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Due diligence: The key factor in choosing a financial adviser

Due diligence: The key factor in choosing a financial adviser

If you don’t have a good long-term relationship with your financial adviser, you may not get the most appropriate advice when you need it. If you don’t you could lose money, so do your due diligence.


By The Phuket News

Sunday 17 February 2019, 11:00AM


Not doing your homework on your financial adviser can leave your finances in dire straits before you start. Photo: rawpixel

Not doing your homework on your financial adviser can leave your finances in dire straits before you start. Photo: rawpixel

You need to do a little research like you would when you are buying any product or service. Find several companies preferably by recommendation, then compare them.

If your current financial adviser does not have these traits, then think again;

• understands you, your goals, your personal and investment needs

• has the experience to help you develop and maintain a financial plan designed for you which continues to be relevant over the time of the relationship

• can offer guidance when required. If you ask a question, are they able to provide you with the full technical answer?

• has experience and qualifications in financial services

• offers market updates, and can keep up to date with industry standards, changes and product changes.

Your adviser should be local, with a track record and good references, has a local firm, is recommending appropriate investments, explains how and what they are charging and is offering a long-term relationship.

Research yourself and ask questions to should sort out the good from the bad.

• Check their website. Whilst these are easy to set up these days, it should give you an indication of who the people are, where they and the company is based, contact details, their main business, when it was last updated and whether any advertising banners are appropriate to a professional firm. Is the company what they say they are.

• Licensing and regulation. Are they appropriate for the business they are offering? Is the company you are dealing with registered in Thailand? Does the adviser have the appropriate Visa and Work Permit paperwork? If they are offering investment management do they hold an SEC license?

• Investments and platform products. What are the full costs? Who researches and selects funds? What research system do they use to make selections? What qualifications do the decision makers have? Make sure they don’t directly handle client money, this is a major red flag. Have they ever suffered an asset suspension or liquidation? Are they promoting 3rd party or in-house investments?

BRITISH INTERNATIONAL SCHOOL, PHUKET

• Do you like and trust them? Does anyone else recommend them? Is there a bio on the website? Are they a member of any professional bodies? What is their relevant industry experience and qualifications? Are they open and transparent about costs and commissions?

• Fees and commissions. What am I paying for financial advice, investment management, any investment platforms, trusts, etc and what does the adviser receive for initial and ongoing advice. No advice is free even if they claim it is.

• Advice and recommendations. Ask for everything presented in writing giving reasons and fees/charges for the advice. Did the adviser complete a fact find, risk assessment and capacity for loss exercise with you; otherwise how could they have given you the appropriate advice?

• Ongoing support. How often will you see the adviser in the future? How will you see them? Face to face, Skype, phone, email etc. When will you receive investment updates and how regularly? How do you contact them if things change?

There is some research to do and quite rightly as this is likely to be an important financial relationship for you; one which should be simple and largely beneficial, not one which is financially disastrous. This is intended to be a lifelong relationship and you must do the due diligence to ensure you can work with the person you choose.

If you have a current adviser and you haven’t asked these questions before, they should be only too pleased to answer them. If you are not satisfied, then follow the process and find someone better.

– Paul Wyatt


This is the first of six initial monthly articles about financial services. Further topics will also include choosing a financial adviser, UK pensions, markets and currencies, risk and what to watch out for.

Paul Wyatt is Managing Director of AIMS PI (Thailand) Limited, a Bangkok-based financial adviser who worked in the UK pensions industry from 1985 and in Thailand since 2009.

AIMS is a fee-based practice where all costs and charges are clear and transparent, having moved away from the concept of commission based advice, where the cost is hidden. Importantly, investment decisions are totally independent and not based on commission.

If you have questions or need advice, email paul.wyatt@aimspi.com, call +66 (0) 847376036 or visit http://www.aimspi.com/home 

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