In your time and efforts to manage your money and plan for financial security, are you sometimes persuaded to get a product or engage a consultant's services based on claims such as for example:
"This can be a best financial product in the complete industry."
"We are the very best financial services company."
"I am the best Financial Consultant available."
Such statements are not uncommon in the financial services industry, just how do you decide who to trust or which financial institution to place your organization with? You will be grappling with this particular issue when you graduate and start planning your finances or perhaps even now as you take stock of your retirement pans.
Why don't we look at these common statements to get a clearer picture of what is truth or myth:
1. "IT IS THE BEST FINANCIAL PRODUCT IN THE MARKET"
There is absolutely no one-size-fits-all product on the market. What is suitable for one person may be unsuitable for another. A specialist Financial Consultant should gather information regarding your financial needs and status prior to making any recommendation. You would expect your doctor to prescribe medication only after he's got made an analysis, so have exactly the same expectations of your financial consultant.
Ask your consultant: "On which basis is this recommendation suitable for me?"
2. "THE MORE AWARDS THE HIGHER"
Awards do give a sign on a Financial Consultant's performance. However, remember that awards are mainly measured by sales performance. In the same way an easy food chain that sells probably the most burgers might not have the best cooks, a Financial Consultant who has achieved a higher sales performance might 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 just how much emphasis you should put on them. Different financial services companies claim to be the best, so which is really the best? Well, they might all function as best and that depends on the basis of your measurement, for example, home based business sales or assets under management. Just like a hospital that has the most number of patients does not mean the doctor that you are seeing is best.
Ask IRA Rollover : "Best in what area?"
4. "WE CAN SOURCE FOR YOU THE VERY BEST PRODUCT FROM DIFFERENT COMPANIES"
That would be possible only when a Financial Consultant can have access to all financial loans from all finance institutions and the financial products can be easily in comparison to one another. Unfortunately, like the theory of perfect competition in Economics, this could prove elusive in real life. Major financial services companies still use their own pool of Financial Consultants because the only distribution channel for some of their products. In addition, competing financial products usually have different benefits and drawbacks. Make certain the financial product recommended is the best suited for you and not the one that is most beneficial for the Financial Consultant when it comes to remuneration.
Ask your consultant: "How are you remunerated for the different options listed in your recommendations?"
When you run into these statements, be sure to ask the consultant to back them up. A good financial consultant can help you make investment decisions which are appropriate for your preferences, and these change according to what stage of your life you are at.