Why use a regulated adviser?

At www.whichfinancialadviser.com, we are often asked: Why is it so imperative to receive financial advice from a regulated financial adviser?

We respond back by asking a counter question: Would you use an unregistered doctor, dentist, lawyer, or any other professional? Absolutely not, right? So when it comes to money, don’t go for casual financial advice.

Beware of scams

Of late there have been a lot of media reports in the UAE about investment scams, in which unregulated advisers had fled the country after defrauding a number of investors.

Whether it is through cold calling or spamming, consumers are often targeted by such fly-by-night firms, which falsely claim they are the best in ‘investments, mortgage advice, and the like’.

Apparently, their sales pitch looks tempting, but this can cost you dearly!

Why use a regulated financial advisory firm?

There are various reasons why you should receive advice by a regulated adviser. We describe the four key ones:

1. Peace of mind

Taking the service of a regulated firm gives you peace of mind. This is simply because such a firm will never flee with your money.

Since a regulated firm is a legal and registered entity, it is mandated to have an adequate capital base, qualified team of advisers, and necessary controls and systems to take care of their clients’ financial planning needs.

2. Treating customers fairly

Regulated firms are obliged to follow the rules laid down by their governing body. This necessitates advisers to give advice that is fair and appropriate for each client’s needs.

3. Qualified practitioners

All regulated firms are bound by rules to hire qualified financial advisers only. The advisers are also required to gain new knowledge, and develop personal qualities through Continuing Professional Development.

Don’t hesitate to check your adviser’s credentials to ensure your wealth is in competent hands. You can also ask their qualifications level – some of the well known professional bodies include the Chartered Insurance Institute (CII), Chartered Investment Securities & Investment (CISI) and the London Institute of Banking Finance (LIBF).

4. Right to complain

Taking the service of a regulated firm enables you to ask for redress from the authorities in case you have lost money due to the wrong advice, or if you’ve been mis-sold an investment product.

You can first approach the internal complaints handling procedures that all regulated firms have. If still unsatisfied, you can approach the regulator which will examine the matter to ensure you get justice.

Nigel Sillitoe from Insight Discovery, the firm behind this website, says ‘if people receive unregulated advice they are leaving themselves wide open to unsuitable investment solutions, no protection from local regulators and could potentially lose all of their investment value with no recourse for compensation’

Nigel Sillitoe also recommends ‘be wary of so called experts, who often blog and criticise advisers and product providers. They often don’t live in the region, are not regulated and might have a vested interest for being so critical!’

These comments are for “information only” and must not be treated as giving financial advice. We always recommend that you seek independent financial advice before making any financial decisions.

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Professional bodies

Investment management and insurance companies

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Professional bodies

Investment management and insurance companies

Consulting firm

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