Why do I need a financial planner?

A financial planner’s overall objective is to build and protect a client’s net asset value as efficiently as possible and help clients to achieve certain life goals through a combination of professional advice and various financial services/products.

Did you know?

• According to National Treasury, only 6% of South Africans can retire comfortably without having to drastically reduce their standard of living, become financially dependent on someone else, or keep on working.
• The oldest person in the world is currently 119 years old. Life expectancy has increased drastically across the globe due to medical advancements and improved healthcare. This has a massive impact on your financial planning.
• Over 70% of working South Africans don’t have a will. This means that their assets will get distributed according to the rules of intestate succession.
• If you don’t have income-generating assets that take care of your living expenses, your most important asset is your ability to earn an income. You have to protect it!
• Most peoples’ estates at death in South Africa don’t have the required liquidity to settle their debts, taxes, and other costs for winding up the estate. This means that one’s executor might have to sell assets in the estate to cover the shortfall, which could leave your loved ones in a difficult financial situation.

There’s a massive lack of financial education in South Africa. One of my clients told me the other day "I wish they taught us how taxes work in school instead of sex ed." I have to admit, that really tickled my funny bone. It’s vital to consult with your adviser, draft a financial plan and conduct regular reviews to keep your plan up to date throughout the journey if you want to achieve your financial goals.

Typical products/services that a financial adviser would offer include retirement & investment planning, estate planning, tax advice, insurance, employee benefit schemes, corporate financial planning, etc. Some are more specialized in certain fields and might be able to offer additional services as well.

The best type of adviser to consult is an independent financial adviser with the CFP® designation (certified financial planner). An independent adviser isn’t tied down in terms of which company’s financial products he has to offer to his/her clients. Independent advisers can offer you the best solution in the market for your specific needs. If a financial planner has obtained the CFP® designation, it means that he has studied financial planning, gained experience in the field, and passed the FPI’s professional competency exams. It also means that they must always adhere to the FPI’s Code of Ethics and act in the best interest of their clients.

Lastly, be sure to choose your planner based on his/her moral values as well. It could make a huge difference!

“A goal without a plan is just a wish.” – Antoine de Saint