Karen Carstens, a fiduciary adviser from PSG Wealth Tygervalley, responds: The purpose of proper fiduciary advice should be to uncover a specific need and deliver the most appropriate solution in the most cost-effective way. You pay for a bespoke solution, tailored to your needs.
A common request to fiduciary practitioners is to evaluate or provide a second opinion on estate planning structures that were obtained for free (or even copied from a website). A standard template can be adequate for drafting a legally enforceable will that deals with the most basic of situations, but this is the exception rather than the rule.
The value of obtaining quality advice from a specialist fiduciary practitioner often far outweighs the cost of advice. Professional assistance is the only - and, in the long run, the most cost-effective - way to structure your estate to go the distance.
PLANNING WITHOUT YOUR SPOUSE
I’m happily married and can’t imagine that changing, but I’ve heard I should focus on own short-term and retirement savings. Is this true, or can I plan for my financial future with my partner?
Nerine Brink, a financial adviser from PSG Wealth R21 Employee Benefits, responds: To do financial planning in combination with your partner is good, as long as you keep financial independence in the marriage. Here’s why:
* Planning for divorce. Good financial planning provides for all possible scenarios. It is best to plan in case things go wrong.
* Planning for illness or injury. You need to prepare financially for illness, injury, temporary loss of income, disability or death. A diversified, well-structured investment portfolio will also help to make up for any shortfalls.
* Planning for death. Planning appropriately before it’s too late prevents additional stress during a very difficult time. There are many considerations, such as how much access will be needed to short-term investments and the impact of tax.
* Planning for retirement. There are a few cases where one partner can make provision to fund both parties to retire comfortably. I advise communicating about retirement planning and the structures that are in place to ensure both partners are taken care of, not only with sufficient financial provision, but also to ensure that nominated beneficiaries protect the remaining partner if anything happens to the owner of an investment product.
* Planning for short-term happy events, such as expanding your family or a special trip overseas.
A professional financial adviser will assist in compiling a comprehensive plan that addresses both of your long-term and short-term financial needs and goals.
MY PARTNER HAS A LOT OF DEBT
I’ve fallen in love with someone who is in a lot of debt. We’re thinking of moving in together and hope to marry someday. I don’t want to offend my partner, but how do I protect myself financially?
Magdeleen Cornelissen, a financial adviser from PSG Wealth Menlyn, responds: I love the idea of falling in love, but I also love the idea of financial independence. The ideal is to have both, and you can make it happen if you take the right decisions. Debt should not be the only thing you discuss around the dinner table.
Avoid tiptoeing around this topic, as it affects you both. Have an open-hearted discussion about the history behind your partner’s debt and be supportive through the process of them reducing their outstanding balances, celebrating their successes as they go.
Do not sacrifice your own saving goals; you need to be in control of your own finances. Hopefully, your partner will follow your example. Both of you will benefit from your financial independence.
Before you walk down the aisle, set up an antenuptial agreement. Failing to do so could mean being married in community of property, resulting in you sharing the debt. I strongly advise you ensure that both of you have a will. These two documents are far from romantic, but will keep you both safe.
The support of an accredited financial adviser provides guidance on all of these issues and will help steer you both towards financial wellness for now, and the future.
HOW HOLISTIC IS FINANCIAL ADVICE?
Does a financial adviser help with all my finances, or is the advice limited to the investments I have?
Marzel Swart, a financial adviser from PSG Wealth Pretoria East, responds: A good financial adviser will aim to provide holistic advice to help you reach your financial goals. Their role might overlap with that of other professionals, but to meet a client’s financial goals they will consider taxes, budget and spending patterns, retirement planning, various types of risk cover, investment products, asset allocation and estate planning.
Because financial services can be complex, many advisers specialise in one field but have referral agreements to ensure their clients benefit from a comprehensive service. It is best to clarify with your adviser upfront what their offering entails, ensuring they have support structures to provide holistically for your advice needs, where they focus on specific area.
WOMEN CAN BE GREAT INVESTORS
How can I get over my fear of the stock market?
Amelia Morgenrood, wealth manager: securities at PSG Wealth Faerie Glen, responds: Many women tend to make excuses when it comes to the stock market, such as not having enough money to invest, not understanding the stock market and not having enough time. Many of us buy into the misperception that women aren’t good investors and will make mistakes and lose money. In a nutshell, we can lack confidence.
The truth is that women have the potential to be great stock pickers. We are generally less aggressive, we do more research, and we are able to identify a bargain.
Investing in shares is not particularly complex or mysterious. Simply think of it as buying a small part of someone else’s business. It’s probably easiest to start by investigating companies with which you’re already familiar and comfortable as a consumer.
Realise that you already possess all the skills required to invest in shares; you just haven’t necessarily put them to use in this context. Your fear of risk and losing money can be addressed by increasing your knowledge and finding a professional adviser who can help to address any gaps in the information you need, tailored to your unique circumstances and investment goals.
Email your queries to [email protected] or fax them to 021 488 4119. This feature is sponsored by PSG Wealth.