By Buntu Bam, certified financial planner at Alexforbes
As we journey through life – from our first jobs to marriage and children, retirement and planning your estate – it is essential to have a certified financial planner. They can guide us through every stage in life, helping us to save enough and leave a legacy for our loved ones.
You need to consider a number of factors when looking for a trusted person to partner with. These pointers will help you find someone you can relate to, and ask to become your adviser.
Professionalism
Accredited financial planners spend many hours on their continuous professional development. Spending this time ‘behind the scenes’ means that they are there to give you best advice based on your needs rather than pushing products on you. Advice you receive should be appropriate, consistent and objective. The financial planner should display a depth of knowledge when consulting with you.
Boundaries
When choosing a financial planner, it is important to understand what their mandate is. If you are looking for investment advice, can they help you to understand your risk profile, deliver insights to current market conditions and recommend appropriate investments when positioning your portfolio? Likewise, what are they not licensed to do for you, such as being your tax adviser or short-term broker? Agree on how and when your review will take place and the service fees. Knowing these factors up front can make the engagement stress free.
Accountability
Engaging with a financial planner does not exonerate you from making decisions. Economies go through peaks and troughs, affecting your retirement and discretionary savings (depending on the investment portfolio). Financial planners have no control over this and in many instances cannot be held accountable. Abdicating decision-making is not a wise call; after all, you are the sole beneficiary of the outcome. It is better to partner with your financial planner who will help you maintain the course or redirect you in light of new information. Sharing life-changing circumstances with your financial planner will better inform their recommendations.
Trust
Part of building a long and trusting relationship is having open and honest conversations. You should be able to talk to the financial planner about your family and personal financial issues, knowing that these matters are kept confidential. The financial planner should respect your story and that of their other clients. If they openly discuss matters of clients with you, then that should be a worrying factor. Know that the financial services industry is bound by the Protection of Personal Information Act, which prohibits financial planners from sharing information that is not in the normal course of business.
Integrity
Certified financial planners are registered members of the Financial Planning Institute (FPI) of South Africa and subscribe to a code of ethics. Adherence to the principle of integrity requires FPI members to do the right thing fairly and consistently in the best interests of their clients, even when no one is watching or will find out. Examples of integrity are:
- keeping promises
- standing up for what is ethically acceptable beyond own self-interest
- acting on principles that go beyond mere legal compliance
- making recommendations as if every decision and action would be open to public scrutiny
- continuously enhancing the credibility of and trust in the profession
The FPI member delivers on the service promise made to the client. Every client should get the best efforts of the FPI member within the limits of their engagement.
Be on the same wavelength
Should you have any queries on your finances, your financial planner should equip you with enough information to make informed decisions. Your financial planner needs to be a great listener to understand your objectives.
The financial journey is a long and important one. You might face many obstacles such as a divorce, troubled children, unexpected illnesses or the death of a family member. You might not have the necessary knowledge and skills to navigate these hurdles, but having an empathetic financial planner who understands your situation will certainly benefit you in troubled times.
Many industry bodies govern the financial services industry to ensure financial planners remain current and that you as the client are treated fairly. If you’re looking for a certified financial planner, a great place to start is the FPI website which will direct you to one in your area.
