FPI’s 10 tips on choosing a financial planner

The Financial Planning Institute of Southern Africa (FPI) has the following 10 tips for you if you are looking for a planner to help you with your finances and investments:

1. Be prepared.

Do some research to familiarise yourself with financial planning terms and strategies. While a good financial planner will explain things to you, understanding the basics will allow you to engage more.

2. Think about your financial and personal goals.

Financial planning is about putting the right strategies in place to meet your life goals. Take the time to reflect on what’s most important to you for both today and tomorrow.

Ask friends and family members you trust if they know of or have worked with financial planners they would recommend.

3. Ask for referrals. 4. Verify the financial planner’s credentials.

Get referrals from sources you trust, but also verify the credentials of any financial planner with a professional body, such as the FPI, to confirm that he or she is in good standing.

5. Interview more than one financial planner.

Interview two or three planners, either by phone or in person, about their qualifications, experience, areas of expertise, their approach to clients, and their personality.

6. Understand planners’ fee structures.

Understand how your financial planner will be paid, as they are compensated in a variety of ways (for example, through commission, feeonly, or salary).

7. Look for competence and ethics.

Planners have a variety of different designations. Some designations require only day or weekend courses to qualify. Others, such as the Certified Financial Planner (CFP) certification, represent high standards of experience, competence and knowledge, as well as on-going adherence to a code of ethics and professional responsibility.

Insist on a written letter (an engagement letter) outlining the terms of the engagement, any potential conflicts of interest, how the planner will be paid and his or her business affiliations.

8. Get it in writing. 9. Re-assess the relationship regularly.

Regular communication is imperative. Make sure your planner understands your needs as they change over time and updates your financial plan accordingly.

10. It’s all about trust.

If you don’t feel comfortable discussing personal issues with a particular financial planner, continue your search. Honesty, trust and communication (on both sides) are crucial to the success of your planning relationship.