If you are going to get financial advice, pay for i

Boy, are there a lot of people out there waiting and wanting to give you financialhelp, advice, information, tips and guidance.

Great learn early on to be very careful who you take advice from if you want to hang on to your wealth. There are two groups of people to whom you may turn in the event of needing to say advice, help, guidance, whatever. First, there are skilled professionals who carry indemnity insurance so you can sue them and expect to get a payout in the unlikely event the information they give you is erroneous, wrong, dangerously bad. If they stand by their advice, you should make sure the provision is there so that you get paid if it is wrong. That keeps ’em on their toes.

These people you pay and their fee entitles them to talk to you about your money. Second, there are very rich people. Listen to them, unless they won their money on the lottery, inherited it, robbed a bank to get it, or bought a load of drugs in Marrakech and sold them in the local nightclub (actually their entrepreneurial skills might be worth something even if their honesty or honour isn’t).

Those are the only two categories open to you. The ones closed to you include friends and family, well-meaning acquaintances (even if they do have a quid or two of their own), TV programs, the internet, and high street banks. You must make sure any financial advice comes from someone who carries a recognizable qualification or membership of a suitable organization that includes the very, very rich club. Make sure you know that they know what they are doing. The textile millionaire Joe Hyman used to say that in order of honesty, the three types of banks were high street banks, mountebanks, and merchant banks.

There are two types of advisers in my experience: (a) those who stop you from making an ass of yourself and (b) those who tell you you’ve made an ass of yourself after you’ve done it. You want category (a). You’ll get loads and loads category (b).

When it comes to professional financial advisers, there are another two categories: (a) those who deal with your finances and (b) those who try to sell you products. Avoid (b) like the plague.

Any financial adviser you use should be independent – i.e. they should not be restricted to providing advice from a limited range of products offered by the company they work for. It’s the difference between buying a suit off the peg – best fit – or buying something tailor-made to fit your requirements precisely

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