Things to look out for

Q: What should retail investors look out for in a sales process?

Don't be afraid to ask questions even if they may sound stupid. These may include queries like why you need to do a fact-find and why the adviser is recommending that product to you.

Mr Tan said that clients who buy investment products such as unit trusts and structured products should be given a prospectus.

If it is an insurance plan, they must be given a product summary, benefit illustrations and a copy of Guide To Life Insurance. They should also ask the adviser to explain financial terms in simple English.

Shun advisers who suggest to you that you should opt for 'product advice' or 'no advice' sales, because it is an indication that they are keen to make a quick sale.

An exception to this is if it is a routine top-up of the same type of investment and your financial circumstances have remained unchanged, said Mr Leong Sze Hian, president of the Society of Financial Service Professionals.

Under no circumstances should you be pressured to sign any document. Take your time to consider what is being offered and keep a clear mind about what you are investing in.

If you do not understand how an investment works, do not invest in it. Be suspicious if a marketing brochure promotes very attractive returns and always ask for the worse-case scenario.

If you are in doubt, consult another adviser.

This article was first published in The Straits Times on November 09, 2008.