It pays to seek professional advice

Question: I'm sure a lot of people are concerned about their investments and insurance policies given the global economic changes, especially over the last few days. With so many different theories and forecasts floating around, I am confused as to how I should go about protecting my investments.

ANSWER: One of the challenges of deciding your overall strategy for managing your financial affairs is to know whose advice to take. The UAE has a large number of financial advisers, and - unfortunately - not all of them are professional and responsible in the advice they provide to clients.

In addition, finance is one of those areas where everybody has an opinion. Trying to follow the suggestions of friends, family or colleagues can be a problem, since - while they will have your best interests at heart - they are not professionals, and unfortunately can be drawn as easily into myths and fashions as anyone else.

One of the big problems many people experienced during the stock market decline of a few years ago was that money was following rumour and speculation, rather than market analysis and professional advice, which meant many people over-invested.

So it's important to find a professional adviser who you feel you can trust and whose approach matches your ambitions for investment.

You could start with your local bank. Typically, advisers at banks operate in a highly regulated environment, and also tend to be cautious in the advice they offer, given the importance of reputation in this sector.

A number of banks have expanded their wealth management operations to ensure that they have the skill set and service level customers are increasingly coming to expect.

Range of solutions

However, banks can't always offer the range of fin-ancial products and scope of services than an independent financial adviser can. The advantage that an independent adviser has is that they are not tied to a specific set of products, so can more easily match your needs to a range of investment solutions.

The challenge is that financial advice is still a somewhat under-regulated sector in the UAE.

There are no minimum standards of service, or agreed expectations for professional conduct, or even an agreed minimum standard of qualification for entry into the sector.

Qualifications

Given these concerns, you are best advised to seek an adviser with a globally-recognised qualification. The Financial Advisors' International Qualification (Faiq), developed by the Chartered Insurance Institute, is a good qualification to look for.

It has been specifically designed for markets with a limited regulatory environment like the UAE, and in order to qualify, professionals must pass a test on sound professional practice, and ethical behaviour.

Professionals who have the qualification are entitled to use the designation 'Faiq (CII)', enabling you to recognise them in the listings.

There are a number of other similar qualifications, including the Chartered Financial Consultant (ChFC) designation, which means the holder is a professional financial planner who has completed a series of courses and examinations in specialist subjects.

You should also look to ensure that your financial adviser is not tied to a particular provider, but rather is fully independent.

Normally, independent financial advisers are able to help shape your portfolio according to specific needs.

- The writer is director of general insurance at Nexus, one of the region's leading financial advisers.

Views expressed are the author's own and do not necessarily reflect those of Gulf News. If you have questions, please email: advice@gulfnews.com.