If you are investing money, you don’t have to use a financial adviser (or planner); you can do it directly through most asset managers, if you know what you want. But a good adviser is worth the expense if you are looking beyond a once-off investment, for a long-term financial plan that ensures that you and your family are financially secure well into the future and into your retirement.

Financial Planning Week, promoted by the Financial Planning Institute of Southern Africa (FPI), coincided with World Financial Planning Day, which was on Wednesday, October 4. During the week, many members of the FPI gave of their services free of charge. 

Jeanette Marais, the director of distribution and client service at Allan Gray, says not every investor may need, want, or be able to afford an adviser, but there are times when seeking professional advice makes all the difference.

“Good, independent advisers play an important role in helping you to make decisions that are right for your circumstances,” Marais says. She says that although you may be reluctant to fork out the advice fee, advisers can save you money in the long run, earning their keep time and again.

So when should you seek counsel on your finances? Marais lists five prompts:

1. You want to put a plan in place, but you have no idea where to start.

“A financial adviser can help you to develop a long-term plan that meets your objectives,” Marais says. “An independent professional can help you to shape your future commitments into realistic goals. He or she will also help you to keep on track in uncertain times. If your circumstances don’t change, your plan shouldn’t change.” 

2. You need to choose an investment product, but you suffer from analysis paralysis. The trouble with today’s investment market is that there is so much choice, not least between active investments (in which an expert fund manager chooses the underlying securities) and passive investments (funds that track a market index and require no research or selection on the part of the fund manager). 

“Different products suit different investment objectives – some have tax benefits and others have restrictions that you need to be aware of before committing your money, Marais says.

“While researching every product available is not impossible, it can be overwhelming and time-consuming. An adviser will assist you in working through the options and making choices suitable for your situation,” she says.

3. Your circumstances have changed, or are about to change. Getting married or divorced, having children, inheriting a large sum, losing your job, losing a spouse, retiring: these events introduce financial challenges.

“Managing your money during such events can be confusing, and balancing your responsibilities can be tough,” Marais says, adding that financial advice is crucial in navigating the questions that inevitably arise during any of these big events.

4. You are changing jobs and need advice on your retirement savings. “If you are changing jobs, make sure you preserve the retirement savings you have built up. If you do not, your retirement plans are likely to suffer a setback. Not only do you land up spending the capital you have accumulated, but you give up the future compound interest,” Marais says. 

A financial adviser can help you to stay on track and deter you from spending your retirement savings when you change jobs.

5. You are drowning in debt. In this case, your first port of call should be a reputable debt counsellor. “As with financial advisers, not all debt counsellors are alike,” Marais says. Only counsellors who are qualified and registered with the National Credit Regulator may offer debt-counselling services.”

Getting personal

Francis Aldrich, a Certified Financial Planner and technical marketing specialist at PPS, says the ideal relationship with a financial planner should be similar to the one you have with your family doctor or personal trainer. And just as you would go for regular check-ups for your physical health, so you should regularly see your adviser to keep tabs on your financial health.

“The new breed of financial planners are not simply interested in selling products. Their purpose is to assist you to achieve your life goals by providing lifestyle-based financial plans. 

“A lifestyle financial planner is there to coach you to become financially fit. Therefore, it is imperative that you are honest and disclose as much information as possible to get the most benefit,” he says.

“Just as you would tell your personal trainer about your current diet and activity levels so that he or she can help you to reach your fitness goals, you need to be open with your planner. 

“A good lifestyle financial planner will be professional, but personal too. Financial matters are often about much more than the numbers. Getting personal means that your planner will make an effort to understand who you are and what you want to achieve,” Aldrich says.

Before drawing up a financial plan and recommending a course of action, the planner will conduct a thorough analysis to assess your investments and financial situation, and determine your financial needs and goals.

Aldrich says that one of the main reasons people do not engage with a financial planner is because they feel they can do it themselves or that it is too expensive.

“There are many benefits of using a financial planner and many different ‘packages,’ ranging from basic to comprehensive or bespoke solutions to meet your price point.” 

What you pay your adviser is negotiable: it could be a percentage of your investment or a straight fee, as you would pay a doctor. 

The fees you are charged must be agreed to upfront, and anything that the adviser may earn extra in the form of commission or rebates on financial products must be disclosed to you before you sign the agreement.


THE financial planners or advisers best qualified to give you a professional service are those with the post-graduate Certified Financial Planner (CFP) accreditation, and who are members of the Financial Planning Institute (FPI). To find one in your area, go to the FPI website, www.fpi.co.za. Independent advisers and advisory firms that are not linked to the big financial product providers are more likely to give you unbiased investment recommendations and will have a wider range of products from which to choose.

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