Check financial advisors online

Check financial advisors online

There are lots of financial advisors who offer help to expats. Here we explain how to avoid the cowboys and make sure they are properly regulated.

THE age old adage caveat emptor (let the buyer beware) still holds good in all financial transactions.

British investors often seem reluctant to ask the key questions before parting with their money. Few carry out effective due diligence on the adviser and the firm he represents.

Most fraudsters are very plausible rogues disguising the fact that underneath lies a slick, experienced snake oil salesman.

It is our individual responsibility to exercise caution in the selection of an adviser to ensure we do not become a victim of the next rip-off.

How does regulation work?

Advisers can be regulated in a number of ways.

French advisers may be governed by l'Organisme pour le Registre des Intermédiaires en Assurance (www.orias.fr) if representing insurance based products eg. capital investment bonds.

If the adviser is representing direct investments, generally any quoted security, then he is likely to be regulated by the Autorité des marchés financiers (www.amf-france.org)

You can verify the adviser's regulation status on the relevant website.

If your advisor is helping out with a cross-border financial issue (involving, say, both France and the UK), he really needs to be authorised to give advice in both France and the UK.

The UK Financial Services Authority (FSA) is considered one of the best regulatory authorities in the world.

When it comes to an expatriate adviser regulated by the FSA you can verify his credentials at www.fsa.gov.uk/pages/register/

You can check that both the individual and his firm are fully authorised and regulated by the FSA.

Use the "passports" link at the top of the firm's page to confirm he can legitimately advise you in France.

Does using a regulated adviser guarantee you will not be the victim of a fraud?

Look beyond the regulated status of the adviser. Ask if he has been qualified by examination and what training he has to provide financial advice to expatriates in France. Establish how long the firm the adviser represents has been operating in France. Practical experience is a vital component in getting the best advice.

Using an adviser of a larger multi-disciplined firm is usually preferable to small partnership or sole proprietor. This enables more continuity and depth of service. What resources does the firm have and how might you benefit from the different areas of specialism within the firm? No one adviser knows it all.

The back office administration and technical back up available to the adviser is profoundly important.

Also, larger companies do not close when a member of staff is ill, goes on holiday or wants to retire.

Ask to see an adviser's terms of business before making an investment and establish what the complaints procedures are. Make sure he has gone through a comprehensive written fact-finding process with you before any recommendations are made, and that before you invest you receive the advice in writing with the details of all costs and risk clearly explained.

Get confirmation that he has Professional Indemnity Insurance to cover the advice he gives you.

One final piece of advice is that when making investments you should never, I repeat never, hand the investment money directly to the adviser.

The cheque or bank transfer should only be made payable to the specific investment fund or product you are investing in, or to a regulated trust company if you are investing via a trust.

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