Craig Harding
Not everyone is a financial wiz, capable of fielding their finances with the skill and precision of Jonty Rhodes on a cricket field. If you’re looking to successfully manage your finances, but lack the impeccable groundwork and all-rounder capabilities of our nation’s fielding coach, you should look for a financial coach and partner of your own. There are few better suited to fulfilling this role than a professional independent financial advisor (IFA).
Like any good cricket partnership, working with an IFA takes team work, commitment and understanding over a prolonged period. Since an IFA can offer an objective and informed comparison of products and benefits, they are able to offer advice based on your personal needs and situation.
“When looking for a financial advisor, you should try to find someone with whom you can develop a long-term relationship. Only then can an advisor become your financial partner in protecting your family throughout your lives. The key to finding the right financial advisor or broker is to look for a partner than can help you manage your total risk exposure and financial security – not just purchase insurance. Think of it as the financial equivalent of having Jonty to help you set the field,” says Craig Harding, managing director of Altrisk.
Team selection
As with national squad selection, the financial advisor you choose can determine the success of your efforts. This makes it one of the most important financial decisions you make, so you need to be sure of what to look for. Altrisk asked two leading independent financial advisors for their views.
According to Lawrence Blake of Blake and Els Wealth and Risk Management in Johannesburg, when it comes to choosing a financial advisor trust is key – so you should look for the following attributes:
· Find someone who remains unbiased about the products they recommend. Your IFA should represent more than one insurance company. This allows you to compare a variety of insurance products and decide on the one that best suits your needs.
· Your IFA should be willing and able to determine your needs and find a bespoke solution for you. He should be willing to mould the solution to you, instead of shaping you to fit the product.
· Make sure that your advisor is ethical – they have a moral obligation to act in your best interests and negotiate an insurance deal where your needs come first.
· Look for a financial advisor who will be honest with you about the insurer that you choose, and who understands the importance of issues such as service delivery and claims settlement – purchasing an insurance policy should be about more than finding the cheapest rates.
“The financial advisor should be an expert at what he does, able to compare products and provide advice based on solid knowledge and proven experience in the field. He simply cannot try to equate value to cost when it comes to planning your financial future and security,” says Blake.
Rafieq Saville, principal of Professional Financial Solutions in Cape Town, agrees; adding that consumers are entitled to – and should demand – objective advice and service that is free of bias.
“The independent advisor offers a far wider choice of product and, accordingly, should have a good depth and breadth of product knowledge. This provides the client with better product comparisons and more in-depth technical information translated into easy to understand terms. He should also have a real interest in leading the client to a better understanding of his options and an informed decision,” he adds.
Develop a long-term strategy
Probably one of the greatest advantages to partnering with an independent financial advisor is that they look at your financial portfolio holistically. It would be folly for you to believe that you know everything about how to plan for your long term financial needs, or that you could be entirely objective about it.
A good IFA will looks at your needs and potential risks over a long term – assessing everything from future goals to life cover, critical illness and disability, income protection, retirement, savings, investing, and healthcare funding. Sadly, there is no single product provider that can offer all of the necessary covers in one neat, well-organised and appropriately scoped package.
“The beauty of an independent advisor is their knowledge of the products available on the market, and their ability to combine and manage them for you in a coordinated and integrated manner. This is something that very few consumers have the knowledge or time to do successfully,” comments Saville.
Schedule regular team huddles
Staying in touch with your financial advisor is critical to managing your portfolio and developing his knowledge and understanding of your needs. According to Saville, the regularity with which you meet will depend on your goals. These should be agreed upon with your broker at the outset.
If your objective is simply to set in place a simple risk insurance solution, such as bond cover and a long-term retirement annuity to supplement your company pension scheme, then an annual update may be adequate.
“If you are goal-driven in terms of your finances – perhaps with aspirations to retire young and wealthy, or to leave your job within five years to start your own business – your needs will be very different. Should you fall into this category you will need to work with your advisors to set up a financial strategy. This requires more frequent interaction to monitor investments and ensure strict alignment of your goals and the solutions set in place to achieve them,” Saville adds.
It is also important to consider “trigger events” that may necessitate action or advice; such as retrenchment, divorce, or additions to the family. Any change in circumstance can alter your risk and should be evaluated as part of your financial plan and strategy.
Going for the win
The role of the independent financial advisor has become increasingly important as the global economy undergoes fundamental shifts. Now, more than ever, it is vital to know that the person you entrust with your financial future is a team player.
Opting for a winning partnership could mean the difference between retiring on a winning streak versus going out for a duck!
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