Question advisors

Even if you worry each time you see another news report on the damage high fees do to retirement plans, you tell yourself your advisor is an old family friend and feel safe. But there are questions you should ask, such as:

What are your qualifications? Are you licensed to give financial advice?

Do you consider yourself a fiduciary? Do you have any conflicts of interest?

Are you an independent or a tied agent?

How do you bill for your service? At what rate? Are you negotiable? What are my total fees? Not just portfolio fees, the total cost? What are my initial fees, financial advisor/broker/wealth management fees and administration/platform fees, investment management/ fund fees. Are there performance fees? (Ask for a rand figure not percentages )

What is my asset allocation? What is the logic underpinning it? What returns can I expect?

What investment vehicles will I be invested in? What are the pros and cons for each? Is my investment tax-efficient?

What services will you provide (eg tax optimisation, estate planning, insurance advice)?

How do you select funds and fund managers?

And the million-dollar question: Where is your own money invested?

Emma Heap is Chief Growth Officer at 10X Investments