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When comes to investment planning, investors would normally have to crack their
heads about where and how to start. Some seek the help of professional advisers to
solve their problems. Others prefer to do everything by themselves rather than rely
on professionals.
Quite often many investors do not have time to plan their finances efficiently. Investors
in this group often adopt a "pure" passive investment strategy for their
financial planning as they are wary of market volatility. They are more comfortable
investing in traditional instruments such as savings and fixed deposits with banks
which require less risk, thus less monitoring of the market
With a growing number of options available in the market, it would be unwise for
investors to stick to only one or two traditional investment tools which provide
a relatively slow albeit steady return.
Financial planning is one of the general range of services in the market provided
by qualified investment advisors. A competent investment advisor can provide invaluable
advice for investors who lack the necessary investment knowledge and practical skills.
One must remember that managing even a small investment portfolio can be time-consuming.
What is an investment adviser? The Securities Industry Act defines an investment
adviser as "a person who carries on a business of advising others concerning
securities. Any party giving investment advice today must be licensed by the Securities
Commission (SC).
How can one determine whether one has selected a reliable investment advisor? Below
are some things to look for. A good investment advisor should :-
1. Give impartial investment advice
The adviser should provide independent advice. They should be independent of any
product provider. For example, when buying a unit trust, many people normally prefer
to talk directly to the product provider. There is nothing wrong with this but bear
in mind that the product provider is likely not to give "fair" advice.
It is only natural that his or her advice would be biased towards his or her product.
On the other hand, the investment advisor who is not formally linked with any product
provider such as a fund manager is more likely to give impartial investment advice.
In other words, there is no conflict of interests. The advice would not be skewed
to any particular product provider but based purely on quantitative and qualitative
analysis of a fund.
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