Financial advice to manage your wealth
Investing in great financial advice from an independent advisor can lead to improved returns on investments and risk products. Simply working with an independent advisor means you have a relationship with a professional that works for You and not a product provider.
Having access to all the products offered by all companies means that you have a significantly better fit when your CFP matches your needs to the right product. Not all solutions are exactly the same and neither can every financial need be met with the same set of solutions all the time.
If one set of solutions worked for everybody we would only have one investment provider and one insurer offering solutions to clients.
Would you trust a plumber that came to your house with one sized spanner in his toolbox? It will definitely work some of the time but not all the time. We believe it is dangerous to try to make a clients’ need fit with a product, rather than find the best product for the client.
Often there is no product needed since a lot of financial problems are solved with good advice on what to do and how to do it. It is like the difference between going to see the doctor and going to the pharmacy. Going to the doctor costs you a consultation fee and he will run tests and sometimes based on the results recommend you get some medicine, but often he will advise you to change certain things to relieve the problems you have such as a change in diet or more exercise. These recommendations do not need you to do buy medicine from the pharmacy.
Just like when you go into the pharmacy you know you are going to buy medicine in the same way you need to realise when working with a product provider, you are there to buy a financial product. There is a very definite difference between needing advice and needing a product.
Manage your wealth with someone you can trust. Learn how independent professional advice can be used to your advantage.
With the help of a Certified Financial Planner, you can uncover the needs you don’t know you have and put a plan in place to reach the goals you set for yourself.
As is often said “Failing to plan is planning to fail” - Benjamin Franklin
What does a Financial Planner do? A Financial Planner definition.
An independent financial planner is someone who does not work for a product provider or firm, they work for you, the client. They are not tied down or incentivised to sell you products. You get independent advice that is tailored to your needs. A professionally qualified planner should work on a fee basis. This ensures that all parties to the relationship have their interests aligned.
They come equipped with all the tools necessary to deliver the best possible help that they can to their clients. There are numerous benefits of working with an independent advisor. We have listed the 4 main benefits below:
3. Peace of mind
Let’s unpack each of the above-mentioned advantages in more detail.
This means that the financial planner has the freedom to decide on which investment options to offer or not offer to their clients, without having to fill quotas and meet sales targets. Often the best investment is your own debt and not another unit trust.
One of the greatest advantages of working with an independent advisor is the aspect of having a professional client-trusted advisor relationship similar to that of your lawyer or accountant. They need to build a strong understanding of your situation and goals to align their advice with your goals. Often, this leads to a personal and attentive relationship that progresses over a period of years and you work together to meet your set goals. It is Not a transaction based “customer- salesman” relationship.
Peace of mind
If anything had to go wrong, you are protected. Your assets are also safeguarded as independent financial advisors use independent custodians. A contractually defined relationship ensures you know what to expect from your advisor and that he has your interests at heart and acts in your interest.
Your financial planner will spend a great deal of time researching and exploring every single solution available, before presenting you with a wide range of financial options and comparisons. A critical component of wealth management is making sure the professional you are working with is FAIS compliant. Having a range of options also creates the opportunity to compare and save fees when deciding between similar solutions.
Understanding what FAIS compliant is
FAIS stands for Financial Advisory and Intermediary Services. What this means for you, is that there is an act in place that ensures that you receive sound financial advice, specifically tailored to your financial needs.
To pursue a career in the finance/insurance industry and qualify to deliver financial advice, one must be equipped with a FAIS accreditation and hold a license from the FSCA (Financial Services Conduct Authority). In a nutshell, the act is there to protect you from your advisor making unsound financial decisions and pointing you in the wrong direction. It also offers mechanisms for recourse if the requirements as laid down by the act are not followed.
The importance of using a CFP© (Certified Financial Planner)
A certified financial planner is someone who has a post-graduate qualification and a minimum of 3 years industry experience. They must also be a member of the Financial Planning Institute of South Africa and hold to the code of ethics and standards of practice.
Of the more than 100 000 registered advisors currently, just less than 5 000 are CPF’s. That means that less than 5% of advisor have a degree and a postgraduate qualification. When making important decisions regarding your future, choose to work with a properly qualified and experienced planner.
No single company exists that is the best at doing everything. This is why it is important to use an independent individual who possesses a wide range of options available to align your needs with the appropriate solutions.
By working with a certified financial planner, you can be assured that you are working with a professional who is qualified to give you the right type of advice and not just a product salesman.
How to find a financial advisor
The process of finding the right financial advice that will provide you with the best solutions is not always simple. Below we have compiled some advice when asking yourself the question of: “which advisor is right for me?”
1. Consider your needs and requirements
2. Do your homework
3. Compile a shortlist
4. Ask questions
5. Take your time
Through considering your answers to the above-mentioned questions, you will be better equipped to make the right choice, when choosing your preferred advisor.
Consider your needs and requirements
Figure out what services you require. Do you want to implement a product only for a specific need you have identified yourself or do you require advice and help to identify your needs? Do you need retirement planning advice or are you just after investment advice or estate planning? This will help you figure out your service expectations. Some planners are specialists in certain fields. Knowing what you want will help you choose your professional advisor.
Once you have done this, it is important to factor in the aspect of life transitions such as marriage, divorce etc as this will have some effect on your choice of independent advisor. Certain advisors specialize and work with clients in a specific phase of their life.
Do your homework
Read up on different advisors and the services that they offer. Different advisors have different approaches and processes that they use. Meet up with as many as you need to, this will help you become more knowledgeable on the subject before diving in.
Compile a shortlist
Connect with advisors to get a feel for their personality. It is important to remember that just because a certain advisor was a good fit for a friend, colleague or family member, it doesn’t necessarily mean they will be a good fit for you.
Don’t be shy to ask questions and be inquisitive. It is important to know if the financial advisor you are looking for will be able to provide you with the service(s) that you require.
Some questions that you may ask are as follows:
• “What are your expectations of me in terms of the level of involvement?”
• “Do you have experience in working with people who are in a similar situation to myself?”
• “Could you enlighten me as to what your process is?”
• “Do you think that you will be a good financial advisor for me, and if so, why?”
Take your time
There is no rush to decide. Instead, take your time and decide what will be the best for you regarding financial advice. At the end of the day, taking on a financial advisor to help you decide how to manage and improve your financial future is a very personal preference.
To learn more about working with an independent advisor, get in touch with our experts and we will help guide you in the right direction.