The Importance of Choosing, Qualified, Independent Financial Advisers in Mallorca
You may have read in The Olive Press & other papers about failed investment schemes and pension liberation scams sold to unsuspecting Expats by unscrupulous, “commission hungry salespeople”. It is not my place to name names, nor to comment on the lifestyles of those involved or even how they manage to sleep at night. However, I thought it would be prudent to discuss the importance of choosing the right Independent Financial Advisers in Mallorca.
No need to fear, just be clear
I am amazed at the number of Expats & Yacht Crew who take these con-men’s word for it and do not check credentials and qualifications before parting with their life savings. I am asked frequently, “why do I need to deal with a regulated adviser, what difference does it make?”
But what does it all mean to investors?
Dealing with correctly regulated, well qualified, Independent Financial Advisers in Mallorca is hugely important, particularly in markets such as Spain where un-regulated, high-pressure, commission hungry salespeople (cannot be termed Advisers) still exist.
Think about it for a moment. Would you consult an un-qualified, unregulated Doctor? There are many reasons to ensure your Expat or Yacht Crew Financial Adviser in Mallorca is legitimate, such as:
Qualified Advice
Do you want your house re-wired by an unqualified electrician who was a window cleaner until last month? Thought not, then why would you approach an unqualified Financial Adviser who was a double-glazing salesman last month? Ask you adviser what qualifications and experience he or she has and get proof.
Most real Expat Financial Advisers in Spain originated in the UK system where the qualifications are: Diploma for Financial Advisers (DipFA, degree level qualification), Certificate of Mortgage Advice and Practice (CeMAP, only for UK Mortgage Advice) or the much older and less relevant Financial Planning Certificate (FPC) which was replaced by DipFA.
Protection
Regulated Financial Adviser Firms must be a registered legal entity, they must have sufficient capital adequacy (financial resources), they must have professionally qualified individuals in Advisory, Compliance and Management positions. In addition, the Regulator insists on robust and efficient systems of control and administration being in place. All of this means that you are protected from the firm simply disappearing.
Treating Customers Fairly
This came out of UK regulation originally, but now applies to all regulated firms. What is meant is essentially:
• Advice must be suitable to you as the client given your current circumstances, future objectives, risk awareness (or lack of it), affordability and long-term plans.
• Your adviser must treat you fairly, honestly, appropriately and in a timely fashion.
Cold calling, pressure selling and outright con-men do not Treat Customers Fairly.
What if you need to Complain
Not happy with the advice or attitude of your adviser, need to complain? Well if you are using an unregulated person, Tough Luck! as you have no recourse to complaint, or at least none that will get you anywhere.
Regulated firms must have a robust complaints procedure in place for when things don’t go according to plan and must treat your complaint seriously, investigate it thoroughly and report back to you in a timely way.
Regulated firms must have suitable Professional Indemnity Insurance in place also.
Independence
Is your adviser really independent, or are they simply product salespeople for a Bank or Investment company? True independence means being able to select the most appropriate plan for you from all of the available marketplace. This demands a depth of experience and access to all available providers of insurance, investments and pensions. Ask your adviser if they are restricted in what they can offer.
What should a well-regulated firm look like
I can only comment on myself and Haven Independent Financial Advisers in Mallorca as an example. We operate in Mallorca and our founder Sandy Paterson is a member of the OpesFidelio. Our Regulatory Statement looks like this:
“SANDY PATERSON trading as HAVEN FINANCIAL ADVISERS is a member of OpesFidelio and is authorised to give financial advice subject to contract in parts of the EEA (Excluding the UK). OpesFidelio is a trademarked network of the Aisa Group which includes Aisa Direct Ltd. Aisa Direct is authorised and regulated in the UK as an independent financial adviser for UK retail clients by the Financial Conduct Authority and has permissions throughout the EEA under both directives IMD and MiFID”.
You will find the details of this authorisation in the link below:
AISA Direct Ltd FCA Registration Link
If your adviser does not have something similar proving their regulatory status the walk away.
The Value of Independent Financial Advisers in Mallorca
One last point to make regarding the importance of good advice. A recent report by the International Longevity Centre in the UK stated:
“The results strongly demonstrate the positive value of financial advice for consumers – both amongst those who are wealthy and those who are less wealthy”
They further reported:
“Those who took advice were significantly more likely to save more as well as to invest in the equity market”.
The “affluent but advised” group accumulated on average 17% more in liquid financial assets than the equivalent non-advised group, and 16% more in pension wealth.
The “just getting by” but advised group accumulated on average 39% more in liquid financial assets than the equivalent non-advised group, and 21% more in pension wealth.
Food for thought, don’t you think?
Got a question?
