Many of you will have come across Facebook posts concerning crew who have received bad financial advice. Sadly, in all too many cases, they have lost some or all of the funds they invested. When you consider the time and hard work involved in earning these funds, everyone owes it to themselves to ensure they are educated about financial services, the regulation of them and the associated risk with each type of investment.
When you speak to your lawyer or doctor, what level of qualification would you expect them to have? When you consider that your financial adviser is responsible for your investment advice, financial wellbeing and your eventual retirement, you owe a duty of care to yourself and your family to make sure that you are entrusting your financial affairs to someone that is sufficiently qualified.
There are various levels of certification. A Certificate level adviser is qualified to a high school level standard; a Diploma level 4 adviser to an undergraduate degree standard and a level 6 Chartered adviser, to a graduate Degree standard. The highest level is the Fellowship which is seen at a higher level still. To provide regulated advice in the UK, a level 4 Diploma is seen as the minimum required standard to give advice.
It's also important to know when dealing with a financial adviser where the firm they're working for is regulated as this speaks volumes to their credibility. For example, if the firm is regulated in the UK there are clearly defined regulations they need to adhere to in order to operate.
However in contrast you may find firms that passport their operations out of other countries that aren't subject to such strict regulations. In some cases you may find the company you are working with is not regulated at all and they are simply operating under their own terms.
Very simply put, if an investment looks too good to be true, that's probably because it is. It's essential before you sign up to any investment product that you understand the small print of what you are agreeing to.
Some good questions to ask are:
What is the term of the policy?
Is there a cooling down period?
Are there "initial units" associated with this product?
If you pay into the investment product monthly, are you allowed to take breaks with this?
There are certain types of investment products available on the market, that are not regulated. One example is Buy to Let investments which fall outside of FCA regulation so do be aware of this.
You should also be asking what level of guarantee the advice you are getting gives you and also, should that company have problems, what government backed compensation schemes are backing your investment. In the event of your investment failing your first course of action is to go to your adviser who should have a complaints procedure in place. If you do not have any success through your adviser you will need to formally complain. In the UK this would be done through the Financial Ombudsman.
Having a career in yachting affords you the opportunity to earn desirable income that if invested wisely can result in setting you up for a very comfortable future. Historically in the industry regulation has been frowned upon, as it has been seen to go against the grain of who you are. However when it comes to investments, regulation is exactly what you need to safeguard your future.
We recommend that you look for an adviser that is experienced, qualified and one that has the correct level of cover and protection behind them, so that you do not have the same issues going forward that many have faced in the past.
If you require further clarification on any of the points raised in this article please feel free to contact us at Marine Accounts.
Any advice in this publication is not intended or written by Marine Accounts to be used by a client or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party matters herein.