Daniel Lee
- Nov 13, 2020
- 5 min read

Things you must know before you engage a financial advisor

Updated: Aug 25, 2021

Being an advisor myself, I have contemplated on whether I should write a piece like this as it may come across to be too biased or self-serving. Nonetheless, I think what I am about to share with you is important enough for me to face the criticism that may come along with the publishing of this piece.

I hope that by the end of this article, you will have a better understanding of some of the key considerations that you should have when selecting the advisor whom you would engage in to help you manage, protect, grow and preserve your wealth over your lifetime.

Disclaimer: The considerations that I will be spelling out in this article are based on my own opinion as well as the feedback that I have gotten with clients that I am serving. Bear in mind that there is no right or wrong answer, just what you are comfortable with and prioritize on.

Is it better to engage someone close to you?

For myself, it’s a plus point that he or she is someone that I’m close with, but it is never a decisive consideration. For some of my clients, it may or may not be a decisive consideration. Here is why.

Personally, the idea of engaging someone just because he or she is close to you does not make sense to me. At the end of the day, I believe that everyone should assess their advisors based on their skills and abilities to deliver the solutions that are suitable for you at the lowest possible cost.

That said, I have also had clients who engaged my service simply because I am someone whom they are closed to, and for that group of people, they engaged me because they felt that I am in a better position to advise them since I already knew their situation and they felt that they could trust me better than other advisors whom they may not be close with.

On the flip side, I have also had friends who deliberately chose not to engage my services because I am someone whom they are closed to. They either believe strongly in the saying that: “讲钱伤感情” (Direct translation: talk money hurt feeling) or they felt like their personal finances are too private to share with their friends or family. Hence, they would rather engage someone whom they are not closed to in matters relating to their finances.

Whose side is your advisor on?

In an industry filled with Insurance Agents, Bankers, Financial Advisors, and Independent Financial Advisors competing for your attention and resources, you must know whose side is your advisor on when it comes to the rendering of advice.

When it comes to recommendations and advice, is your advisor really on your side? or is your advisor on the side of the company that he or she is working under?

While it is inevitable that all advisors, be it independent or non-independent, will have some degree of bias towards certain providers, it is important to understand what drives your advisor in representing the company that he or she represents? What drives your advisor in recommending the product of the company that he or she had recommended?

The main reason why I choose to represent an Independent Financial Advisory firm is that I do not wish to be placed in a position where I have to recommend sub-par products and solutions just because I am unable to distribute the products and solutions of other companies in the industry.

Being an Independent Financial Advisor Representative had allowed me to be on the same side as my clients when it comes to the products and solutions recommended. I can be more objective because of the environment that I am working in as well as the capabilities to plan and compare the different providers across the industry.

So that’s my explanation to my clients as to why I chose to represent an Independent financial advisory firm instead of working under an insurance company or banks and how I have positioned myself to be on my client's side instead of the product provider's side.

It is important that you find out whose side is your advisor on as your advisor would be your business partner in helping you manage, protect, grow and preserve your wealth in the next 40-60 years to come.

In addition, just as an employer would screen its prospective employees, you should take some time to understand the background and credentials of the advisor to assess his or her credibility and credentials before engaging him or her. (Self-plug: view my credential on LinkedIn)

What is your advisor’s business plan?

Let’s face it, most financial advisors in Singapore are self-employed individuals. That being said, our remuneration is directly tied to the number of clients and also the size of each of the clients that we serve.

Unfortunately, every human being on earth only has 24 hours a day. As our client base increases over time, the number of hours we have per client would naturally decrease. It is important that you find out what are your advisor’s business plan – how will they scale their business and when will they stop acquiring more clients – to ensure that he or she has set aside sufficient time and attention for you.

As I’ve mentioned, a financial advisor should be your lifelong business partner in helping you manage, protect, grow, and preserve your wealth. If you’re looking for an advisor who will accompany you through this journey, you must ensure that the advisor has positioned and built a business that is in line with your expectations.

For myself, the vision that I had in mind when entering into the financial advisory business is to operate with a “family office” concept where eventually, I will work alongside a team of advisors to serve the families that had placed their trust in me.

In terms of quantity, the number I am looking at is 100 solid families who are both serious in their financial planning and see value in what I provide instead of treating me as just another product distributor.

Sure, I may not earn as much as other advisors who are more aggressive in their client acquisition, but serving 100 solid families will be more than enough for me to lead a comfortable lifestyle while doing what I enjoy doing – financial planning and investment portfolio management.

Would the number change? It depends on the operating conditions, the available capacity of my business as well as my work-life priorities then.

Long story short (and self-plug of course)

While the things I’ve shared above are not exhaustive, they are some of the key considerations that I believe everyone should know of and often overlook before making their own decisions.

Other considerations that you should think about include the alignment of things like

Personalities and values when it comes to money management and life in general
financial planning style
investment portfolio management philosophy and methodology
etc…the list goes on

The annoying yet beautiful thing about financial planning is that every advisor’s style is inherently different and that there is no right or wrong style. What’s important is for you to find the advisor whom you find is suitable to accompany you through the journey towards financial independence and freedom.

And of course, here comes the self-plug. If you like what you’ve read regarding my style of advisory and would like to find out more about how I can value add to your financial planning, you can reach out to me directly via WhatsApp or telegram and we’ll see what we can do together: