Should you trust a financial adviser?

As with any relationship, personal or professional, trust is everything.

When it comes to financial matters and making decisions related to money, it’s essential to know the person you confide in is the person you can trust to provide sound and relevant advice. After all, someone may look like a financial adviser on the outside but may instead be someone completely different!

Unfortunately, we too often hear stories of unscrupulous advisers putting their own interests ahead of their clients. It’s not surprising then that a financial adviser’s level of trustworthiness is an increasingly important attribute.

But before you decide whether you should trust an adviser, be honest about why you need an adviser in the first place. That will help you work out what you should look for and determine what questions you should ask before signing on the dotted line.

Decide what type of help you need

Are you new to yachting?

There are some fundamentals you will want to get sorted during your first season. These include banking, tax and savings.

Opening the right bank account as a crew member is critical, especially when it comes to managing multiple currencies and avoiding exchange rate fluctuations. Financial advisers with experience in the Superyacht industry know what accounts work best for crew.

Tax isn’t as straightforward as you think once you step onboard a yacht. It’s worth taking the time to speak with an expert about your tax obligations. They can also help you to take advantages of things like the Seafarer Earnings Deduction (SED) if you’re from the UK.

Once banking and taxes are sorted, it’s wise to turn your attention to things like savings and investments and make a plan for your future.

When it comes to considering financial goals, most people don’t want to be sold a product. Instead, they want someone to understand them and their dreams and goals; someone who can articulate how they get from where they are now, to where they need to be.

A good financial adviser will do this by supplying a comprehensive roadmap to help achieve your financial goals over your career. They will create a financial plan that fits you and your circumstances.

Are you an experienced crew member?

If you’ve been in the Superyacht industry for a while and you’re gradually building your savings and investments, perhaps your financial plan needs updating to reflect your new goals. Are you interested in making lump sum investments, investing on a more regular basis or buying property?

An experienced financial adviser can help identify the right investment options for your needs. And a financial adviser who has experience working in the yachting industry knows how to navigate these subjects as they apply to crew.

For example, if you’re interested in buying property in a country in which you’re not a resident, can you apply for a mortgage? This is the sort of advice a financial adviser who has experience with international clients can provide.

Are you preparing for life after yachting?

If you’re considering your options for leaving the industry, or already have firm plans to exit your onboard role, you will want to ensure your financial security. What that looks like depends on your goals and your current financial situation, but a financial adviser who has your best interests at heart should support you on your journey.

They will also understand what you need to consider when planning your exit to ensure your transition from onboard to onshore is as smooth as possible.

How do you know whether you can trust a financial adviser?

Once you’ve worked out exactly why you wish to work with a financial adviser, it’s wise to educate yourself to ask the right questions to identify dependable advisers.

It’s all about the questions you ask, the questions your adviser asks and determining the kind of business they operate, how they expect to be paid, and whether there are any conflicts of interest.

With that in mind, here are what we consider essential things to consider:

Values

Anyone with integrity should be able to tell you what their values are, and the last thing you want is your adviser working against your best interests. Remember, you’re hiring a professional, not a salesperson.

Financial advisers aren’t legally required to have their clients’ best interests at heart. However, for those advisers whose main focus is commission rather than their clients’ interests, this can very often cause a conflict of interest.

Anyone who tries to sell you a financial product or service just because it pays a commission, rather than how it fits with your needs, probably doesn’t have their values aligned with yours.

Conversely, an adviser who actively cultivates a long-term relationship with you, rather than focusing on successive commission-generating transactions can be considered trustworthy.

A trustworthy financial adviser in this industry should believe that every crew member deserves to leave yachting with complete financial stability, including a secure retirement plan and investments, right for them and their personal goals.

Payment terms

When you enlist the services of a financial adviser, the service isn’t free. Much like a solicitor, accountant, real estate agent, or any service provider, financial service suppliers expect to be paid for what they do for you.

Ensure you understand how an adviser is being compensated for investment advice or any transactions they perform on their clients’ behalf.

Here are a few key questions we recommend you ask an adviser:

• Is there an annual fee?
• Can I pay a periodic retainer?
• Do you work on an hourly rate?
• Will I be invoiced each time for your service?
• Or will a fee be automatically deducted from my assets?

You should expect a trustworthy financial adviser to make sure this aspect of their business is entirely transparent.

Service provision

Can your potential financial adviser articulate all the services they offer and how often you will hear from them throughout the year? If they give only a vague indication of how they operate after their initial contact, take that as a warning sign.

They may just want to put you on a mailing list for the sole purpose of badgering you with calls to sell you products and increase their commissions, so be wary.

Positive signs are if your adviser provides details about regular forward-planning meetings, works with you to update your financial plan to reflect any change to your circumstances, and offers regular updates on broader issues that may impact your financial situation.

A good financial adviser will also adapt the way they work to meet the challenges and fast pace of the Superyacht industry.

Level of expertise

You will probably prefer working with someone who inspires confidence and has the knowledge and skill to provide you with a service tailored to your interests and needs.

That knowledge and skill should first and foremost be finance related but it’s also wise to look for an adviser who has experience in yachting; after all, it’s a unique industry and seafarers often have complex financial situations that require specialist advice.

Bedside manner

Will your adviser take the time to talk to you? Does your adviser have the technical competence to answer any specific questions you have? And does your adviser spend whatever time is necessary with you to teach you what you need to know, to go through their recommendations, and make sure you understand everything?

Will they explain what you don’t understand with patience, using clear language? One of the biggest red flags is when you don’t understand something, and your financial adviser isn’t able or willing to explain when questioned.

Asking and being asked the right questions

Your financial adviser should be able to answer your questions directly, provide documentation about all aspects of their services and business, and clearly articulate their value.

They should also spend time getting to know you, what you need and what you want to achieve. To do this, they should talk openly and honestly with you about your goals.

A great adviser’s questions should aim to understand what makes you tick, understand your aspirations, your fears and your concerns.

Questions asked by an adviser can provide real insight into how they work.

Want to know more?

Understandably, there’s a lot to think about when considering working with a financial adviser.

It’s necessary to do your research, take the time to ask questions and work out whether or not you can trust an adviser to help you plan your financial future.

If you have any questions for us and want to know more about how we work with crew, please get in touch.