A house with a view. A comfortable nest egg. Enough money for a rainy day and then some. A contingency plan. A contingency strategy in case the contingency plan doesn’t work out.
These are just a few of the things a financial adviser can help you with. The end game is always the same: peace of mind thanks to a healthy and bankable ledger balance.
“Financial advisers always work together with people to achieve their financial goals. They always simplify the saving/investment process and help people in saving time and money while selecting right investment options for their clients,” says Khetra Reddy, Senior Wealth Architect at Elixir Wealth Solutions.
How does it work?
Stuart Ritchie, Director, AES International, explains: “A good financial adviser will sit with you to understand your goals and aspirations and turn your life into numbers and a realistic financial plan, providing specific advice and guidance, making financial decisions and the achievement of those personal goals and aspirations so much easier.”
You should always seek a second opinion no matter what the subject.
However, he does caution restraint when it comes to giving someone free rein over your expenses. “People are better off not having an adviser at all than one pushing products that serve their needs and not the needs of the people who invest in and use them,” says Ritchie.
“Expatriates in particular, even very successful people at the top of their careers, can be vulnerable to financial “sales people”; we see this all the time. We spend a lot of time sorting out the mess and rebuilding things for people. There are good advisers out there, but it’s imperative people ask the right questions and know exactly what they’re getting.”
Looking for a financial helper? Beware of this
Look for the hidden agenda in what someone is offering you, say both industry experts. Here are a few other guidelines for picking an adviser.
The firm needs accreditation. “Make sure the firm is accountable to, a ‘proper’ financial regulator (i.e., one that enforces high standards and its rules) such as the Dubai FSA, UK FCA, the US SEC, or the Singapore MAS,” says Ritchie.
Check the paperwork. “The company [to which] the financial adviser is associated should be licensed to carry out the product/services distribution [that they are touting],” says Reddy. And the adviser himself/herself must have “the appropriate qualifications to provide regulated financial advice, such as those required by the UKs Financial Conduct Authority,” adds Ritchie.
Terms and conditions. Before you sign on the dotted line, you need to know exactly what you are getting into. “You are provided with clear terms of business, have read them and are very comfortable you understand them, says Ritchie. Financial advisers must be very transparent in their dealings. They must not be paid on a commission basis. “The fees and charges you are expected to pay are absolutely transparent, you receive written confirmation of them and they are split out between those for investment advice and those for any product charges, instead of being bundled together,” he adds.
Liquidity matters. If you get it right, “you are not locked into any contractually binding investment period where you have exit penalties; i.e. you can buy and sell at any time”, says Ritchie - and this is something an adviser must be on the lookout for.
Your needs, your wants, your desires. This is all about you and what you want to accomplish with the assets at your disposal. An adviser “puts [his] client first,” says Reddy. “Financial advisers can [and must] negotiate better with service providers” and manage stability in the dynamic market.
“The adviser can demonstrate an ability to control investment expenses so that costs are kept low and your investment has the best potential for growth,” adds Ritchie.
What should you get? “Your portfolio will be constructed according to your specific needs, taking into account your investment objectives, time horizon for the assets, appetite for risk, cash flow needs and other factors specific to you,” explains Ritchie.
Second opinions and background checks…
…are both musts, says Ritchie. “You should always seek a second opinion no matter what the subject. A good adviser will recommend that you do, as they will want you to be as comfortable as possible with your decision and plus they will have nothing to hide and will stand by their advice.”
Reddy has a slightly different point of view. He expects a person who is in the business to know his/her stuff and give the client the best alternative. He does concede,however, that if “he financial adviser is not providing with alternative options” it’s time to seek a second counsel.
Be afraid, very afraid, if…
If your financial planner says there are no charges/fees in the solution provided, say both wealth management companies.”
So, do you have to go to a company and get a financial guide onboard? No, but it certainly helps you get to where you want to be.