Asked by Anonymous

What are the pro and cons of investing with financial advisors who claim double digit growth or minimally 5% per annum?

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  • Andrew Fong
    Andrew Fong, Associate Partner at St. James's Place Wealth Management
    Level 3. Wonderkid
    Answered on 19 Nov 2018

    Just 2 questions:

    1. Is the person a licensed representative of a Financial Advisers?

    2. 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.

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  • Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund
    Level 6. Master
    Answered on 25 Jan 2019

    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.

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  • Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    Level 6. Master
    Answered on 24 Jan 2019

    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!

    https://www.facebook.com/luke.ho.54

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  • Dwivid Sharma
    Dwivid Sharma
    Level 3. Wonderkid
    Answered on 20 Nov 2018

    Hi there,

    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

    Cons:

    1. People start follow tips blindly
    2. People start get greedy
    3. People get cheated with fake financial experts
    4. People stop learning regarding market movement

    Pros

    1. For a learner it can help to learn how they are doing those analysis
    2. Authenticate expert can help to maximise your profit.
    3. Low risk of capital
    4. Well planned investment idea

    Here I am sharing a list of financial advisors to make you search easy.

    1. Fool.sg

    2. drwealth.com

    3. valueinvestasia.com

    4. mmfsolutions.sg

    5. avallis.com

    6. chartwell-associates.com

    7. dollarsandsense.sg

    8. elpis.com.sg

    9. cornerstoneplanners.com

    10. chartwell-associates.com

    11. genriver.com

    12. grandtag.com/en

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  • Loo Cheng Chuan
    Loo Cheng Chuan, Founder at 1M65 Movement
    Level 6. Master
    Answered on 07 Nov 2018
    • I cannot answer the question without knowing who these financial advisors are. However, I will be very skeptical of someone who claims to be able to provide double digit growth with minimal risk. Do refer to my previous post on the sequence of investment. One should build the financial safety net with CPF first and gradually increase the risk profile of investments and not jump into a high risk investment vehicle or something that you have no idea about.
    • As a rule of thumb, if I am not sure, I will not invest. For example, I do not understand Bitcoin and I chose not to invest in it. Looking back, it was the right decision for me.
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  • Yixiong Chang
    Yixiong Chang
    Level 5. Genius
    Answered on 05 Nov 2018

    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?

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