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RP: One of the problems people face when choosing a fund to invest in is a lack of transparency.
It should be easy, for example, to work out exactly how much you’ll pay to invest in a particular fund.
But often it isn’t. Andy Agathangelou is one of the founders of the Transparency Task Force, which campaigns for greater transparency in global asset management.
AA: What I’ve experienced over the last 30 years or so of my career are times when I’ve felt very proud to be in the financial services sector… but, if I’m honest, occasionally felt a little bit awkward about it, or even embarrassed… and sometimes even quite ashamed. There is a very small group of people within the industry who, over the years have managed to do a lot of harm, a lot of reputational damage. I call this group the mischievous minority, but the sad reality is that they really have tarnished the reputation of the sector.
RP: Thanks to organisations like the Transparency Task Force, the fund industry is becoming more transparent.
But investors still need to be on their guard.
Andy Agathangelou strongly recommends working with a good financial planner.
AA: Having the right adviser is probably absolutely head and shoulders above everything else, and that’s all about a trust-based relationship. That’s all about having an adviser who genuinely puts the interest of the client first and foremost — this is absolutely key. I can only think about my own situation: when I’ve experienced the value that can be provided by a good financial planner, it’s beyond measure.
RP: Another problem, however, is that some financial advice firms also lack transparency.
When choosing an adviser, it’s vital that you understand exactly how much you’ll be paying and what you’ll be receiving in return.
AA: Does the adviser commit to applying some kind of a fiduciary approach — in other words, putting the true interests of the client first and foremost? Do they have testimonials on their websites or elsewhere, from real-life existing clients who actually vouch for the credibility and competence of that person? But the single most important thing is just that chemistry between the client and the adviser. When the adviser knows that he or she can put their trust in that professional.
RR: In summary then, transparency is crucial. Finding a transparent financial adviser you really can trust is a top priority.
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