Posted on: 4th Sep 2015
There’s really nothing more disconcerting than the thought of putting your faith and trust in a financial adviser only to be given the kind of advice that does little other than steer you in the wrong direction. Nevertheless, this is exactly what happens to thousands of people up and down the UK everyday who unfortunately made the wrong decision when it came to choosing their own financial advisers.
Five of the most common warning signs that you may in fact be getting bad financial advice:
First of all, it may sound rather personal and even a little cheeky to inquire as to how your financial adviser is paid, but it is also in your best interests. The reason being that if your adviser works primarily for commission as opposed to a standard pay rate salary, it is extremely likely that their first priority is closing the deal for their own benefit while the best interests of their clients come second. It is therefore a good idea to be very wary of those working purely for commission.
Overly High Returns Promises
It’s one thing for financial adviser to give you confidence in a decent rate of return, but it’s something else entirely for them to promise you returns that are suspiciously high. The simple fact of the matter in this instance is that high returns always have and always will mean much higher levels of risk. Overly high returns simply cannot be guaranteed and even where they are possible are accompanied by the kinds of risks you may not wish to take.
Reliance on Pedigree
Never forget that all the qualifications, certification and experience on paper do not necessarily add up to a world-class or even an above board financial adviser. Professionals working at the highest level can still be unscrupulous even if they qualified from the most impressive universities in the world and have impressive affiliations with others at a similarly high level. Pedigree does not mean anything unless they have the track record and honest approach to back it up.
No Clear Focus
Try to bear in mind at all times that there is no such thing as a financial adviser that can specialise in every single area of finance at every single level and with the interests of every single person in the world in mind. Think of it this way – the world’s leading cardiologists do not also tend to be part-time dentists and paediatric orthopaedic advisors. Instead, they limit what they do to a single specialist area and become the very best they can be therein – exactly the same kind of logic being adopted by the best financial advisers.
No Sign of Progress
Last but not least, if you have been with the same financial adviser for several years or even a couple of decades and things still do not seem to be heading in the right direction, you might want to think about walking away. It’s not as if they can guarantee any kind of fame and fortune overnight, but if you are constantly fobbed off with the same excuses that things will eventually turn around, it’s clear that the advice they have given you to date does not seem to be doing you any favours.