People generously use the term financial planner and wealth manager as and when it pleases them. However, in reality, both are quite different terms and both professionals work for different objectives.
Whether you should choose a financial adviser or a wealth manager depends on a number of factors such as what investment or financial product you are looking for and what are your financial goals.
So how wealth managers and financial advisers differ?
Professional financial advisers carry out a ‘fact find’, which means they ask you detailed questions regarding your circumstances, your goals and how much risk appetite you have or are prepared for with regards to your investment.
Based on your risk assessments and other related factors, they may they recommend financial products that are suitable, and of course affordable, for you.
Wealth managers, on the other hand, focus more on the comprehensive money management of high-net worth clients.
Types of advisers
Wealth managers and advisers in the UAE offer services ranging from general financial planning and investment advice, to more specialist advice, such as the suitability of a particular product. The services offered are often dependent on who they are regulated by within the UAE.
Some financial advisers are ‘independent’.Independent Financial Advisers or IFA offer investment advice to their clients on the full range of investment products from the market or a specific market segment. IFAs, as the name suggests, consider products from all service providers or firms.
Opposite to IFAs are advisers who offer ‘restricted’ service. Restricted advisers offer exactly that, restricted advice. This the range of investment products or service providers they look for is limited or restricted.
What are the benefits of getting advice?
It’s no secret that if you are looking for any financial advice or investment product, it should be tailored to your needs and is suitable for your current financial circumstances.
It doesn’t matter much which type of financial adviser you choose. What does matter is whether you have access to a wider range of realistic investment choices.
Is it cheaper to buy without advice?
An important thing to remember is if you invest without getting financial advice, you don’t need to pay for the advice fee. However, a major risk associated with you investing or buying a product without a professional financial advice is that the investment or the product could turn out to be unsuitable for you.
A professional financial advice from a well-regulated firm or a professional adviser can help you buy a better product than if you had chosen to invest yourself. A professional financial adviser will also have the expertise and knowledge to find better options, as some products are only available through an adviser.
Also there is no pre-defined timeline of when you should seek financial advice. It all depends on your financial needs, your investment goals, current financial position and your investment approach.
If you’re looking to keep money into bank savings accounts you could weigh options using comparison sites or aggregators. The simple reason is that since products like this are relatively easy to understand, you not require professional advice and you can buy them directly from providers very easily.
If you’re thinking of investing in shares, unit trusts and other investments, you may buy these directly from a broker without taking financial advice. But remember these financial products are not easy to understand. They are different form cash savings products, and by not consulting an adviser, you could restrict the options available to you.
There’s also a risk that you might buy a product that’s not suitable for you because you don’t understand it.So do your homework before investing. Just ask yourself questions, such as can you afford to lose your money? Do you have the time to do the necessary research before investing?Do you have enough investment experience, knowledge or skills?If things go wrong, are you willing to take the responsibility for any bad investing decision?If the answer to any of these is ‘No’ then seeking advice might be your best option.
Insurance or mortgage products
Some insurance products and/ or mortgages can be bought either by using price comparison websites, or directly from suppliers.
However, you could also speak to a specialist broker who will present before you a range of options and might be able to get you a better deal. It’s up to you whether you buy with or without advice.
Find a wealth manager or financial adviser
If you think that a professional financial advice from a regulated financial advisory firm is for you, please continue to browse this website.The website lists all the regulated firms in the UAE and this will be extended to other Middle Eastern countries shortly.