Asked by Anonymous
Asked on 05 Nov 2018
Just 2 questions:
Is the person a licensed representative of a Financial Advisers?
Is the product licensed/regulated to be sold in Singapore?
If the answer is No to either question, walk away as it just sounds too good to be true and is probably a scam.
Top Contributor (Feb)
What's their track record and what are the underlying instruments? Are the returns guaranteed and if so who is backing the guarantee? Learning to manage your own portfolio would be a better idea. You gain a life long skill and your returns will be much higher as you don't need to account for advisory fees. Btw, 5% pa returns is peanuts and nothing to shout about. Same for small double digit growth.
How did I miss this one?
Being one of those advisors, I can openly answer the question lol.
The answer to that question is that there are no benefits to someone who claims. Obviously if this is true you get to be the successful recipient of those claims. So you can really only create a 'pro' and 'con' list if it is true, which means you need to ascertain truth first.
Confidence is a good start, though it could easily be trickery or misbelief. But it is a good start.
Justifiable confidence next. Meaning that you get them to justify how they plan on accomplishing this. At the very least, they should show you some historical returns and justification for those historical returns being around.
They should also provide measures of safety for your portfolio. How well it's diversified/concentrated and why? How will they value add as an advisor, who is not a fund manager?
They should also KNOW measures of safety for your portfolio. What happens during a market crash, what kind of action would they take or talk to you about? They should also be familiar with the investment product so they can talk to you about how liquid or illiquid your investment is.
They also need to provide you a safety margin of time horizon for your portfolio - if you're trying to make x amount in 15 years, the volatility may imply that you need a +/- 5 additional years and you shouldn't do the investment without accounting for this. (which is why Ive reluctantly turned down some investors with a 5 - 10year time frame - good chance I might not deliver)
They also need to know the Trifecta. Buy/Sell/Hold.
Stuff like that.
If you're assured, go nuts. Even then, the FA might have been a pretty sweet talker (though someone with that kind of technical knowledge rarely is). But most likely, the pro will be that you get what you want.
Well. Wait no further. XD You can drop me a message!
Investing on advice of financial advisors is quit risky to assume. But if you are taking investment advise from authenticated advisor. It may be a good choice to make good money with low risk of capital. But it is really hard to find some good financial advisor if you don't know where to find them.
Moreover if we talk about pros and cons then as per my experience here are some
Here I am sharing a list of financial advisors to make you search easy.
Top Contributor (Nov)
Well from just what u have written, the Pro is that u are able to achieve very high returns.
Cons: Not sure, no info on what the investments are. Is there a lockup period?
On the other hand, u will need to be wary of such claims. Even if it did achieved in the past, doesnt mean it will achieve in future. There can be no guarantees of 5% in the market (anything above riskfree rate).
You might want to read the terms carefully; Are there written guarantees; what are your recourse if things turns sour; What is the credit worthiness of the said FA and the investments?