AS RECENT as ten years ago or so most middle-class Jamaicans didn't put a personal financial planner high on their priority list. But the dislocation in the economy in the early 1990s put an end to that.
Maintaining net worth suddenly became more important than the annual Miami shopping trip. Now, with the dollar under severe pressure and an already struggling economy about to suffer the effects of the Gulf war, money management specialists are as essential as water in the Iraqi deserts.
Hiring a good money manager is a practical necessity for those who want to achieve their financial goals and objectives. Managing money in Jamaica today demands a sophistication and breadth of knowledge that our busy lives have little time to develop.
It doesn't mean that we ourselves mustn't get involved. But professional help guides us to financial safety and comfort. Money managers whose research is thorough and whose analytical skills are sharp know what strategy to employ.
GETTING A CLEAR PICTURE
The best ones understand that the first step is getting a clear picture of our finances income, expenses, liabilities, assets and tax management. They then help us to identify financial strengths, weaknesses, opportunities, possible threats and most importantly, financial objectives.
A good financial planner will forge a detailed plan based on results from analysis. She will then draw up a set of action steps to outline how to best manage your finances.
It's the financial planner's responsibility to present you with a set of strategies aimed at making your dreams become reality. But finding a money manager who meets your needs and makes you comfortable is not as easy as choosing the numbers for your lottery ticket. And you know even that can be difficult for some of us.
Before hiring an adviser, find out what services her company can deliver, if there are limitations on their recommendations, what services you pay for, how much the services cost, how the adviser or planner gets paid and now that you think about it what specific services you need.
Begin your search by getting referrals from people you trust: relatives, friends or if appropriate, associates. Ask how their financial adviser offered guidance, discipline, focus and peace of mind, and if the advice received helped them realise their goals.
In some instances a good alternative is the customer service manager at a nearby bank or brokerage firm. For the best results be specific about the type of money manager you are looking for and what his qualifications should be.
Once you have put together a list, call a few of the candidates. Let them know you are in the market for their services and would like to schedule an
interview.
To get as much out of the meeting as possible, go in with a list of questions about your concerns.
What should I be doing to build financial security?
In what specific ways could you help me achieve my goals?
Do you sell investments as well as provide advice?
What type do you recommend or sell the most?
Will you be the only person working with me?
How will I pay for your
services?
How much do you typically charge?
Will you help evaluate the progress I'm making towards my goals?
What are your professional credentials?
Can I get my rights as a client in writing?
The guiding principle here is, be prepared, that way you will be taken seriously. It's also a good idea to take notes during interviews. Recording specific answers and personal impressions of the prospect is a good means of comparing candidates over a period of time (the process could take a couple weeks or more). Taking notes will also cause candidates to think carefully about how they answer your questions.
After a few a weeks of interviews you should have an idea about your choice. Your decision should be based on several factors.
First, ask yourself if you understood the answers to your questions. Was there an attempt to make sure you were comfortable with investment choices or with explanations in general?
FINANCIAL GOALS
Second, were you asked about your financial goals, your income, expenses, obligations and assets? And third, were you asked about your tolerance for risk? Other details matter too. Were you treated with respect?
Did they seem to appreciate you as a prospective client? Avoid managers who treat you poorly because they believe your account is not likely to be bigger than theirs. Steer clear of managers who talk more about what you want to accomplish than what they can do for you. One is unethical and the other incompetent.
Ultimately, no search process is perfect. Sticking to these guidelines is no guarantee you'll find or for that matter become a Warren Buffett or a Michael Lee Chin. But if you do chose an incompetent or unreliable adviser, remember you can terminate the relationship and start a new one.
The good old days when 47 Jamaican dollars bought one US dollar seems to be gone now; so too are the days when Jamaicans were content only with putting money in passbook savings.
Today, a secure financial future for your family depends on a much more aggressive and proactive approach to wealth management. A professional with a broad grasp of financial issues and a savvy sense of the market can be of immense help.
For further information please contact NCB Wealth Management Division at 1-888-NCB Wealth (1-888-622-9325)
