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In your time and efforts to manage your money and arrange for financial security, are you sometimes persuaded to buy something or engage a consultant’s services on the basis of claims such as for example:

“This can be the best financial product in the complete industry.”

“We are the very best financial services company.”

“I am the best Financial Consultant in the business.”

Such statements aren’t uncommon in the financial services industry, so how do you decide who to trust or which financial institution to place your business with? You will be grappling with this particular issue when you graduate and begin planning your finances or simply even now as you take stock of one’s retirement pans.

Let us look at these common statements to get a clearer picture of what’s truth or myth:

1. “HERE IS THE BEST FINANCIAL PRODUCT ON THE MARKET”

There is absolutely no one-size-fits-all product in the market. What is suitable for one person could be unsuitable for another. A specialist Financial Consultant should gather information about your financial needs and status prior to making any recommendation. You would expect your physician to prescribe medication only after he’s got made a diagnosis, so have the same expectations of your financial consultant.

Ask your consultant: “On what basis is this recommendation suitable for me?”

2. “THE MORE AWARDS THE HIGHER”

Awards do give an indication on a Financial Consultant’s performance. However, remember that awards are mainly measured by sales performance. Just as an easy food chain that sells probably the most burgers may not have the best cooks, a Financial Consultant who has achieved a high sales performance may not necessarily be the most suitable person for you.

Ask your consultant: “How did you qualify for the awards?”

3. “WE ARE THE VERY BEST FINANCIAL SERVICES COMPANY”

Reputation and branding matter but the key question is how much emphasis you should place on them. Different financial services companies claim to function as best, so that is actually the best? Well, alternative investment platform might all function as best and that depends upon the basis of your measurement, for example, new business sales or assets under management. As being a hospital that has the most number of patients does not mean the doctor that you are seeing is the foremost.

Ask your consultant: “Best in what area?”

4. “WE ARE ABLE TO SOURCE FOR YOU THE VERY BEST PRODUCT FROM DIFFERENT COMPANIES”

That might be possible only if a Financial Consultant can have access to all financial loans from all finance institutions and the financial loans can be easily compared to one another. Unfortunately, just like the theory of perfect competition in Economics, this could prove elusive in real life. Major financial services companies still use their own pool of Financial Consultants as the only distribution channel for most of their products. Furthermore, competing financial products usually have different pros and cons. Make sure the financial product recommended is best suited for you and not the one that is best for the Financial Consultant with regards to remuneration.

Ask your consultant: “How are you remunerated for the various options listed in your recommendations?”

When you come across these statements, ensure you ask the consultant to back them up. A good financial consultant will let you make investment decisions which are appropriate for your preferences, and these change in accordance with what stage of your life you are at.