this by assembling a portfolio of assets well matched to the client’s risk tolerance. Some customers are more ready to take on risk if the idea of a higher payoff outweighs the possibility of losing money.

On the other hand, some customers are risk-averse and prefer a reduced-risk portfolio, even if it implies possibly lower returns.

Determining an individual’s risk attitude may be challenging since various circumstances can influence risk attitude. Thus, a financial counselor may inquire about the individual’s age, salary, marital status, debt, or savings to have a thorough picture of their client.


Financial advisers may assist firms in giving a second, objective view of company growth efforts. For example, if a firm is considering expanding its operations by establishing a new factory, financial consultants may assist in objectively analyzing the project’s viability.

Once the financial advisor’s evaluation completes, they may offer their findings to the company’s management to provide the company’s leadership with a helpful second view.

Financial advisers must have specific capabilities

financial advisor

Being a successful financial adviser requires more than just a passion for money and a knack for numbers. As a financial adviser, you should brush up on these workplace and job-specific skills.

Financial aptitude: 

To make the best judgments for customers, financial advisers should have a thorough grasp of financial products and a more comprehensive comprehension of how the world of money functions.

Customer-first mentality: 

A successful financial adviser prioritizes the requirements of its customers. If you become a CFP (Certified Financial Planner) or CFA (Chartered Financial Analyst), you must follow a code of ethics.

Marketing yourself: 

Building connections with customers and finding new business will likely be part of your profession. Maintaining relationships, developing a social media presence, and developing a personal website will be beneficial.

You may present individualized plans to customers or speak to a group about financial items and how your services can help them. Excellent verbal and written communication skills will be required.

How should you select a financial advisor?

Let me provide a few pointers to assist you in picking a financial adviser. The list may be lengthy, but let me keep it accessible by focusing on the top three topics that need special attention.

1. Comprehensive

Someone aptly remarked, “To a guy with a hammer, every issue appears like a nail.” An Insurance Agent will be ready with a Policy for all your financial goals, whether it is Saving, Children’s Education, or Retirement Planning. Furthermore, the agent will promote his company’s goods and may not be familiar with the products of other companies. Similarly, a mutual fund agent would despise discussing post office schemes, corporate FDs, or bank FDs.

Has someone advised you to repay your debt first and then consider investing or saving some money for emergencies in a savings account or liquid fund? Your counsel should adhere to one principle: “Everyone has one thing in common: they are all different.” He should refrain from squeezing the individual into an already-fitted coat. He must consider all aspects of the client’s financial status. That is the only way to provide individualized, all-encompassing guidance. For investing there are a lot of websites to invest in online. Angel Investing is the website to invest in startups, that can assist you in any sort.

2. Independent

Is your best interest his only interest, or is anything else on his mind when he talks to you? Is he thinking about his monthly or annual bonus, which is contingent on you purchasing an expensive product? If your adviser works for a bank, brokerage business, mutual fund house, or insurance company, your objectives and needs will likely be put on the back burner. His sales presentation inspires by something else. This style of advice is hazardous for anybody. Look for an adviser that is really interested in your objective and wants to build a long-term connection with you. Rather than his employer and firm, his ethics should govern him.

So, seek the two criteria mentioned above. You will most likely discover an Individual Financial Planner – yet the word “Financial Planner” has been a source of consternation in India for quite some time now. Without the requisite training, education, or certification, anybody may call oneself a “Financial Planner” without local legislation or rules. 

3. Competent

Have you ever attempted to determine the financial advisor’s education, expertise, and experience? As we have seen many people taking stock advice from those sitting on terminals or brokers who need to learn investments. After finishing their management course, employees from banks who have just joined would claim to know everything about the investing industry and to be masters of it.

The most uncomplicated strategy to discover the proper adviser is choosing a few advisors you believe have relevant experience. Take a questionnaire and ask some questions to help you examine them. There is nothing wrong with raising these concerns. 

4. A specific problem solution

A product or service should address a particular issue or demand in the market. For example, when Walkman was first introduced, many complained that they couldn’t listen to music while walking. Not only should there be an issue, but the product given should be the best or only solution to that problem on the market. 

5. Should be aware of market trends

The next step is to research the market. Is there a large enough audience for this concept? The startup should also clearly identify its target market.

6. Management group

Examine the management team and the entrepreneurs who founded the company. Could you take a look at their narrative? What qualities and experience do they have that will help them succeed in this venture?

7. Business strategy

The business plan outlines all components of the early phases of the startup. How much money does the startup want to make? What marketing methods will they use to attract and retain customers?

Bottom Line

Finding a financial advisor takes work, but it will determine your financial success. Find an excellent counselor who is a good fit for you. Evaluating a startup is not an exact science. It is an art that should practice, and although the outcomes are not always perfect, it enhances the likelihood of getting it right when investing in a startup.

If you have queries regarding the same, and are looking for a financial advisor online. Please visit Tyke Investments. We have a team of the best financial advisor India.

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