8 myths about working with a financial adviser – busted

Understanding how to build, manage, and preserve your wealth is the key to achieving the lifestyle you desire, both now and in the future – which is why many people seek help from a qualified financial adviser.

An experienced financial professional can help you make the most of your wealth by aligning your financial plan with your broader aspirations in life.

And yet, there are a lot of myths about financial advisers that might have made you resistant to working with them.

Read on to discover the truth behind eight common myths about financial advisers.

1. Financial advisers charge high commissions and hidden fees

Many people discount professional financial advice because they think it’s too expensive due to large commissions and hidden fees.

While it’s true that the emergence of the offshore financial services sector attracted a lot of sales- and commission-driven young professionals, these days the sector is far more professional.

Indeed, some jurisdictions, such as Hong Kong, have much higher professional standards where commissions are either banned or heavily capped.

Indeed, many financial advisers hold high-quality licenses and charge fees rather than commissions, just like many other professionals, such as lawyers and accountants.

Independent and highly qualified advisers will be transparent about their fee structure and discuss this with you upfront, so there are no unexpected or “hidden” costs.

What’s more, they will have your interests at heart, so their fees are usually lower than you may expect.

2. I don’t need a financial adviser because I know how to manage my money

Perhaps you’re reluctant to pay a professional to do something you can do yourself. Unfortunately, this DIY approach may be a false economy.

What you spend on a financial adviser’s fees is typically offset by the savings or additional gains you make over time, thanks to their expert knowledge and guidance.

For example, if you’re living or planning to live an internationally mobile lifestyle in retirement, a financial adviser can help you create a tax-efficient income and protect your assets. This alone can  result in significant tax savings.

Read more: How to live a tax-efficient global lifestyle in retirement

Additionally, a financial adviser can use advanced cashflow planning software to provide a picture of your financial future. This is an invaluable resource for goal-setting and effective financial planning.

3. It’s hard to find a reliable financial adviser I can trust

If you haven’t sought out professional financial advice before, you might feel uncertain about how to find someone reliable who can meet your specific needs.

Indeed, many people default to approaching their bank’s advisers rather than researching alternative options.

However, a financial adviser who is affiliated with a particular organisation, like a bank, might be prone to recommending their organisation’s products rather than looking more widely for a solution that is in your best interests.

Of course, this will not always be true, but it’s worth seeking out an independent adviser who can offer an open-market solution.

If your financial adviser doesn’t receive a commission for any particular product, there are no conflicts of interest. As a result, they may be more likely to help you find a solution that’s geared towards delivering the best outcome for your particular needs.

Fortunately, the internet provides a rich source of information that could help you find a reliable financial adviser.

Looking for genuine client reviews on websites such as Google Reviews, and seeking out video or written client testimonials, could provide you with a meaningful insight of whether a financial adviser is reputable.

4. I might need a financial adviser one day, but I don’t need one yet

The tendency to procrastinate is human nature. Unfortunately, delaying seeking financial advice could limit the options available to you when you need help most.

Instead, starting early gives you the best chance of achieving your goals.

For example, if you’re an expat living in the likes of Hong Kong, where taxes are relatively low and you have a high disposable income, it’s important to maximise that income while it lasts.

Ensuring that a portion of your disposable income is properly invested on a regular basis, while taking advantage of compound interest over time, may make all the difference. Indeed, this could allow you to accumulate the wealth you need for your dream retirement lifestyle.

In contrast, waiting too long before you seek advice could reduce your chances of achieving your long-term goals.

5. All financial advisers are the same

Perhaps you’ve taken financial advice before, and you didn’t find it beneficial. If so, it might be easy to assume that all financial advisers are the same, so it’s not worth trying again.

However, not all financial advisers are created equal. Finding a professional who is a good fit for your needs is key to achieving the outcome you desire.

You can do this by seeking out an independent financial adviser who has a fiduciary responsibility to act in your best interests. This may not be true of advisers who work for a large organisation, as they usually have a primary responsibility to their employer

Check their credentials. Financial advisers in Hong Kong are required to hold a license with the following three organisations before they can offer a full range of services and products:

  • The Securities and Futures Commission (SFC) of Hong Kong, which regulates and supervises the securities and futures industry
  • The Insurance Authority (IA), which regulates and supervises the insurance industry
  • Mandatory Provident Fund Schemes Authority (MPFA), which regulates privately managed provident fund schemes – your MPF.

An independent financial adviser will only be able to help you with financial matters covered by the licences they hold.

BMP Wealth is proud to hold all three licences, allowing us to offer a comprehensive and truly bespoke service to each and every one of our clients.

6. I’m wealthy enough already so I don’t need a financial adviser

In fact, the more wealth you have, the greater the need for professional advice. That’s because the more assets you hold, the more complex your finances are likely to be.

Indeed, high net worth individuals may be exposed to many types of tax, so careful planning is essential for protecting your wealth.

Equally, if you have a highly valuable estate when you retire, effective estate planning is crucial to ensure that your wealth is passed on in the most tax-efficient way.

7. Financial advisers only want to sell me products

This may be true of some financial advisers, but not all.

The key to avoiding those who offer solely product-led advice is to seek out “financial planners”.

Many financial advisers often provide short-term support to meet a specific need. Meanwhile, financial planners consider the bigger picture, providing a holistic service, taking all your circumstances into consideration, and, importantly, your future aspirations.

Instead of purely transactional advice, financial planning entails identifying meaningful financial goals derived from your broader aspirations in life.

Financial planners will also provide ongoing support over the long term to keep your financial plan on track to achieve your aspirations. This rounded approach caters to a multitude of needs, rather than focusing on selling you a specific product.

8. Financial advice is only for those who have accumulated a lot of wealth

If you’re a high earner but have yet to accumulate the level of wealth you desire, an independent financial adviser could offer huge value.

They can help you build your wealth in line with your short-, medium-, and long-term goals.

For example, a financial planner can offer guidance on how much you need to save during different stages of your life and how long for, if you want to achieve your desired lifestyle in later life.

A financial planner can also help you protect your assets and offer guidance on how to make the most of your investments, such as by diversifying your portfolio to reflect your personal risk preferences

As such, creating a robust financial plan for achieving your goals is just as crucial when you’re building your wealth as when you’ve already accumulated significant assets.

Get in touch

If you’d like to find out more about how we can help you build, manage, and preserve your wealth, whatever stage of life you’ve reached, we can help.

When you work with BMP Wealth, you can be assured that your money is managed safely and securely under strict regulatory guidelines. Read more about our regulatory status on our website.

Please email info@bmpwealth.com or call +852 3975 2878.

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