Choosing a financial adviser in Thailand
Richard Colburn
What value do you place on your financial security?
The task of a professionally qualified financial adviser is to improve your financial security. Professionally qualified financial advisers are required to recommend financial plans that add value.
Here in Asia we meet with expats who have their own personal criteria for choosing whether to work with an exam qualified professional financial adviser. Their reasoning is not always related to their real needs. Here are some of the more common reasons advanced for not wanting to work with genuinely professionally qualified financial advisers.
‘I do my own financial planning and don’t need any help’
For expats who have the knowledge, expertise and time on their hands, then fair enough. But even the most financially astute expat can probably benefit from the savings available by using an investment vehicle from a brand name international financial institution. These investment vehicles give expats access to funds that would often be beyond the reach of most expat investors.
Savings aside, these types of investment vehicle can provide expats with a level of financial security unequalled by any other type of investment structure. You have the peace of mind of knowing that your money is in the safest possible place by being located in a Group 1 OECD International Financial Centre. These locations provide levels of security that exceed by a considerable margin, the levels of security that would be achieved by expats with the same investment in your home country. These types of investment arrangements are only available through an independent financial adviser.
‘I don’t agree with the idea of financial advisers being paid on commission’
Commission based payment is just one form of remuneration in the financial services industry. This particular remuneration basis isn’t just found ‘offshore’ but also in the home countries of most expats. The alternative to commission based remuneration is fee based remuneration. This is a common method of payment for the services of professionals such as accountants, lawyers and other professionals.
With commission based payment, you only pay if you choose to take up the recommendation of your financial adviser. This means that you only pay for quality advice where you see a clear benefit. Try asking an accountant, architect, lawyer, doctor or surveyor to work with you on that basis!
A fee based financial adviser would be billing you by the hour for time spent on the phone with you, time spent reading your emails and sending emails to you as well as communicating with financial institutions and banks on your behalf.
Exam qualified financial advisers would be more than justified in charging 300 or 400 US dollars an hour for their professional services. Most people would be even less willing to pay on this basis for a recommendation that they may not even act on. Remember too that in most South East Asian countries and indeed many expat locations in Asia, the person calling himself or herself an Independent Financial Adviser may have no professional financial planning qualifications whatsoever. In many offshore locations, genuinely exam qualified financial advisers can be quite a rarity.
For those expats that do elect to follow a recommendation from financial advisers, the commission based system is a uniform system. It means that remuneration is the same from clients investing the same amount of money. If a recommendation and the ensuing work necessary to implement the plan happen to take longer than usual to complete, fee based remuneration causes a disproportionately high charge to the client relative to the amount invested. Charging by the hour could mean that professional expat financial advice becomes a privilege of the elite instead of being a vital component of the financial security and well being of expats.
‘Regardless of the method it is too expensive’
Expensive compared to what? Anything purchased in a retail store is probably being sold at twice the price at which is was purchased. Commissions paid for selling property will likely cost up to 6% or more of the sales price and often a hefty tax bill.
The financial services industry is one of the few industries where charges are disclosed clearly and transparently BEFORE making your decision. Charges associated with offshore investment vehicles are among the lowest compared to other industries and deliver tax free gains from investments in the most liquid of assets. In addition, if you have selected an exam qualified financial adviser, your investment comes with ongoing professional guidance without a time limited warranty.
Remember that most people will have more money invested in their financial planning than they will ever see in their bank account.
Professionally designed financial planning from exam qualified financial advisers will deliver what you want, when you want it and how you want it.
It is relatively easy to make an independent check of the professional credentials of someone calling himself or herself a financial adviser.
UK exam qualified financial advisers are eligible to join the ‘Personal Finance Society’. Membership of this body can be verified directly via their website at: www.thepfs.org .
Similar checks can be made of other nationalities calling themselves financial advisers by contacting the financial services professional bodies of their home country.
What value do you place on your financial security?
It’s your money and your peace of mind.
Richard Colburn is a UK qualified financial adviser.
Questions to the author can be directed to 053 839 463 or email us
