I’ve just received my 3rd unsolicited text message from some shop or telecoms provider in the UAE, so I’ve probably only got another two more to go today. As my clients and I regularly use text to communicate quickly and informally to each other, I’m always disappointed when I receive a text like this that is basically wasting my time, and I have no idea how to make them stop. I can only think that this business model, infuriating as I find it, must work for them because it’s being used all the time. Surely, no one actually welcomes this sort of ‘forced communication’, do they?

This isn’t the only odd business behaviour taking place in the UAE: I have heard so much about the standards of advice being delivered through ‘financial advisors’ over here that I thought I’d better set the record straight about how it should work. I’m here to offer you a vision of solid, professional advice and what it looks like, how you can spot the bad stuff, and how this industry sometimes works. A recent study by Zurich Life International in the Middle East shows that over 70% of people choose not to use professional financial advice. When you ask your friends and colleagues about their experiences with some advisers, this statistic is hardly surprising. It doesn’t take that much digging to find someone who has been sold a product that doesn’t really match their requirements, tied into something that they didn’t expect, or who feels their most pressing issues have been ignored. Indeed, one of my own clients was approached by another company recently seeking his business, and after politely being told that he was a client of mine, the individual in question claimed to be working with me just to get a meeting booked. Clearly a strange tactic, and as people generally aren’t that daft it soon became apparent at the meeting what the reality was.

But wait a minute...how does all this happen? Surely the authorities here in the UAE would frown upon this sort of unscrupulous behaviour? While it is true that the appropriate licenses must be sought from the authorities to operate as a financial advisory firm in this country, unfortunately the regulations fall short of enforcing what would reasonably be termed ‘good behaviour’. I am certain that this is coming eventually, and that we will move to a model more akin to the more mature environments, but until this happens it is wise to choose your advisor carefully.

Rather than dwelling on the negative, let’s look at how it should work in practice when you meet a professional advisor. Firstly, how do you choose? Start with the basics: are they regulated by the Central Bank for investment consultations and the Ministry of Economy for insurance products? Are they qualified within this industry? Then look at their track record with other people, and the easiest way to ascertain this is to ask your friends and colleagues who they have had good experiences with. This referral process is important to you and the advisor, as it is a way of establishing trust quickly and allows you to get to the reasons for meeting that much quicker. If anyone tells you that a friend gave them your name and number, check this with your friend before going any further: surely the advisor can wait a day or two for you to verify this?
Next, make sure you’re comfortable with the individual and the company they represent before you are open about your finances during the meeting. If you’re married, decide up front whether you wish to review your finances together, which in my experience usually works better. This has the added bonus of the two of you building a plan together, with both opinions shared. I have discovered that rushing the process at this stage is one of the key reasons that potential clients feel uncomfortable with advisors. If it takes one meeting to feel happy about the advisor before going into depth about your situation, then take this meeting. Once more, isn’t it reasonable for the advisor to give you a day or so if needed? There is a ‘quid pro quo’ here that if the advisor has given you this time to become comfortable, that when you do meet to discuss your finances, you are then required to dive in, feet first, and be very open about your current situation, your future plans, and be open minded as they guide you through the process. This doesn’t mean that your wishes should be ignored: if you know that you want something specific resolved before doing anything else then you can ask for this, of course. It is the advisor’s prerogative to refuse to do business with you if they believe you are really going down an inadvisable path, and if they truly believe this then it is my opinion that this is what they, morally, should do.

It is the job of the professional financial advisor to ask the right questions to discover your needs, and then to help you to quantify them. If you find your advisor focussing only on certain topics, like long term retirement plans, for example, then this could be a warning sign that they are not looking at the whole picture on your behalf. Unfortunately this can mean that they are considering their own financial situation more than yours.

A good advisor will cover your cash and debt position, your need for insurances (medical, life, etc.), your short, medium and long term savings requirements, any expat-specific points, and how you wish to balance these against your wishes today. This list isn’t exhaustive, but it will show up an advisor not taking a holistic view of your situation if they are obviously glossing over some of these points. Your cash and debt position is the first priority, and the advisor should go through a monthly budget with you, including any known commitments that are coming up. Protecting your family against illness and loss of income is the next priority, before looking at anything long term or investment oriented. Any speculative investments are likely to be the last on the list, as you should have everything else watertight before engaging in this kind of behaviour.

Finally, do be aware that the offshore market is different to other jurisdictions, and the advantages and available options vary significantly. If you are an expat and you know an advisor ‘back home’, it is quite likely that their license will not allow them to advise in this area, so always seek out someone who knows the issues you will face and understands the options and pitfalls.