Choosing an adviser
Finding a reputable adviser is step one to investing
YOU’VE been thinking about working out a sound investment strategy, but aren’t sure how to go about finding a erputable ad viser.
Pieter Theron, portfolio manager at Neweconomy F inancial Gr oup, lis ts some point s t o c onsider. 1. LICENCE Is the ad viser registered as a financial services ad viser, either b y as sociation or in his or her o wn cap acity? A w ay of knowing this is if the y provide a licence number. This will enable y ou to check the Financial Services Board website if the y are lic ensed and r egulated. 2. PROFE SSIONAL A SSOCIATION A professional adviser will be well quali fied in a financial field and should be associated with a professional organisation.
The most well known of these is the Financial Planning Institute. Members will have the CFP tr ademark on their business car ds and s tationery. 3. A DIVER SE PRODUCT R ANGE Your ad viser should under stand y our unique situation and plan according to that.
But are they truly as independent as they claim t o be? Some ma y say they are, but off er pr oducts fr om onl y one or t wo pr oviders.
Watch out for bias towards one product provider because of the adviser’s association with the c ompany.
Red flags should go up when an adviser is tied t o only one specific pr oduct provider. 4. ABILITY T O MANA GE YOUR INVE STMENTS Is the adviser really capable of managing y our in vestment f or y ou?
This will only be the case if he or she has an F SP2 cat egory lic ence, w hich gives them the authority to manage and amend in vestment portf olios on y our behalf. 5. DISCL OSURE OF FEE S Advisers should disclose all fees to their clients. These should also be f air and in line with actual w ork done.
Watch out f or ad visers who char ge high fees upfront and still make use of costly in vestment v ehicles.
Investment costs can be one of the biggest v aluedestroying f actors on your in vestment portf olio. 6. C ONTINUITY OF BUSINE SS What happens to your portfolio and its management if your adviser is put out of c ommission?
There should be some kind of long term plan. 7. GOOD-OLD GUT FEEL Trust your instincts. Referral is usually a good b arometer f or sound ad visers. And r emember the old adag e: if it sounds too good to be true, it usuall y is. — Fin24.