Choos­ing an ad­viser

Find­ing a rep­utable ad­viser is step one to in­vest­ing

Weekend Witness - - Opinion -

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.

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