In your efforts to manage your cash and arrange for financial security, are you currently sometimes persuaded to buy a product or engage a consultant's services on the basis of claims such as:
"This is the best financial product in the whole industry."
"We are the best financial services company."
"I am the very best Financial Consultant in the business."
Such statements are not uncommon in the financial services industry, so how do you decide who to trust or which lender to place your organization with? You can be grappling with this issue once you graduate and start planning your finances or simply nonetheless as you take stock of one's retirement pans.
Why don't we look at these common statements to get a clearer picture of what is truth or myth:
1. "THIS IS ACTUALLY THE BEST FINANCIAL PRODUCT IN THE MARKET"
There is absolutely no one-size-fits-all product on the market. What is ideal for one person may be unsuitable for another. A professional Financial Consultant should gather information regarding your financial needs and status before making any recommendation. You would expect your doctor to prescribe medication only after he's got made an analysis, so have the same expectations of your financial consultant.
Ask accredited investor investments : "On which basis is this recommendation suitable for me?"
2. "THE MORE AWARDS THE BETTER"
Awards do give an indication on a Financial Consultant's performance. However, do keep in mind that awards are mainly measured by sales performance. Just as an easy food chain that sells probably the most burgers may not have the very best cooks, a Financial Consultant who has achieved a high sales performance may not necessarily be the most suitable person for you.
Ask your consultant: "How did you qualify for the awards?"
3. "WE ARE THE VERY BEST FINANCIAL SERVICES COMPANY"
Reputation and branding matter however the key question is how much emphasis you should place on them. Different financial services companies claim to be the best, so that is actually the best? Well, they could all be the best and that depends upon the basis of your measurement, for example, new business sales or assets under management. Just like a hospital that has the most number of patients does not mean the doctor that you will be seeing is best.
Ask your consultant: "Best in what area?"
4. "WE ARE ABLE TO SOURCE FOR YOU THE VERY BEST PRODUCT FROM DIFFERENT COMPANIES"
That might be possible only if a Financial Consultant might have access to all financial products from all finance institutions and the financial loans can be easily in comparison to one another. Unfortunately, like the theory of perfect competition in Economics, this may prove elusive in the real world. Major financial services companies still use their very own pool of Financial Consultants as the only distribution channel for some of their products. Furthermore, competing financial products will often have different benefits and drawbacks. Make certain the financial product recommended is the foremost suited for you rather than the one that is most beneficial for the Financial Consultant when it comes to remuneration.
Ask your consultant: "How are you currently remunerated for the various options listed in your recommendations?"
When you run into these statements, ensure you ask the consultant to back them up. A good financial consultant will allow you to make investment decisions which are appropriate for your preferences, and these change according to what stage you will ever have you are at.