The current COVID-19 pandemic has been a hard lesson learned for most of us, especially in terms of our finances. It has also raised questions about how well Malaysians are with their personal finances. In fact, the RinggitPlus Financial Literacy Survey 2020 found that 53% of us Malaysians cannot survive more than three months with our current savings. 

Perhaps this is the right time to bring into light the role of a Financial Advisor, whose goals are to help you determine both short and long-term financial goals – according to your current financial standing and then to help you work your ways into achieving those goals by providing you with a well thought out financial plan. 

However, despite the advantages that a Financial Advisor can contribute to the betterment of your financial wellbeing, not many understand what exactly Financial Advisors do besides the popular misconceptions that they are similar to insurance agents or a financial products salesman who only seek to earn their commission. 

The Role of A Financial Advisor

The term Financial Advisor encompasses many different aspects of financial advice, including those of a wealth planner and a financial consultant. 

In definition, a financial advisor offers professional financial advice and assistance to help clients reach their short and long-term financial goals. A session with a Financial Advisor usually begins with an assessment of a client’s current financial situation and what their financial goals are.

With that information, a Financial Advisor will then be able to identify areas for improvement, as well as offering services such as investment advice and management, wealth management, debt management, budgeting, insurance suggestions, tax planning, retirement planning, and estate planning. 

Discussions with a Financial Advisor can involve calculating how much you need to save for retirement, creating an adequate emergency fund, recommending specific investments or providing complete investment management, refinancing strategies to improve your cash flow and pay off debts, and so on. 

Nevertheless, many remain unconvinced about the need for a Financial Advisor’s services, mainly due to a number of misconceptions and myths. Here are five of the common ones, as well as explanations on why these misconceptions are incorrect. 

Myth #1 – Financial Advisors Are Only For The Wealthy

One of the top misconceptions about Financial Advisors is that they are only for those who are rich enough to afford one. In reality financial advisors are beneficial for anyone who would like to build themselves up financially, and seeking professional help to get on the right path and avoid costly financial mistakes could likely prove valuable in the long run.

Moreover, the earlier you start planning and strategising financially for the future, the better your money can work for you.

Myth #2 – Financial Advisors Are Untrustworthy

This second myth may have stemmed from the misunderstanding of the role of a Financial Advisor from an aggressive insurance agent or financial products salesman who introduce themselves as “wealth planners”, “financial consultants”, or anything that sounds similar to a Financial Advisor. As explained earlier, this is simply not true.   

On that note, trust is an integral part of hiring the right Financial Advisor – after all, you would be spilling information and details you may not even share with your significant other! It is understandable that although there may be some bad apples in the world of financial professionals, it is important to keep in mind that not all financial advisors are dishonest. 

A true Financial Advisor treats their clients with respect, cares about their financial goals, and works with their client’s best interest in mind. An efficient financial advisor will gladly educate their clients on investments at the best of their ability, as well as have the patience to openly explain various financial concepts, risks, and fees. 

One of the key takeaways of a trustworthy Financial Advisor is that they will regularly ask to meet up to discuss and review your portfolio because financial advisory is an on-going process instead of a one-off arrangement.

Myth #3 -Financial Advisors Sell Unnecessary Products & Services

Relevant to Myth #2, this next misconception is often associated with the untrustworthiness of financial advisors. 

Usually, a Financial Advisor will first determine your needs, objectives, and financial circumstances before advising and recommending any products or services. Since Financial Advisors are paid by the hour or by the session and not by sales commissions, there is less incentive for them to recommend a financial product – unless they deem it suited for your needs. 

Myth #4 – Financial Advisors Will Take Full Control Of My Accounts

When working with a financial advisor, you are requested to provide accurate information as well as to keep your advisor informed of any changes to your financial circumstances to ensure that the right advice, products, and services remain applicable and relevant.

If your Financial Advisor is allowed to handle your money, they are first required to create a separate client account to be held in trust. Ultimately, you will always have the final say on what to do with your money. 

Myth #5 – Financial Advisors Have Costly Fees

It is common to believe that Financial Advisors are generally expensive, but it actually depends on the asset size of their clients and could range from RM1,000 to RM20,000 a year.  

It is best to also note that fees are charged based on the on-going advice and 6-month to a year’s management of your finances, and can always be discussed with your Financial Advisor. 

After all, the core principle of financial planning is to ensure good and strong financial standing, to avoid dire financial mistakes, and to gain control of your finances throughout all stages of your life. 

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So those are the five myths that we hope will help you open your mind towards the purpose and benefits of engaging with a Financial Advisor – if you are seeking to improve your financial wellbeing or to achieve a certain financial goal that you feel is difficult to achieve on your own. 

Meanwhile, if you are interested to engage with a Financial Advisor, UOB Kay Hian’s Wealth Advisors could be who you can seek professional financial advice from. 

Introducing The Financial Advisors Of UOB Kay Hian

UOB Kay Hian offers a comprehensive range of financial products and services for individuals, private wealth, and corporate institutions, which include brokerage services with a variety of equities and derivatives, investment banking and services, corporate advisory, wealth management, and financial services such as structured financing. 

With their 4-Step Portfolio Advisory Approach that involves understanding, planning, implementing, and managing – you’ll be rest assured that UOB Kay Hian is dedicated to helping you meet your financial needs, objectives, and ultimately, financial freedom. 

UOB Kay Hian also has an online platform,  UWEALTH powered by Morning Star, where you can easily access your portfolios, transactions, investments, market insights, and more. 

To learn more about UOB Kay Hian’s Wealth Advisors and how they can help you move towards achieving your financial goals, head to UOB Kay Hian’s website today and get in touch with a representative today!

• TAGS:
• Financial Advisor
• Myths About Financial Advisors
• UOB Kay Hian
• UWEALTH