15/08/2019

What Does a Financial Adviser Do?

This post seeks to answer the following questions about the Financial Adviser role:

  • What does a Financial Adviser do?
  • What benefit will I get from the service?
  • Do I need a Financial Adviser?
  • What is the cost of Financial Advice?
Financial Adviser

What does a Financial Adviser Do?

The primary role of a financial adviser is to meet with clients and help them achieve their life goals. These meetings will be different depending on whether the meeting is with a new client or an established client.

New clients are in the phase of establishing their life goals and objectives. The adviser can help them realise these goals by putting in place the correct financial strategy.

Established clients are progressing towards their goals. The Financial Adviser provides updates on performance and new products on the market. Whilst the client provides the Financial Adviser with updates on any changes in their circumstances which may need to be taken into consideration. For example, a promotion, change of marital status or health.

When Financial Advisers are not meeting clients, their role involves: keeping up to date with financial markets and trends; research of products and services available; administration of client accounts; marketing; continuous professional development.

What benefit will I get from a Financial Adviser?

This will depend on your level of financial literacy and how much time you have available. If you have a high degree of experience in financial matters and lots of free time, the benefit may be less than others. However, for the majority, a professionally qualified guide provides the following benefits:

Product Selection

Using the right tools for the job is essential if you want to be effective. A Financial Adviser can help set up the right product for you, based on your specific needs.

Asset Allocation

Approximately 80% of returns come from being in the right asset class (the 4 traditional asset classes are shares, property, fixed income and cash). Having a portfolio structured to your preferences reduces risk.

Experience

In the international financial services market there are many investment opportunities. A professional who spends his working life analysing investments is more likely to spot a weakness in the product or strategy.

Support

A good adviser will be there to support you throughout the term of the financial service you buy. They will be able to help you control your emotions, the highs and lows which inevitably occur over the life of an investment. This helps achieve the best results for you.

Do I need a Financial Adviser?

Many people do not need a Financial Adviser. They do not have the financial resources to justify paying the fees. Or they have the time to educate themselves and managing their own affairs.

If you would like a list of books which you could read to manage your own finances, please contact us and I will send you a few ideas.

For busy professionals, time is at a premium, and so they ‘employ’ a specialist to help them.

What is the Cost of a Financial Adviser?

The cost of financial advice in the UAE is within the product charges. Whenever you engage any adviser, you should make sure the fees are clearly explained before you sign up. Check out our post on choosing a financial planner for handy hints. As expat life is unpredictable, you should pay attention to the charges if you must stop early.

Value

The price of financial advice will vary from one firm to another. However, when appointing an adviser, you should focus on value.

The most expensive is unlikely to be the best. Financial services are unique in that the more you pay the lower your result. Equally, the cheapest is not likely to be the best. There is a cost of doing business and you should be looking for a long-term relationship with a trusted adviser. If they cannot afford to stay in business, then you will need to start again.

Fortunately, fees are becoming more transparent, so make sure you ask what you are paying and how it is structured if this information has not been provided.

Cost of Not Talking to a Financial Adviser

Finally, whilst there is a cost associated with financial advice, there is also a potential cost of not appointing a professional. This cost could be significantly more than the fees charged by a qualified and licensed financial adviser.

Summary of the Financial Adviser Role

Financial advisers work on behalf of their clients. They assist clients in identifying and achieving their life goals. This often involves financial planning and use of financial services. The financial adviser is an expert in the selection of products and services to suit the needs of the client. Additionally, on-going support and advice are provided throughout the term of the financial product.

If you would like a free initial consultation, please contact us or call me on 00 971 (0)50 594 5217.

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