When we were younger, financial planning was easily the last thing on our minds. However, as we grow older, we realise how important it is to ensure we have a stable financial future.
What’s more important, is making sure you take into consideration the criteria your financial advisor should meet, before you hire them.
Some may think that all financial advisors are the same and that it won’t matter which one you choose.
However, each advisor has a different approach and employs different strategies while some even specialise in certain fields of finance.
Therefore, before you choose your financial advisor, you will need to take a look at what your ultimate financial goal is and which will be your preferred method of achieving it.
Although it’s important to work with someone you trust, choosing someone who is familiar to you may not be in your best interest. This goes for friends, family and even the person your best friend recommends.
When you have a personal or emotional connection with someone, it becomes harder to be completely transparent about your financial situation. In addition, you may feel that you cannot express when you are unhappy with your advisor’s performance or strategy out of fear that it may affect your personal relationship.
Using a friend or family member as a financial advisor comes with many limitations which may hinder your financial progress.
Ask for a list of clients as well as a CV which should confirm that the financial advisor has completed the necessary requirements to take the CFP (Certified Financial Planner) exam and has completed the exam successfully. Furthermore, look for someone who has a few years of experience and adheres to the Financial Planning Institute of Southern Africa’s Code of Ethics and Professional Responsibility. Should you have any issues related to the conduct of your financial advisor, this professional body will undertake investigation on your behalf.
You have hired a financial advisor to discuss you and your financial situation. Be wary of anyone who is focused on the products they are selling, rather than your specific and individual wants and needs, this may indicate that they may not have your best interest at heart. The focus should be on your current financial situation as well as your short and long-term goals, and how you would like to achieve them so that your advisor may offer you the best possible advice.
Your advisor is likely working with several other individuals from all walks of life, each of whom have different challenges, needs and goals. Some are more willing to take risks while others are more conservative and there is no one product or investment plan to suit everyone. Therefore, when your advisor makes a suggestion regarding a new move or change in your portfolio, it’s important that you question them. Ask what the benefits are and why your advisor thinks it’s the right move for you.
A good financial advisor will always be open to answering your questions and putting your mind at ease.
South Africa’s financial advisors are placed under immense pressure due to the administrative demands that come with the profession. These demands protect the consumer; however, it can take up a large portion of your advisor’s time.
Therefore, it’s important to make sure your advisor has enough time to stay up to date with the markets and all the new products being launched on a regular basis.
Additionally, your advisor must be able to be identify specific opportunities for you when they arise.
Ask how many clients they already have and if they already have enough or too many, take a look at finding another advisor.
We offer in depth, professional and personalised financial planning services in Johannesburg. For more information, contact us.
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