Sound Financial Advice and Not Traps

12/28/2015 11:33:00 pm


Assalammualaikum my dear loyal blogreaders. 

I am sure all of you must be thinking what happens next after the Forum. I have members of the public asking, to whom can they ask for further assistance in obtaining sound financial advise. Some even raised issues on them having lack of faith in their current financial adviser due to investment losses faced or Missing-In-Action (MIA). I remembered standing on one side of the lounge area during the forum break session, listening to a mid-age lady about her situation whereby she was involved in an investment scam.

Therefore, I will uncover the following topics:

1) How to choose a Financial Adviser?
2) How to identify Investment Scams?

1) How to Choose a Financial Adviser?
Anyone can just be a financial adviser by meeting the basic entry requirements and obtaining the license and then sell financial products. Here is the checklist to ensure you get a Financial Adviser who can provide sound financial advise.

  1. Obtained the required licenses.
  2. Proper fact finding being performed.
  3. Avoid financial advisers who immediately jump straight to products. A good financial adviser will introduce you to concepts before proceeding further.
  4. Basis of Recommendations are to be done.
  5. Be alert on the sales talk. Don't be too excited hearing the great amount of payout or interest rates (it can mean you are taking higher risk).

Fact finding:
Is a list of questionnaires pertaining to your background, financial and personal goals. Majority of the financial advisers tend to create small talks where from there they gather these information, without you noticing it.

Basis of Recommendations:
Is a paragraph worth of why your financial adviser would like to recommend you the particular products and should be based on your financial needs, goals, portfolio and also capability.

2) How to identify Investment Scams?
Have you heard about Ponzi Scheme? It is a scheme promising high returns but of lower risk to the investors. Be aware that high returns investments always comes with higher risk to investors. Here are some tips to prevent falling into Investment Scams.

  1. Ensure that the investment products are from reputable companies.
  2. Do research on the investment products and the product provider.
  3. Ask your adviser for more information if you do not understand the product.
  4. Check for historical performance records.
Last tips here: 
  1. If you need a financial adviser, you can always ask your relatives or friends to recommend their financial adviser to you. Choose the ones that have been doing a great job in managing your relatives' or friends' portfolio.
  2. Remember not to get involved in quick-rich schemes, as it will affect your financial portfolio, capability and goals.
May all of you benefit with the information I have provided here. Feel free to comment or drop me an email at . 

There is an upcoming Money Management workshop in 2016. I would like to invite all of you to come for the workshop as a stepping stone towards a better financial plan.

RSVP here.

See you there!

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My objective of creating this page is to reach out to more people, to educate about Islamic Finance and Individual Finance, share tips on financial planning and also be able to answer to everyone's queries. So, feel free to share this page and ask me questions. Let's share the knowledge and practice them together. In syaa Allah. Aamiin.