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Anonymous

07 Mar 2021

Insurance

How do I go about finding a reliable financial advisor?

I have no insurance coverage or investment plans at all (27y/o this year, been working for close to 4yrs) and am looking for a solid FA to speak with candidly.

What are some die-die must know tips (or red flags) when prospecting for potential candidates? (Complete newbie here)?

But, having never dealt with finances before, I am completely new to all this and am afraid of getting scammed/taken advantage of due to my lack of knowledge.

Also, is anyone able to advise which agencies/companies are reputable ones in the industry right now? Not sure if that might help me...

Thanks in advance!

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Elijah Lee

07 Mar 2021

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

I'll list a few factors that you can take into consideration. But first, let's see how you can find a financial advisor

  • Ask your friends - This is something that is very simple to do. Just ask your close friends if they know of a financial advisor that they have worked with, are happy about the quality of advice as well as the ethics of their advisor, and are open to sharing the contact; often, you should be able to get a few names from your friends, and then you can contact the advisor. This is akin to asking a friend if he/she can recommend a good restaurant for say; Japanese food. I'm sure that will lead to some good recommendations to dine at.

  • Social media - You can look for financial advisors online through platforms such as Facebook or Seedly (probably why you are posting this question). You can read and evaluate their responses to questions, this can tell you something about the way they approach financial planning, as well as to some extent, their knowledge, styles and ideals.

  • Look online - A simple Google search will reveal financial advisors who maintain blogs etc, which you can then explore their sites to find out more about them

When you meet them, (virtually or face to face), it'll be where you can communicate with them. Humans are wired to talk to other humans, else society would have a hard time existing. Let's talk about how to evaluate them when you speak to them.

  • It starts with you - Yes. That's right. You need to pick up some basic financial knowledge about financial planning yourself as well (just the really basic stuff like cash flow, purpose of insurance, etc, not advanced technicalities like mortality tables and such).

This works in a few ways; firstly, you need to know how financial planning works, so that when you speak with a financial advisor, you are able to speak the same language, and we'd be able to understand you better and your needs. Secondly, by picking up some basic knowledge, you know you won't get taken for a ride, and you'll be able to judge when talking to an advisor if he/she has the in-depth subject matter knowledge and yet is still able to distill complex financial concepts into easy to digest bits. Lastly, by having some financial planning knowledge, you will be able to better understand your own needs and requirements, and you'll be able to have that red flag pop up if you sense you are being taken for a ride.

  • Trust but verify - This involves you talking to a financial advisor to share your situation, what you are looking for, and getting his/her views on what solutions may solve your problems (in this case, your need to get coverage as a working adult, as well as your intention to formulate a strategy to get started on investing)

Trust that the advisor is giving you advice that is meant to benefit your situation, but also ensure that if in doubt, verify by getting the advisor to justify why he/she is recommending this or that product. For example, a competent advisor should be able to explain from start to end the importance of insurance; the type of insurance suiting your scenario; the types of solutions that may meet your needs, and why he/she selected a particular plan.

  • The connection - This is almost impossible to gauge until you have spoken with the advisor. As I mentioned, humans are wired to talk to other humans, we do not live as an island. Your advisor should be able to relate to your situation (showing empathy) but also be there to advise you if certain things that you are about to do will lead to financial ruin. We're here to provide perspectives, but ultimately the client must decide the course of action he or she wishes to take.

You must also be comfortable to share your situation down to the details with your advisor, as our advice is based on what you tell us. If you told the doctor that you had a severe stomach ache and that you ate days old sushi beforehand, it helps the doctor narrow down the possibilities to perhaps include parasites in sushi so that he knows where to look. If you didn't mention the sushi, there are probably a ton of things that can cause a stomach ache, and the time the doctor spends to investigate is time that is not spent addressing the problem itself. Yes, it may be embarassing to admit that you ate spoilt sushi but delays could have an impact on your life, and you will lose precious time. In the same vein, provide too little or even wrong information can have an impact on your financial health eventually, and by the time you realise this, time has passed you by.

Now, I won't be talking about which agencies or companies are reputable. Ultimately, it is the person you are talking to that matters, and that person can be from any company or agency. While being an Independent Financial Advisor has allowed me the option to distribute multiple financial products from numerous financial institutions as well advise on investments including stocks and shares, this does not meant that there aren't good tied agents out there as well.

But more often than not, IFAs can usually provide a more holistic advisory service, beyond just insurance. And over time, as more trust is built, clients also share their knowledge with me in return. I have picked up property tips, miles hacking, renovation tricks, etc from my clients who are more well versed than me; it is precisely this win-win thinking that helps both sides.

Your advisor is here to walk the journey with you, so ensure that you select someone you are comfortable to work with for a long time. As you are still young, your financial needs will evolve and what better way to get advice than to return to the advisor who already knows you from when you started working with him/her? I have seen clients go from being single to getting married, buying a house, and starting a family, and there is this sense of satisfaction in seeing them progress in life, all knowing that in my pool of products and services, I had the power to ensure that people have a peace of mind that breadwinners and their loved ones are protected from catastrophic financial impacts, parents can fund their children's education, portfolios are growing over time for investors and clients can retire in confidence.

I hope this helps bring some clarity to you. Good luck!

JeffreyLeeZQ

07 Mar 2021

Writer at Jeffreyleezq.com

I would suggest trying out with MoneyOwl. Their agents are salaried and don't operate on a commission basis, so you won't get that kind of "pushy" agents or agents that might put their commission over your financial interests. I also got some of my insurance policies with MoneyOwl.

Insurance wise, I would suggest you look into Term life plans, since you should aim for highest coverage with lowest cost. I would say if an agent starts off with introducing you whole life plans or investment-linked plans without giving you a proper (and comprehensive) financial assessement first, it is a big red flag.

Investment wise, I would suggest you read up a little bit yourself first (if you wanna know where to start I would suggest you read up on Passive Index ETFs). I have also written a blog post before (a few months back) on how my good friend and buddy started investing with only $5k. You can read it here if you are interested: https://www.jeffreyleezq.com/post/how-my-buddy-...

All the best man.

- Jeffrey (jeffreyleezq.com)​​​

Pang Zhe Liang

07 Mar 2021

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

To begin with, check with your first degree contact, e.g. relatives, friends, or someone whom you kn...

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