Dubaiadvisors

If you're a British expat, resident in the UAE, you're certain to have received at least a cold call from a very friendly"financial adviser", offering you a free financial review or maybe they could make you some fantastic returns with their"exclusive" investments.

Whether you've already used an adviser, or avoid them like the plague, we aim to emphasize some points which you need to keep an eye out for when contemplating whether to employ a financial adviser in Dubai to look after your UK pension.

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Let us first take a look at what financial advisers should really do.

The function of a Financial Adviser would be to analyse your existing financial conditions, determine your objectives and aims, then present a budget to set you on course to achieving your objectives. Part of this financial plan is very likely to involve the recommendation of a financial product to ease you attaining your goal. Financial advisers must always act in your best interests and recommend products or services that meet your objectives, objectives and needs.

By way of instance, you meet a financial adviser, discuss your current conditions and your future goals and objectives. The advisor then goes off and does his research and recommends a savings product that can allow you to accomplish your future retirement goal. You complete the paperwork for the savings product and commit to paying a specific amount every month until you retire.

Commission paid to Financial Advisers

In the majority of instances, the adviser will be paid a commission in the company that provides the savings product. No matter how the commission is very rarely disclosed to the client.

The majority of financial advisers in the GCC are remunerated by commission only. It follows that they only make money if you get a financial product through them. This also suggests that they only often recommend products that pay them commission, but not necessarily the one which is most appropriate for you.

This present structure therefore makes a conflict of interest. How can they provide impartial advice that's in your best interests, should they only earn a living by selling you something? They are unlikely to recommend the best products for you if it does not cover them commission, or unlikely to inform you that you don't require any of the products that they market.

Here's the Normal commission paid for its most common financial products offered by advisers:

A regular savings plan

The typical commission paid to the adviser for this sort of strategy is 4.2percent of the total premiums due over the period of the coverage. For example, let's say you've committed to paying #1,000 a month into the savings plan over the next 25 years.

#1,000 x 12 (months) x 25 (decades ) = #300,000 total premiums due over the term of the policy

The commission paid for this would be 12,600 (4.2percent of 300,000).

A lump sum savings program (often held in Your SIPP or QROPS)

The normal commission paid on this sort of strategy is 7% of the premium paid to the policy. For example, let us say you have moved your pensions worth #150,000 into a SIPP, which is then paid into a lump sum savings coverage (such as an offshore investment bond, that is totally unnecessary from the way).

#150,000 x 7% = #10,500

The commission paid for this could be #10,500 (advisers could make even more commission from the investments inside these coverages, but that's for another article).

This commission is paid as soon as the first premium enter your coverage. Once it is paid, there is generally no obligation or incentive to get your advisor to provide any continuing service or guidance, they have made the sale and they usually move on to their next client. After all, they do not make any money unless they make a purchase. Not all advisers will have this mindset however.

Do they maintain any (meaningful) Qualification

Most financial services qualifications are provided by the Chartered Insurance Institute (CII) and the Chartered Institute for Securities and Investments (CISI).

There is currently no minimum qualification level for financial advisers from the UAE. That means in practice, everyone can work as a financial adviser in the UAE without completing any suitable training or qualifications.

Here is a list of a few of the most Frequent qualifications:

QCF Level 3 -- equivalent to A levels

International Certificate in Wealth & Investment Management (CISI)

QCF Degree 4 -- equal to the first year of a university degree

Diploma in Financial Planning (CII)

QCF Level 6 -- equal to a Bachelors degree

Advanced Diploma in Financial Planning (CII)

Private Client Investment Advice & Management (CISI)

You can check the member register for Both of These bodies :

The Chartered Institute for Securities & Investment: https://www.cisi.org/cisiweb2/cisi-website/join-us/cisi-member-directory

Regulation of Advisers in the UAE

In the UK, financial advisers are regulated by the Financial Conduct Authority. They ensure advisers follow a rigorous set of guidelines and principles and have strong enforcement powers to ban and attract criminal prosecutions on advisers.

If a client is unhappy with the service from an advisor, complaints they can not settle can be obtained to the Financial Ombudsman Service, an external dispute resolution services. They could enforce the advisor to pay compensation to customers of around #150,000.

This pays reimbursement if authorised financial services firms collapse.

In Dubai there are 3 primary financial services regulatory bodies that oversee financial advisors:

You are able to assess their register of companies : https://www.dfsa.ae/Public-Register/Firm

The UAE Insurance Authority - There is no external dispute resolution service without a compensation scheme in place. You are able to assess their register of companies here: https://ia.gov.ae/en/services/registered-insurance-companies-and-related-professions

You can assess their register of companies here: https://www.sca.gov.ae/English/Opendata/Pages/financialservices.aspx

Summary

So, Should You feel as you need advice from a financial advisor in Dubai, then you may want to follow these steps to Make Certain You are receiving unbiased and dependable financial information:

Before your first meeting, or at the very first meeting if this is free of charge, you should discuss your requirements and agree a fee for the information. You might initially only wish to pay a predetermined sum for a fiscal review. If you then subsequently feel you would like additional advice, or even ongoing advice, you can agree a fee for this with all the advisor. You could either pay them a fixed amount each month, or a proportion of the value of your investments. As an outcome, most advisers in the UK will charge between 0.75% to 1 percent of your investments annually for ongoing advice and this normally covers all areas of financial planning such as ISAs, Pensions, Life Insurance, Inheritance Tax Planning etc.. In the event the financial advisor will only be providing ongoing advice on your retirement, maybe you may wish to pay less for this. As part of the discussion, you should also agree on the continuing service you're going to get. Can it include monthly, quarterly or yearly meetings such as?

Ask about specifics of the regulatory authority which they are a part of and what compensation and dispute resolution schemes are in place. Addressing a controlled adviser should provide you with protection in the event that something goes wrong and you need to make a criticism. Regrettably however, some regulatory bodies are not as rigorous as others, so even this sometimes isn't enough.

Ask the advisor for evidence of their business qualifications. This should ensure they have the necessary knowledge and experience to have the ability to supply you with qualified financial information.