Have You called on Your Firm’s Financial Advisor Yet?

Posted in Small & Medium Businesses | by Jiehui Kwa on 9 October 2017

Last updated on 31 October 2018

Running a business isn’t all that easy. Trust us, we know. Almost anything could go wrong. Your operations could creep over your profits, customers could give you a hard time, etc. In short, there are countless things that could directly or indirectly affect your business profitability. So, you may want to protect whatever profit you’re currently raking in. And that’s when your financial advisors, come in.

 

Understand the role of a Financial Advisor

Before you make that call, it is necessary that you completely understand what a financial advisor can and cannot do.

 

CAN

             CANNOT
  •  Advise you on the financial health of your company
  • Examine your company’s balance sheet and give you appropriate advice
  • Look for appropriate sources of funding that shall improve the financial health of you business
  • Analyse cost savings and anticipate market reaction for you business’ product or service
  • Reduce your  firm’s tax liability
  • Reduce the likelihood of an audit
  • Provide bookkeeping services

Normally, accountants perform these functions.

 

In fact, the Financial Advisors Act as legislated by the Monetary Authority of Singapore exists for the primary purpose of defining the functions of a licensed Financial Advisor. This brings me to another important point, when cross-checking a potential advisor’s credentials, make sure that they have the appropriate license. This is not only a testament to their skill but this also protects your firm from taking any unlawful financial measures.

 

What can a Financial Advisor do for you?

Like personal financial advisors that help individuals organize their funds effectively, business advisors can help you organize your firm’s funds effectively. Financial advisors that cater to businesses normally focus on 2 main aspects of your business:

 

  1. Wealth management
  2. Wealth protection

 

For today, let’s focus on wealth protection. What is wealth protection? Wealth protection focus on shielding your business from its vulnerabilities. There are two primary ways you can go about this:

 

 

Group or Corporate Insurance  Business Insurance
 You may want to protect your employees by purchasing a group insurance for them. This allows you to retain talent, recruit more talent and maintain or increase productivity. There are several different types of group insurance that you can choose from. These include:

 

  • Group Hospitalization & Surgical
  • Critical Illness
  • Medical Compensation
 

You may want to protect your business through business insurance. Depending on your firm’s industry, you’re exposed to different loopholes. Purchasing a business insurance helps to seal off these holes. To that extent, you can choose from various options including:

 

  • Professional Liability Insurance
  • Property insurance
  • General Liability
  • Cyber Insurance

 

 

There are quite a few options available to you. Your financial advisors can help you make that decision by giving you the best optimization of your corporate insurance structure based on an analysis of your business’ track record. To that extent, as a client, you should help to answer the following questions:

 

  • What is your firm’s current situation? What can be improved? What are some of the challenges that your business is currently facing?
  • How much money does your firm make? How much does it spend? How much does it profit?
  • Where do you want your business to be tomorrow? What is the big picture? What are the most important goals for your company?
  • How much risk can your firm take? Has the firm had any bad experiences with stakeholders?

 

Once you’ve answered these questions, your financial advisor can engage in progressive reviews with you to ensure that your insurance remains tailored to your current financial health.

 

Be prepared – do your research

It’s best to be prepared before you attend a meeting with your financial advisor. This shall prevent you from getting duped by a sneaky advisor. Here are some ways in which you could prepare for a meet up with your financial advisor:

 

  • Finding the right adviser
    • Are they certified? What are their qualifications?
    • What is their area of expertise? For how long have they been a financial adviser?
    • What is the general profile of their clients? How have their client benefitted from their advice?
    • Do they work independently? Or are they part of an agency?
  • Finding the right insurance
    • Do you have any pre-existing insurance policies?
    • Does the government provide any protection? Or do you have to resort to a private insurer?
    • What are the most affordable options? What are the most beneficial options? What is your affordability and benefit availability trade-off?

Patience is virtue

As businesses, we want to be as efficient as possible at the lowest price. But have some patience. The entire process, from the consultation to making the final decision takes time. It doesn’t happen overnight. So, have a little foresight.

 

To learn more about corporate insurance and employee benefits for your business, join our webinar co-organised by JustLogin and Hive Up on the 27th October. Learn about the ins and outs of employee benefits, and how you and your company can stand to benefit from it. Sign up here!

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