In your efforts to manage your cash and arrange for financial security, are you sometimes persuaded to buy a product or engage a consultant's services on the basis of claims such as for example:
"This can be the best financial product in the complete industry."
"We are the very best financial services company."
"I am the very best Financial Consultant available."
Such statements are not uncommon in the financial services industry, just how can you decide who to trust or which financial institution to place your organization with? Financial Advisor will end up grappling with this issue once you graduate and start planning your finances or simply nonetheless as you take stock of one's retirement pans.
Why don't we look at these common statements to obtain a clearer picture of what is truth or myth:
1. "IT IS THE BEST FINANCIAL PRODUCT AVAILABLE IN THE MARKET"
There is no one-size-fits-all product in the market. What is suitable for one person may be unsuitable for another. A specialist Financial Consultant should gather information regarding your financial needs and status prior to making any recommendation. You'll expect your physician to prescribe medication only after he has made an analysis, so have exactly the same expectations of one's financial consultant.
Ask your consultant: "On which basis is this recommendation suitable for me?"
2. "THE MORE AWARDS THE HIGHER"
Awards do give a sign on a Financial Consultant's performance. However, do keep in mind that awards are mainly measured by sales performance. Just as a fast food chain that sells the most burgers might not have the best cooks, a Financial Consultant who has achieved a high sales performance might not necessarily be the the most suitable person for you.
Ask your consultant: "How did you be eligible for the awards?"
3. "WE ARE THE VERY BEST FINANCIAL SERVICES COMPANY"
Reputation and branding matter however the key question is how much emphasis you should put on them. Different financial services companies claim to function as best, so that is actually the best? Well, they might all function as best and that depends on the basis of one's measurement, for example, new business sales or assets under management. As being a hospital that has probably the most number of patients does not mean the doctor that you are seeing is the foremost.
Ask your consultant: "Best in what area?"
4. "WE ARE ABLE TO SOURCE FOR YOU THE VERY BEST PRODUCT FROM DIFFERENT COMPANIES"
That might be possible only when a Financial Consultant might have access to all financial products from all finance institutions and the financial products can be easily compared to one another. Unfortunately, like the theory of perfect competition in Economics, this could prove elusive in real life. Major financial services companies still use their very own pool of Financial Consultants because the only distribution channel for most of their products. Furthermore, competing financial products usually have different advantages and disadvantages. Make certain the financial product recommended is the foremost suited for you rather than the one that is most beneficial for the Financial Consultant with regards to remuneration.
Ask your consultant: "How are you currently remunerated for the different options listed in your recommendations?"
When you run into these statements, be sure you ask the consultant to back them up. A good financial consultant will allow you to make investment decisions which are appropriate for your preferences, and these change according to what stage you will ever have you are at.