(5) Be careful of verbal promises and guarantees of high returns. Never rely on verbal promises from your FA or its representative. Anything that sounds too good to be true probably is. Make sure that you understand what is guaranteed and what is not, and insist on written confirmation from your FA on any guaranteed returns or benefits.
This advice, and other useful tips, can be found in this webpage:
http://www.moneysense.gov.sg/publications/guides_publications/Consumer_Portal_FAAGuide.html
What do you understand by 'fit and proper'?
ReplyDeleteIn the FAA, a fit and proper adviser is a person who is honest and ethical and competent. The FAA doesn't mention that person must be caring and sincere. I am sure you often hear so and so is a sincere and caring agent. My advice is NEVER use such a person because he or she can be more destructive and damaging than a dishonest agent.The damage is more subtle without either party knowing it or the trusting customer can be completely ripped off without knowing it.
Without HONESTY AND COMPETENCE there is no possibility that customers get responsible advice on
a REASONABLE BASIS.
What is reasonable basis? It means
what qualified fellow financial advisers would have recommended in given and similar financial circumstances of the client. It means all fellow practitioners' recommendations have certain degree of consistency and not what insurance agents always make the dangerous statement that there is "no right or wrong" recommendation. (does it mean any recommendation is right?)
The next time you engage an adviser make sure that he or she is competent and qualified with some decent certification. The most accredited one like CPA or CFA is CFP. You should be confident and feel safe to work with a person with CFP for he or she is trained all round in personal finance.Their approach is need based and no product selling and pushing. Should you find the approach deviating from his or her training you can lodge a complaint with the regulating society, FPAS..
The most important trait an adviser must have is HONESTY and without which nothing will be right.
It serves you well to ask about your adviser's qualification and understand it.If an adviser lacks the necessary qualification it shows the incompetence and it also shows he or she is NOT INTERESTED to give you the best and selling is all they know. This is the first step in the advisory process to establish mutual respect and trust.
It is your right too to ask any question of the adviser. If the adviser displays 'taichi' when asked questions you can terminate and forget the relationship.
Go to http://www.fpas.org.sg to learn of your rights to ethical , competent and responsible financial planning.
It is quite interesting to examine this question.
ReplyDeleteQ: Does MAS regulate all financial planners? What is the difference between a financial planner and a financial adviser?
A: " MAS regulates firms and persons that give advice on investment products to consumers. MAS does not regulate tax and estate planning activities.
Under the FAA, only firms licensed as a FA and firms that are exempt FAs can use the term "financial adviser". This helps you identify whether you are receiving financial advice from an entity regulated by MAS."
"MAS does not restrict the use of titles such as "financial planner", "financial analyst" or "financial consultant". You should be aware that persons who use such titles may or may not be regulated by MAS"
This is dangerous
Because MAS doesn't regulate the titles many insurance companies have given titles to their insurance agents that don't reflect the work they do. It is free for all. As a result there are companies that give titles like life planner, financial planner, financial consultants, advisers and so forth.The consumers are inundated that they are so confused and wonder which is which.What they don't realise is that these people are actually wolves in sheep's clothing.
My take is all these insurance agents masquerading under such titles are nothing but salesmen and women.The insurance agents have not died but have assumed another name or donned sheep's clothing.
It is interesting also to note that one company which recently underwent management change has given their salesmen and women fierce titles like financial consultant to senior financial consultant to executive financial consultants. I have no criticism if these former insurance salesmen actually do and consult on financial matters but these agents are no where near what their titles suggest.At the best they are salesmen.You can call them senior insurance salesmen or executive salesmen. At the worse they are nothing but product peddlers, pushers and traffickers.
This is blatant misrepresentation to hood wink the consuming public. If it is not cheating what do you call it? Certainly it is cheating, claiming what you are which you are not competent.
MAS must regular and control the use of titles before the consumers are beguiled into believing that the salesmen and women they are dealing with are actually competent in financial matters.Before more get hurt financially MAS must set some rules on this so that the public is clear about who are they dealing with. I am not surprised there is someone out there who has a title "financial doctor" and self
confer a DR. before his name.