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Bad financial advice can be devastating. Here are five key points to consider when selecting a financial planner.
Many of us have heard the shocking stories of people losing their life savings to unscrupulous individuals posing as wealth managers. Unfortunately, the standard of offshore client protection still falls short of the strict regulatory regime found in the UK, which has one of the toughest in the world. In January 2018, the tightened MiFID rules in Europe began improving retail consumer protection, but offshore, many companies continue to offer risky, non-compliant products with high commission structures that rip off clients.
A good wealth manager should not only help grow your money but also assist in planning your financial future, protecting your assets, and minimizing tax exposure. An ethical IFA (Independent Financial Adviser) places the client before personal gain, and the right adviser can play a crucial role in long-term financial success. In contrast, a dishonest IFA can lead to devastating financial losses.
Before beginning any investment, you should complete a comprehensive questionnaire about your financial situation, lifestyle, and long-term goals. This should include filling out a risk profile, which helps calculate how long you wish to invest and how much risk you are willing to take for the return.
Funds should be clearly explained and fall within your risk tolerance. A well-structured portfolio should be diversified across various assets such as bonds, cash, stocks, and property, depending on the tax wrapper chosen, which can also offer tax incentives.
Check whether your IFA is qualified to at least a level 3 diploma in financial planning, the minimum requirement to work offshore. In the UK, the FCA (Financial Conduct Authority) mandates that all advisers be level 4 RDR qualified. Chartered advisers have even higher qualifications and can offer a greater level of expertise. Also, consider how experienced your wealth manager is.
A well-regulated firm provides greater retail consumer protection. Companies regulated by bodies such as the FCA in the UK or the FSC in Gibraltar offer excellent client security. Always check the regulatory status of the firm.
Ask how your adviser is remunerated. This should be agreed upon in advance and included in the client agreement.
Your client agreement should specify the fee structure and how often you will meet your adviser—typically 1-2 reviews per year, or more frequently if your situation changes.
Be wary of advisers with direct involvement in the funds they are recommending or those who aggressively push one investment over another.
A skilled financial adviser can be the key to achieving financial freedom, while incompetent advice can lead to significant losses.
Disclaimer: The information on this page is intended as an introduction only and does not constitute advice. Beacon Global Wealth Management accepts no responsibility for losses incurred by acting on the information provided here.
Before you engage us, we’ll get to know you to make sure we’re a good fit in terms of understanding what is most important to you.
After our discovery call, we will summarise our understanding of your current situation and the key objectives which will ensure we're aligned with your goals.
Once you’re happy that we’re right for you, we’ll provide our recommendations and implement them for you. But there’s never any pressure from us to proceed – that’s just not our style.
We will implement your plan, constantly monitor and report on the performance to ensure your private wealth is optimised and aligned with your goals and working for you. Additionally, we’ll provide you with regular statements and a half yearly review to ensure that you remain up to date with any investment or tax changes and that we continue deliver for the long term.
