Expats do not trust financial advisors - Expatriate Finance Dubai and UAE
Published by Dubai Expat October 25th, 2007 in Living, Moving, News, People, Work.According to a recent study by Zurich International Life, over 70% of expats do not rely on or trust financial advisors for their investment, savings and retirement planning, even though most (over 68%) start planning their retirement as early as (age) 30 or below. The most likely to listen to a financial planner’s advice are expats from the Indian sub-continent (16%), followed by Western expats (12%) and lowest for Arab Expats (2%). Gulfnews reports:
“I am sure there is a host of reasons - it could be market penetration, personal preferences, or location. But one thing is for sure: expert financial advice is absolutely crucial in ensuring that people make the right decision,” said Paul Haran, regional director for Zurich International Life.
About 31 per cent of those based in the UAE recorded savings and investments as their top priority, while 25 per cent stated children’s education as their main concern.
People are right not to trust financial advice in the UAE. I was an ex-pat there for four years working in advertising. I took some really bad financial advice and put my savings in completely the wrong package for my needs, because that package offered the biggest commission payback to my advisor (I now know). I could not touch my money for 10 years, and believe it or not, my Old Mutual investment, after 10 years, is now worth nothing. I lost everything I invested with them. I feel really cheated, and am now going to try and find the name and the company who misguided me so that I can discredit them on as many forums as possible and hopefully help others avoid the losses I encountered from being pushed by one of the so called professional investment advisors in Dubai. If you have a bad gut feeling, go with it! I wish I had.
The biggest problem with financial advisers is that most of them are paid on straight commission, so they push the product that pays them the most.
I know from personal experience. I thought about charging a fee, but didn’t know how to make the transistion from commission based to fee based.
The best advice comes from following fundamental basics. Most people skip this step when investing.
I an a Uk Trained IFA who has come over to Dubai recently. Unfortunately, I have found that people here do not seem interested in paying for their advice, like in the UK (and how long has that taken and we are still not there even now!!). so the only way to get paid is via the commission route. There are good advisers out here, but there are also some bad ones too, who are selling inappropriate products to unsuspecting clients. Example of which is 25 year savings plans to some one who may only be here for 10 years max. I can only say that make sure when discussing your needs that you feel comfortable with the adviser concerned and that he is qualified to give you advice, as some of them out here have no financial services experience at all !! I am not saying that this will cure all problems but it will go some way to helping.
Paul Frame
ACUMA Wealth Management
Dubai
Tel 971 4 3328582