Are financial advisers worth it?

Are financial advisers worth it?

Look for someone who knows how to develop a financial plan and execute it with various investment products

Over the last 12 months, this column has offered ideas on how you can start your investment journey.

We also examined different options for income generation.

This is an important exercise because we need to supplement our cash savings and CPF funds with passive income to retire comfortably.

Who should we turn to for advice? Financial advisers?

The New Paper on Sunday contacted Natixis Global Asset Management (NGAM), which recently revealed that Singapore ranks 25th out of 43 countries in retirement security.

Retirement security is about people saving enough funds by a targeted age to maintain their desired standard of living.

7 costly mistakes people make when choosing a financial adviser

Are financial advisers in Singapore up to the mark?

Mr Ted LeClair (Senior vice-president, Client Solutions Group, and director, Natixis Advisor Academy): Yes, the advisers in Singapore I've had the privilege to meet are bright and client- focused.

They demonstrate investment competency and a willingness to continue learning, which are necessary in this dynamic market.

This is where partnering with a firm like NGAM can help as we have resources in the Advisor Academy and our Durable Portfolio Construction platform that help advisers keep improving upon already strong skills.

Ms Madeline Ho (Executive managing director, head of Wholesale Fund Distribution, Asia Pacific, at NGAM): In our latest 2016 Global Individual Investors Survey, where 400 Singaporeans were interviewed as part of the overall survey of 7,100 investors globally, approximately two-thirds of Singapore investors say professional advice is worth the fee.

One key reason for that response is that they think people who have professional advisers are more likely to achieve their financial objectives than those who do not. This speaks of the trust that investors have in their financial advisers and the strength these advisers possess.

What do investors look for in financial advisers?

Ms Ho: Beyond investment performance, the top three things investors would most value getting from a financial adviser are help to make more informed decisions about investments, managing risks, and setting goals and establishing plans.

Mr LeClair: They look for a financial adviser who can understand their financial goals such as retirement and legacy planning and then craft investment strategies to help meet them.

They have to offer more than just investment expertise.

Understanding family dynamics and financial goals have to be the starting point of any financial plan.

It is not just about the money; it is about living life to the fullest.

The most successful advisers are those that can establish trust.

What skill sets should financial advisers possess?

LeClair: Excellent communication skills, an understanding of how to develop a financial plan and execute it with various investment products, and a strong willingness to keep learning and finding new ideas.

The markets and industry are dynamic, so finding good partnerships to help financial advisers stay abreast of the newest and best ideas is critical.

So much that is pitched as financial planning here revolves around insurance with an investment slant. Shouldn't insurance focus on its two key jobs: medical cover and life/critical illness cover?

Ms Ho: Risk management - insuring the biggest asset you have, which is you - should form the basis of any financial plan.

Moving beyond insuring physical health and providing medical cover, there is also a need to safeguard the financial health of providing adequate retirement income.

In this regard, there are other income-generating investment solutions out there besides insurance that you can explore with your financial adviser.


This article was first published on Aug 21, 2016.
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