As soon as you have a job with a good income in the UAE you’ll start getting phone calls from banks and financial advisers. No need to pass on your number to them … someone will surely do that for you. By the time I set foot into my new office my phone was already ringing and I had a bank on the other end offering me an account, credit cards and loans that matched my income… go figure how they knew about that number. The first financial adviser rang the next day I think. If for some reason the mobile-phone-fairy does not pass your number on to these handy people, just ask your friends and colleagues – they’ll surely be able to tell you who they think you should (or shouldn’t) speak to.
The UAE is a great place to make good money and save good money….if you don’t, you’ll find many nice ways to spend it very quickly. So do look into options for saving and investing your money; most people will advise you to keep/invest most of your money offshore. There are several individuals and companies in the UAE that offer financial advice and a variety of investment options. And on both fronts there are MANY options (advisers & products), so take your time to listen to several and then go and do your research.
First of all: What is a “financial adviser” in the UAE? Reality is, they are individuals most of which derive their income from commission on the products they sell you… so never forget: it is always in their best interest to sign you up for an investment product, even though it might not be in your best interest. In comparison with the UK, Australia and NZ there seems to be little real regulation on the conduct of financial advisers in the UAE, with little avenues of recourse should you feel you have been mislead. These guys are salesmen and know how to sell their products, but they are not necessarily the experts on stocks, funds, etc that are not in their ‘current’ portfolio, as we learnt very quickly by asking questions.
You will be bombarded with sales pitches such as “get your money working for you” and “we only go with this product because there is nothing else as competitive on the market”, but don’t be pushed into the hard sell. Take copies of all the fund performance sheets and compare the figures against those published on the internet. You may find the funds have not been performing as well as you were told.
There is no rush despite what your financial adviser says. We were subjected to the “we need to get the paperwork signed by this months cut off”. In the long run what does it matter if you take a month to do research before signing up to a 5 to 25 year plan?
Fascinated by the sales pitch and the friendly guy in the nice suit, you may feel compelled to sign up for the recommended product, thinking:
Yes, you can afford to put X amount of AED away every month with your awesome new salary.
Yes, this place is fantastic and you’re planning on being here a couple of years.
Yes, it will be awesome to have tons of cash sitting there waiting for you in 20-25 years.
Many people go for the 20-25 year plan there and then. But we suggest that you stop and ask yourself:
What if you lose/change your job and can’t pay that amount any more? What are the account maintenance fees? What if you need access to your money immediately due to an emergency, or change in circumstances – how much will that early withdrawal cost you in fines? What if things don’t turn out as planned and you don’t end up staying here for 5-10 years? Then you go back to a (very) different salary, taxes, and maybe a pension fund that you have to pay into from your salary anyway – will you still need/ want / be able to pay into this 20-25 year plan?
There are other options, 2 year, 5 year, 10 year investments. So do think it over and ask/read up on all options. Speak to friends/colleagues – everyone will have their stories to tell about their advisers and investments here. Good and bad.
We’ve heard A LOT of bad stories. Friends who didn’t read the small print. Who went from one advisor to the next, signing up for whatever they were sold as ‘the next best thing’. The products all sound like great ideas at first. But the info sheets you are given are sales sheets. Go home, do your online research into the funds, the products, the companies involved. If you have little experience with this kind of thing it takes a while to get your head around it – I still have a lot to learn. But don’t be afraid to ask a million questions and see what knowledge and customer service lies behind the facade of the perfect sales person. And then make your own informed decision. It will always be a gamble.
A suggested checklist, before you invest:
- Slow the sign-up process down, there is no rush to sign up this month. The “special offer” will be replaced by an equally special offer next month.
- Take copies of the fund / product performance information the financial advisors will show you and check the data for accuracy on the internet. Entering the fund name or ISIN into google will get you the most up to date performance information.
- Ask for customer references and check them.
- Remember: it’s in the financial advisers best interest to have you sign up for the longest running products, it might not be in yours.
- Starting with a small / short term product first to see how satisfied you are with the service before signing onto a 25 year product might be wise.
- No matter what you are promised verbally: if you don’t have it in writing, it is worth nothing.
Early on when you’re still trying to process all the information, or have just signed up to a product, your adviser may get you to complete a customer satisfaction survey. Surely it’s a little early for that as you haven’t had time to form an accurate opinion on the accuracy of the information and customer support they have provided… Take the survey, but again wait a few months before completing it. There are many financial advisers out there that become almost impossible to contact after they have sold you the products and received that awesome customer satisfaction survey from you.
[Thanks to Ryan McGuire for making his awesome photography freely available online!]