I have been involved in the financial planning/investment business in one way or another man and boy, that is since I started work in 1977. Seems like an age ago now.
Many moons ago I visited a clairvoyant who told me among other things that “the thing you do with computers is very good” Since at that time, in 1985, I had hardly even sat in front of a computer much less done anything with one, I kind of put that to the back of my mind although everything else he told me was either already true or very soon did materialise. He also said I would be working in a Tyrolean area, “perhaps Perth?”
Fast forward to 1994 when I landed in Hong Kong. It took me a while to recall his Tyrolean comment but I guess you would call Hong Kong at the very least….hilly?. Anyway, I did at least own a laptop computer at that time with something like a 286 processor and god only knows what kind of hard drive storage. It wieghed a ton as well.
In 1997, I think it was, I set up my first web pages, I hesitate to call it a site at that time. Still there today and you can find
my full personal background on it at www.offshoreinvestment.org.
Eventually, I became disenchanted with Hong Kong and having built up a substantial private client base of expatriates of all nationalities by spending countless hours flying around the world and being away from my family I just got to the stage where I wanted to simplify my life. It’s a simple lifestyle choice.
What I do now is service that existing client base from my home, and with modern technology found that they were quite happy with e-mail and telephone support of their existing portfolios. So much so, in fact that the client base continues to grow through referral and of course, my existing clients continue to add to their portfolios on a regular basis.
As an extension of that I felt that there were probably many people out there looking for alternative investments and offshore investments to complement their portfolio. As a trade off for not being able to meet personally with any new clients, I decided to offer my services on a discounted basis so that my new “direct” clients could share in my extremely low overhead. That led to the establishment of www.investoffshoredirect.com
The fact is that I enjoy the work but I am not inclined to continue to travel around the world all the time and being in one place 90% of the time does actually makes me more efficient. To be honest I probably work harder and longer hours than ever but at least I get to see my kids at the beginning and end of every day.
A common misconception is to believe that the bigger the brokerage the greater must be the quality of service and the greater the investor protection. In fact, there is no correlation between the size of the brokerage and the degree of competence or diligence of its consultants each of whom is in effect an independent operator.
Indeed, the opposite is often the case and probably the best chance of finding a really good advisor is amongst the ranks of those who have found that working in a small or even single-handed practice allows them the best opportunity to practice their acquired skill and experience in a diligent and conscientious manner because it frees them from the corporate pressure of demand for sales, sales and more sales.
The problem for large brokerages is that the best sales people, those capable of pulling in lots of business, expect to be rewarded with big commission earnings. They are not going to work for what they consider peanuts
A large organization with a big sales force running around the world has to take a large slice of commissions to cover its overheads. The consultants can do no other than sell high commission products if their share of commission is to meet their expectations.
For instance, many excellent lump-sum investment products pay only 3% total commission. If the brokerage takes one third of commissions that leaves the consultant with only 2%. He wants more than that so he sells a less suitable (for the client) insurance company bond paying commission in the 6% to 8% range and increases his income by three to four times.
The added problem is that many of these advisors do live in expensive foreign countries like Japan and Hong Kong, not to mention the UK and so by definition need to make as much money as they can from everyone they meet to maintain their chosen lifestyle. Sadly, this often influences the advice they give and often it ends up being what is best for them and not necessarily what is best for the client and I think that many investors are quickly coming to realise this.
I believe that I have found the perfect situation. I find that by discounting the fees and taking lower commissions because I do not have the massive overhead, it is easier for me to truly give the best advice as I discount everything down to a level playing field.
No one ever sends money to me only to the fund management companies concerned so there is no risk in my being based in an unregulated environment, in fact, being in an unregulated environment means that I am able to offer products and services that Hong Kong IFA’s are simply not allowed to promote.