We’ve all heard the saying, “Money can’t buy happiness”. But it’s always struck me as being overly simplistic Ayn Rand 20th century writer and philosopher apt description of this medium of exchange: Money is only a tool designed to take you wherever you want to go, but it won’t substitute you as the driver. In other words, you need money as a commodity for most of the transactions you will make in your daily lives that will get you from one plane of satisfaction to the next; it is really up to you decide the effect, good or bad, it will have on you and your loved ones. What’s a financial advisor?

In today’s fast-paced world, never has specialisation proven to be more practical. If you’re having a toothache, you presumably go to a dentist; if you need to buy a house, you’d see a realtor; and when car issues arise, you turn to a trusted mechanic. We can’t all be specialists in every area. It’s this same thinking that explains the role of a financial advisor. Regardless of how brilliant, say, a surgeon is, this does not mean she will inherently understand how to invest money that will best work to achieve her particular objectives.

The world of personal finances is one that can potentially be dense, and, if you don’t have a background in finances or are not coming from a family that discussed money, it can be fraught with mistakes and missteps if you are not qualified to navigate that terrain. A qualified financial or investment advisor is an asset who will add value to your investment portfolio needs, both short- and long-term.

But, a financial advisor doesn’t only advise on investments; they provide holistic and broad-based, sound advice in any other area that requires wealth management. In other words, the advice offered isn’t simply about the traditional fare regarding stocks, bonds, securities, and such, but also about tax and estate planning, saving and spending, retirement, and even behavioural instruction. In short, a financial advisor is good for any money-based question that will influence the decisions the investor will make in life.

Who needs a financial advisor?

A wide cross-section of individuals can benefit from the services of a financial advisor:

• Young people just beginning their journey in the work world and who want to be proactive in money management

• Individuals in mid- and late-career who are now contemplating their financial future, and are beginning to find it more difficult to invest on their own, particularly as they amass increasingly more wealth and their finances become even more complex, and

• The elderly who are particularly vulnerable as regards unscrupulous people who would seek to milk them out of their hard-earned finances.

What to look out for

Financial advisors are responsible for educating and helping their clients to assess their financial status, to help with drawing up a plan for them to realise their goals, putting the plan in motion and overseeing its execution and then monitoring it to make sure it is working. They can be independent or attached to financial institutions or brokerages; but please ensure that the one you choose is licensed.

But being a financial advisor is much more than having an impressive grasp of financial matters, although this is important. Nor is it as simple as assigning the title in some random, haphazard manner in the way that the term “life coach” is these days often employed.

The Securities Act in Jamaica requires that individuals and companies entering the securities industry as investment dealers and investment advisors and their representatives be licensed by the Financial Services Commission (FSC). The Act defines an investment advisor as “a person who carries on an investment advice business, which means advising persons regarding investing in or the buying or selling of securities” and is required to possess at least a bachelor’s in economics, accounting or a business-related subject, or have professional qualification in law or accounting, or a course in securities approved by the FSC.

It’s also important that your advisor be knowledgeable with a tried and proven track record in helping investors to make sound choices that create wealth. Choose someone who’s relatable, client-focused and able to break down the issues; you should be able to speak with your advisor without feeling self-conscious or stupid. Is the advisor often unavailable to speak to you; opt for someone else who has you and your needs top of mind, often checking in with you with updates and useful seminars you might want to attend.

In choosing your advisor it would be remiss of me not to give you a few tips on how to select the person/entity that will assist you in navigating the financial landscape.

• Trust is essential. Find someone you trust with this most crucial aspect of your life. Advisory services are as much about the relationship as it is about technical competence.

• Education; your Advisor should be willing to take the time to educate you about finances and not there to “sell” you.

• Do you like access, do you want to be able to trade on your own? The advisory firm you select facilitate this?

• Can they provide support for the advice they are giving to you?

• Is there transparency in your dealings? An example being, are there any hidden costs to the transaction?

These are just a few of the areas you must look at in assessing the right advisor fit for you. NCB Capital Markets Ltd is now one of the largest stockbrokers in Jamaica and is an industry leader renowned throughout the Caribbean for our wealth management services in the areas of advice and planning. Our experienced staff understands that whilst money is a terrible master it is nevertheless an excellent servant and the vehicle that will bring you within proximity of your financial goals. Your money is hard-earned; employing the services of a qualified, experienced financial advisor will ensure that you don’t make reckless financial choices that jeopardise your wealth.