Investment gurus are quick to offer their advice – but is it a good idea to manage expat finances without the help of a professional IFA.
On the surface, managing your own money seems a good idea.
But DIY investing is not so much about looking after your finances as transferring risk from your adviser to you.
You are responsible for picking investments and if you lose money, you shoulder the responsibility.
Professionals are regulated for a reason. Regulation involves sitting exams, maintaining professional development and giving clients an opportunity to complain to an independent assessor if they feel they have lost money due to poor advice.
Financial mess
Gurus offer their services as investment mentors, generally to plug the sale of books, courses or seminars.
They are often well-meaning, but they are not regulated professionals, so they can say what they like and then jet off to the next seminar leaving the DIY investor to sort out their financial mess.
Investors often cite the high costs of dealing with a professional wealth manager as the reason they turn their backs on the financial services industry.
Good financial advice is not cheap, but in the same way as lawyers, architects and doctors offer expert guidance, so does an accomplished wealth manager.
The reasons for consulting an IFA are explained by deVere Acuma.
Stepping outside the magic circle
“The adviser must have the relevant and appropriate qualifications and the experience to provide the financial roadmap and the solutions for you to reach your goals,” says the company.
“They should also be backed by the power and strength of a robust organisation. This way they are operating within a structured environment that adheres to the appropriate regulatory requirements, has adequate compliance, has access to all the latest product and market research and news, product launches, plus services and cutting edge technologies.
“It will also mean that the organisation will have established relationships with the top investment banks and be offering a range of products and services that cannot be accessed as retail investors or as do-it-yourself investors.”
Investment gurus can never have this backing or network because they are not regulated, and by seeking a DIY option, investors are also stepping outside the magic circle of professional advice.
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