I arrived in the UAE six months ago from Australia and now earn substantially more than I did back home. This means I have spare cash to invest but I do not have the financial know-how to make the right choices. I have been approached by a number of financial advisers who claim they can help me. However, I am unsure which company is right for me and I have had heard bad stories about some companies. How do I spot a good adviser from a bad one? NM, Abu Dhabi
The expert advice:
Andrew Prince, financial planner at Acuma Independent Financial Advice
In highly regulated jurisdictions like Australia, America and the UK, the risk of picking a poor adviser is greatly reduced, plus there is a prescribed system of redress; however in the UAE, it is much harder. The good news is that within the next couple of years, we should see significant improvements in the quality of advice and regulation that supports it.
In the interim, here are 10 checks to sort the wheat from the chaff:
1. Asking friends and colleagues for personal recommendations
2. Meet two or three advisers to see who you feel most comfortable with. Remember, appointing an adviser involves entering into a relationship where you are going to share personal information, aspirations and dreams, therefore it makes sense to ensure you can trust them.
3. Some companies only have one licence, which means the solutions offered will generally come from a restricted range of providers. While this may be adequate for your needs initially, can you be confident that this will be the case going forward? So ask the adviser how many licences the company they represent holds.
4. Does the company have experienced advisers from your home country so that they are familiar with the intricacies of your home jurisdiction, in your case the superannuation? Better still, does it have offices in your home country to continue with the advice process once you go back?
5. Ask how long they have been practising and what qualifications they hold.
6. Find out how long they have been in the UAE.
7. Can they provide references/testimonials or introduce you to happy clients?
8. Find out what their job description is on their visa. This will identify if they are practising here legitimately and also, you want a financial adviser giving you advice, not an "office manager".
9. LinkedIn can be a good source of research to substantiate an adviser's history.
10. Above all, trust your instincts and don't be pressured into making a decision. If the adviser has your best interests at heart (and they should), they will ensure that everything has been explained to your satisfaction so that you may make an informed decision.
The reader’s advice:
Stephen Jones, Dubai
I have gone through four financial advisers over the last 12 years so I understand your concerns. The first adviser rocked up in a Porsche, bragged about his properties on the Palm then sold me an investment plan that locked me in for 25 years. Two more advisers then made the situation worse and taught me a valuable lesson – to only invest in products you understand. The adviser I have now is someone I spent a lot of time getting to know before I let him near my money. He is helping me right the wrongs of the past – but my top tip would be to do your homework. Read the terms and conditions fully and quiz the adviser relentlessly on the fees and penalties if you want to take your money out. When it comes to finding the right adviser, avoid the cold callers altogether. Instead rely on recommendations and trust your gut. If the adviser seems dodgy, he probably is.
The next money clinic:
The markets are up and down at the moment and the investment world feels a still unstable. So is now a good time to get back into gold? MM, Dubai.
Every three weeks The National features a reader’s personal finance problem. If you have an issue or would like to suggest a solution for another’s reader’s concern, write to pf@thenational.ae
The advice provided in our columns does not constitute legal advice and is provided for information only.