How to Choose Your Financial Adviser in the GCC
With over a staggering 58,000 people working in financial services in the UAE alone, choosing the right financial adviser can be daunting. With your future at stake, it is vital that you choose the right custodian to help navigate the yet to come obstacles.
So, how do you decide who should protect your hard-earned money? Here are the seven most important questions to ask to ensure you make the right choice.
1) How Qualified are They?
Qualifications are essential when choosing an adviser, as they are when choosing any professional to support you. With London being the world’s leading financial centre, the UK’s qualification standards are also recognised as premium.
Be aware, the phrase ‘UK qualified’ is thrown around in the UAE very readily. In my experience, generally, the adviser has a level 3 certificate, which is a single multiple-choice exam that can be completed with less than 50 hours of study.
Anyone providing financial advice in the UK must have at least a Level 4 qualification, most commonly through either the ‘Chartered Insurance Institute’ or the ‘Chartered Institute for Securities and Investment’. This level of qualification needs over 500 hours of study. Senior advisers often go beyond this and achieve Chartered Status (Level 6).
2) How Experienced Are They?
Your financial adviser must understand the local and regional financial markets to provide you with comprehensive advice. The Middle East has specific traits that differ from the global marketplace, and the way people spend or invest their money is often dissimilar to other regions. You should check how long your adviser has been in the region as the longer they have, the more likely they will have a solid understanding of the local rules, regulations, and the complications that may arise when you decide to move on.
3) Who Are They Regulated By?
There are three primary regulators in the UAE for financial planners, SCA, IA, and DFSA. Make sure you are clear about what your adviser can advise you on and what your protection is. Are they independent or a tied agent? Are they regulated themselves or using another firm’s regulation, and what recourse do you have if it’s ever needed?
4) Do They Come Highly Recommended?
As with anything in life, quality gets recommended. Ask to speak to some of their existing clients and check their LinkedIn account. All financial advisers are on LinkedIn! Do they have over 20 recommendations from clients or two from their colleagues? There’s a big difference!
5) Which Services Can They Offer?
An essential element of this question is also what assistance the adviser cannot give you. Some are solely investment advisers and can only provide you advice on your investments. In comparison, other advisers offer complete financial planning around investments and retirement, insurance, education planning, estate planning, and tax planning. Ask your adviser about the services they offer and what in particular is significant within the region. Choose someone whose offerings can meet the specific needs of you and your family.
6) Do They Charge Fee’s Or Commission?
Unlike financial advisers in the more developed countries that have to fully disclosed fees, financial advisers in the GCC can still take payment through commission, which can be quite hefty and most often undisclosed by the adviser. If you hear the phrase “don’t worry, the product pays me, not you,” I guarantee there is a high commission. Who do you think pays the providers that then pays the adviser? Correct, you! Any decent adviser will tell you exactly how much you pay, how much of that they or their company keep, and what you can expect for that. I cannot stress this enough; transparency is key!
7) What Happens Next?
Most expatriates will move to at least one more destination following the Middle East, whether it be somewhere completely new or back to their home country. Without structured planning, you could be left with a significant shortfall in your retirement fund due to the impact of international tax law and also significant differences in living costs. As an expatriate, your adviser must have a detailed understanding of international taxation and repatriation planning.
If you want to learn more about selecting a financial adviser in the GCC, fill in the form below to contact us.
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