What to look for in a Financial Advisor

Andrew Bartlett

In my years of experience within the Financial Services industry, both in Russia and South East Asia I have come across more cases of clients being miss-sold a financial product, by a supposedly ‘professional’ advisor, than I care to think about. Of course, in any industry you get both good and bad service and advice, but it seems that my chosen profession attracts more than its fair share!

The situation is worse in areas which have little or no regulation of this industry, and unfortunately Russia falls into this category, so how can an individual protect themselves from unscrupulous salesmen and the ‘advice’ they give?

In this series of articles, I will try to give some advice on what to look for before you accept any advice from a Financial Advisor, and this article will focus on the first stages: choosing and then meeting your financial advisor for the first time.

My first piece of advice is ‘Ask around!’ Have any of your friends, colleagues or associates had any experience with the company or individual you are thinking of dealing with? Does the advisor have any clients who will provide a reputable and credible reference? If so, use them and ask what service they have received (but remember an advisor will never give the name of somebody who has had a bad experience or is unlikely to give anything other than a positive reference!).

Secondly, do you own research. Look at the company website and Google the name of the company or the advisor. There are any number of Expatriate Forums which often posts questions or comments about this very subject. Care must be taken to ensure you are not just reading comments from a disgruntled employee or somebody simply holding a grudge, but you should quickly see if there is anything of concern.

Once you feel comfortable that the company and individual is worth speaking to, ask to see their qualifications. Most reputable advisors will offer this for you during a first meeting anyway, but if not it is quite natural for you to ask to see them. Don’t assume that because an individual works for a large or well-known company that they hold any professional qualifications to be a Financial Advisor!

Where my company is based (Malaysia), the regulator stringently monitors and checks advisors qualifications, and their Continuous Professional Development (CPD), before they will issue or renewalicense to practice. A list of all qualified advisors is then published online for anybody to check.

Unfortunately, there is nothing like this in Russia and literally anybody can profess to be a Financial Advisor regardless of whether or not they hold any professional qualifications or have any prior experience (or even training)! During a first meeting with your advisor, you should be comfortable that he or she is actually conducting a full ‘fact find’ on your individual situation and needs. Be wary of any advisor who starts trying to sell any products at this stage! Apart from the hard facts (age, family situation etc.), your advisor should understand your tolerance for risk, currency considerations (now and in the future), your liquidity needs, investment goals.

Once the advisor has conducted his fact find, he should then prepare a full written summary of your discussions, along with his initial recommendation. My next article will focus on the fact find and the following stages of the advice process.

If you have any questions for me or would like some specific advice, please feel free to email me at [email protected].