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5 questions you may be too embarrassed to ask your financial adviser

By Opinion Time of article published Mar 16, 2021

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Do you have burning questions that you would like to ask your financial adviser but you’ve always been too embarrassed to ask?

Paula Walker, a director and advisory partner at Consolidated Wealth, says that financial planning can be complicated, but your adviser is there to help you to navigate any uncertainty you may have.

“Certified advisers study for years to become experts in the field but ultimately, this is a people-oriented profession,” she says. “One of our greatest responsibilities is to make our clients feel comfortable and this includes educating them to ensure they receive the best advise that’s tailored to their unique circumstances. So there is no need to feel embarrassed about asking what you may believe are obvious questions.”

If you are one of those people who have nodded along while your friends talked about their financial planning only to secretly search the conversation afterwards, here are Walker's answers to what may be some of your embarrassing questions.

1. If I am in debt, will you be able to help me?

In the world of finances, managing debt is a specialised field and if you are in a fix, your best option is to speak to a qualified debt counsellor. Their job is to help you get out of debt and they will negotiate on your behalf with your credit providers. Once your finances are under control and you have cash reserves, then an adviser will help you achieve your financial goals such as saving for your retirement, buying a home or putting your children through university.

2. How do you get paid?

This is actually an important question that you shouldn’t feel embarrassed about asking. There are a number of ways that financial advisers get paid. Advisers are remunerated by either commission, fees or a combination of the two. Traditionally most advisers received commissions from the company whose products they were selling, but recently more advisers are opting for fee-based planning. This has distinct advantages as the adviser can remain totally objective. There are, however, some advantages to the commission route: you can view the adviser’s quality and level of financial planning before incurring any costs. Whatever route you choose, make sure you have clarity on the exact method of remuneration before proceeding.

3. What is compound interest and how does it work?

Compound interest is when you earn interest on your interest. Let’s say you invest R10 000 at a realistic rate of 6% per year. In one year, your money will grow to R10 600. If it’s in an interest-bearing account, in the following 12 months, you’ll begin to earn interest on your original investment as well as the interest it has accumulated. So depending on the outcome required for your investment, the longer it remains invested, the better!

4. Is there a minimum amount I need to invest?

This is one of the most common questions asked by people who want to start investing. The answer is that the amount that you invest as well as the outcome required by the investment will determine the type of product that will be best for you.

5. Do I need a financial adviser?

Managing your money and making the right financial decisions takes time, skill and effort. Working with a qualified adviser will ensure that you have a long-term plan for your money, that you are making decisions that are tailored to your circumstances. A Financial Adviser will help you to make and save money in the long run by keeping you on track and proactively identifying any financial risks and opportunities.

Walker says you should never feel embarrassed about asking even the most basic questions. “Your relationship with your financial adviser is a long-term partnership that is based on trust and it’s our job to make you feel comfortable that your money is in the best hands.”


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