Trust is key in planning for the future
Informed decisions are critical for the health of your finances
WHEN it comes to finding a financial planner you can trust with your finances, it’s important to be sure that this person will guide you in a responsible manner.
A survey conducted last year by the Financial Planning Institute of Southern Africa, or FPi, and the Financial Planning Standards Board revealed how South Africans felt about financial planning.
When it comes to financial priorities, 82% of those surveyed said home ownership was their top priority, with being debt free their second most important.
Retirement and managing day-to-day finances to achieve life goals also rated highly.
If you want to make informed financial decisions, a financial planner who can thoroughly assess your financial position, help you plan for retirement, put together a solid financial plan and help you navigate major financial decisions is important.
The first thing you’ll need to look at is your financial planner’s qualifications.
A financial planner should carry the Certified Financial Planner designation and be registered with the FPi, an independent professional body for financial planners.
“All our members abide by a stringent code of ethics to ensure that the client’s needs are always put first” said Barbara Mundell, a certified financial planner and technical specialist at the FPi.
Experience plays a big role because you also want to make sure your planner understands what they’re doing. You can visit www.fpi.co.za to make sure that the person or company you are considering is accredited.
Your planner should also be registered with the Financial Services Board.
You can verify registration with the FSB at www.fsb.co.za.
A financial planner should be upfront about their fees. Do not proceed until you know exactly how much the fees are.
There are financial planners who charge upfront fees, while others are paid a commission from the investment or retirement products you opt for. If they charge upfront fees, request a breakdown of the services they offer and what you have to pay for.
Whether it’s a consultation fee, drawing up a financial plan or advising on investment and retirement planning, you should know how you contribute to that planner’s income.
You must know and understand all the products you take on before you sign them. Do not be afraid to ask questions.
Another important aspect of choosing a financial planner is trust.
In the survey mentioned above, 87% of respondents rated trustworthiness as very important, but seven out of 10 were unsure who they could trust with their finances.
If your planner is reluctant to answer your questions openly, you should be concerned, says Mundell.
Do not be afraid to ask close family and friends for referrals. Having a trustworthy planner with a great reputation in the field is important.
Remember, this person will be helping you with your financial life and you cannot afford to be careless.