Are you tired of feeling like you’re not in control of your finances? Do you want to make informed decisions about your money and plan for a secure future? If so, independent financial advice may be the solution you need.
Independent financial advice is advice provided by a professional who is not tied to any specific financial institution or product. This means that they are free to provide objective and unbiased recommendations based on your individual needs and goals.
So as not to confuse the term ‘Financial Adviser’ which is reserved for financial institutions licensed and regulated by the Monetary Authority of Singapore (“MAS”) with the ‘Financial Adviser Representative’ (“FARs”) who are the actual humans that we receive financial advice from, for the rest of the article, we will refer to FARs as ‘Financial Consultants’.
Unlike financial consultants who work for banks or other ‘tied’ financial institutions, independent financial consultants are not incentivised to sell specific products or services. This allows them to provide tailored advice that is in your best interest, not the interest of the institution they work for.
There are many benefits to seeking independent financial advice, including:
Independent financial consultants take the time to understand your unique circumstances and goals before providing recommendations. This means that the advice you receive is tailored to your specific needs and situation.
Independent financial consultants have access to a wider range of financial products and services than advisors who work for specific institutions. This means that they can provide recommendations that are not limited by the products and services offered by a specific institution.
Independent financial consultants are not incentivised to sell specific products or services, which means that their recommendations are objective and unbiased. This can help you make informed decisions that are in your best interest.
Independent financial consultants are held to a higher standard of transparency and accountability than advisors who work for specific institutions. This means that they are required to disclose any potential conflicts of interest and provide clear and transparent information about their fees and services.
Finding the right independent financial consultant can be a daunting task. Here are some factors to consider when choosing one:
Look for a financial consultant who has the appropriate qualifications and experience in the areas that are important to you. This may include certifications such as Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Chartered Financial Analyst (CFA).
Check the financial consultant’s reputation and reviews online. Look for reviews from other clients and check their credentials with professional organisations.
Understand from the financial consultant their services and how he/she is remunerated before engaging them. Make sure you understand what services are included in the fee (if any) and what services are not.
Be wary of financial consultants who make unrealistic promises or pressure you into making decisions. Also, be cautious of financial consultants who have a history of disciplinary actions or complaints.
The financial planning process with an independent financial consultant typically involves three stages:
During the initial consultation, the financial consultant will gather information about your financial situation, goals, and risk tolerance. This information will be used to develop a customized financial plan.
The financial consultant will analyze your financial situation and provide recommendations based on your goals and risk tolerance. This may include recommendations for investments, insurance, and other financial products and services.
Once the recommendations have been made, the financial consultant will help you implement the plan and monitor your progress over time. This may involve regular meetings to review your progress and make adjustments as needed.
Independent financial consultants can provide advice on a wide range of financial planning strategies, including:
Creating a budget and sticking to it is essential for achieving your financial goals. An independent financial consultant can provide advice on how to save and budget effectively.
Planning for retirement is important to ensure that you have enough money to live comfortably in your golden years. An independent financial consultant can help you develop a retirement plan that is tailored to your needs and goals.
Investing can help you grow your wealth over time, but it can also be risky. An independent financial consultant can provide advice on how to invest wisely and minimize risk.
Protecting yourself and your assets from unexpected events is important. An independent financial consultant can provide advice on how to manage risk and choose the right insurance products.
Independent financial consultants can help you maximize your investments through:
Diversification and asset allocation can help you minimize risk and maximize returns. An independent financial consultant can provide advice on how to diversify your investments and allocate your assets effectively.
Active investing involves trying to beat the market by buying and selling stocks. Passive investing involves investing in a broad range of assets to match the performance of the market. Both approaches have their pros and cons, and the right approach for you will depend on your individual needs and goals.
An independent financial consultant can help you determine which approach is best for you based on your risk tolerance, investment goals, and other factors.
Minimizing taxes is an important part of maximizing your investment returns. An independent financial consultant can help you develop a tax-efficient investment strategy that takes advantage of tax-deferred accounts, tax-loss harvesting, and other strategies to minimize your tax liability.
Avoiding common financial mistakes is an important part of taking control of your finances. Here are some common mistakes to avoid:
Overspending and debt can quickly spiral out of control and leave you in a precarious financial situation. To avoid overspending, create a budget and stick to it. To avoid debt, live within your means and avoid taking on unnecessary debt.
An independent financial consultant can help you develop a budget and debt repayment plan that is tailored to your individual needs and goals.
An emergency fund is essential for dealing with unexpected expenses, such as a medical emergency or job loss. Without an emergency fund, you may be forced to take on debt or liquidate your investments to cover these expenses.
An independent financial consultant can help you develop an emergency fund that is tailored to your individual needs and goals.
Failing to plan for the future can leave you unprepared for retirement, unexpected expenses, and other financial challenges. To avoid this mistake, work with an independent financial consultant to develop a comprehensive financial plan that takes into account your goals, risk tolerance, and other factors.
Technology is changing the way that independent financial consultant work and interact with their clients. Here are some ways that technology is impacting independent financial advice:
Online tools and resources, such as financial planning software and investment calculators, can help independent financial consultants provide more efficient and effective advice to their clients.
Robo-advisors are automated investment platforms that use algorithms to provide investment advice. Human advisers, on the other hand, provide personalized advice based on their clients’ individual needs and goals.
An independent financial consultant can help you determine whether a robo-advisor or human advisor is best for you based on your individual needs and goals.
While technology can be a useful tool for independent financial consultants, it is important to balance it with human interaction. Personalized advice and support from a human adviser can be invaluable in helping you achieve your financial goals.
Evaluating the success of your financial plan is an important part of taking control of your finances. Here are some steps you can take to evaluate the success of your financial plan:
Setting and measuring financial goals is essential for evaluating the success of your financial plan. Work with an independent financial consultant to develop specific, measurable goals that are tailored to your individual needs and goals.
Your financial situation and goals may change over time, so it is important to revisit and adjust your financial plan as needed. Work with an independent financial consultant to review your plan on a regular basis and make adjustments as needed.
Celebrating your successes along the way and learning from your mistakes is an important part of taking control of your finances. Working with an independent financial consultant can help you stay motivated and focused on achieving your financial goals.
An independent financial consultant can help you celebrate your successes and learn from your mistakes. They can also help you develop strategies for overcoming obstacles and staying on track toward achieving your financial goals.
In conclusion, independent financial advice can help you take control of your finances and plan for a secure future. By avoiding common financial mistakes, evaluating the success of your financial plan, and working with an independent financial consultant, you can achieve your financial goals and live the life you want.
Aside from the regulated use of the term ‘Financial Adviser’, a financial planner is a professional who helps clients develop a comprehensive financial plan that takes into account their goals, risk tolerance, and other factors. A financial adviser in general provides advice on insurance and investment products and helps clients manage their portfolio of insurance policies and investments. Realistically speaking, you should be working with an independent financial consultant who can fulfill both of these roles as you will need someone who can objectively help you plan while also walking the journey together with you.
The cost of independent financial advice varies depending on the financial consultant and the services provided. Some financial consultants charge a flat fee, while others charge a percentage of assets under management. It is important to discuss fees and services with your financial consultant before engaging their services.
Where possible, look for an independent financial consultant who is a Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Chartered Financial Analyst (CFA). These designations indicate that the financial consultant has completed rigorous training and has demonstrated a high level of expertise in financial planning and investment management.
The frequency of your meetings with your independent financial consultant will depend on your individual needs and goals. Some people meet with their consultant once a year, while others meet more frequently. Your consultant can help you determine how often you should meet based on your circumstances.
No, independent financial advice is not just for high-net-worth individuals. Independent financial consultants can provide guidance and support to people at all income levels. They can help you develop a plan that is tailored to your individual needs and goals, regardless of your income.
Remember, independent financial advice can help you take control of your finances and plan for a secure future. Don’t wait to take the first step toward achieving your financial goals.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Jonathan is a Chartered Financial Consultant with more than 17 years’ experience in the financial industry, He is an advocate of purposeful financial planning for young working professionals in Singapore to reclaim financial and time freedom over the really important things in life – relationships, aspirations, dreams, and dignity – by arranging available financial resources to around them.
His corporate role as a product and project manager involves overseeing a dynamic team responsible for developing and maintaining digital advisory support tools and fee-based financial advisory support for more than 400 financial planning practitioners.
