Financial Planning.

Expatriate Financial Planners operating in Thailand are a mixed bag.
Some are professional and work in the best interest of their clients. These people tend to have a professional qualification from their home country. They generally have a professional commitment to fulfill the financial planning needs of their clients to the best of their ability. They build relationship which last wherever their clients end up living.
Others employ starry eyed youths to barrage local CEO's with constant requests for appointments. When inevitable failure sets in after perhaps one sale these brokers recruit the same types to continue the barrage. After all if 20 people can generate 20 sales its worthwhile for the short sighted. Generally this type has no scruples.
A client of mine was sold a 20 year term US$10,000 a year savings plan which generated a huge commission but what the client wanted was a single premium investment of US$10,000 which generated a modest commission.
It is difficult for a farang here to distinguish between the good and bad. Some will do nothing. Some will use respected International Brokers like Merrill Lynch. And still others will take their advice from respected financial publications.
Let's look at the options.
Do nothing. What a terrible waste of the best opportunity an expatriate will ever have to secure his financial future in a tax free environment where no little government official dictates the amount you can invest tax free.
International Brokers. Of course this is better than doing nothing and many of these brokers have impeccable credentials. The problem is that many investment banks have no pedigree in financial services. Offshore banks in the UK typically recruit greenhorns and brainwash them into selling their limited product range to their bank customers. Merrill Lynch was fined $100,000,000 – yes the number of noughts is correct- for duping investors. Hardly confidence building.
Financial journalists.. Most financial journalists have one thing in common with Bangkok brokers. Neither is licensed to proffer financial advice.
The Economist in its May 25th. Edition “Retail investors instead of following the tips of Wall Street analysts would be better advised to buy pooled investments vehicles such as mutual funds. Spread your risk or you risk loosing your money”
In its July 13th issue the same magazine says "Yet retail investors choose to put far more of their money into actively-managed funds than do better informed institutional investors".
So how did these institutional investors get better informed? Certainly not by taking the Economist's advise.
The second quotation was a financial journalist advising clients to go for tracker funds because of their lower cost. However low the costs, the guarantee you have with a tracker fund is that it will under- perform the market when charges are applied. You are investing in capitalization. Where do you go when the market falls?
It is no easy task for a potential investor to find “best advice”.
Two things which I think you should remember.
Firstly be your own judge and remember that market risk can be managed by investing for the long term in a diversified fund or portfolio of stocks managed by an experienced investment professional..
Also The Economist had some good advice on May the 25th. “Never blindly follow the advice of anybody- whether they be bankers analysts, visitors to internet chatrooms or even newspapers” .You can't argue with that.