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» Financial Advisor 101

October 15, 2018

Financial Advisor 101

When it comes to finding the perfect financial advisor, the most crucial thing for me is trust. I’m looking for someone competent that will walk my financial journey with me, to protect and grow my income and assets and that I will have a sustainable professional relationship with. Finding a great financial advisor should not be seen as a daunting experience but rather as a step that you take towards fully understanding your financial status and future needs.

Here are a few basic Q&As to help you find your trusted advisor.

When is the right time to get a financial advisor?

According to experts, the right time to get a financial advisor is as soon as an individual starts to earn an income. This is primarily because income is the most valuable vehicle that allows individuals to sustain and grow their lives. Financial advisors are there to:

  • advise and service you in order to ensure that your income is protected
  • advise on the required policies for emergency funds, short term saving and medium to long term investing

In some cases individuals that do not earn an income will inherit money from their family. These beneficiaries should also seek advice on the right investment tools to ensure that their inheritance continues to grow and can sustain their lifestyle.

Why is it important to have a financial advisor?

Financial advisors are important because there is a very wide range of financial products and financial service providers. They have been trained on the specific products that they are mandated to advise on and are able to assist and tailor the correct product for you. Advisors also have a wealth of information on how to structure your investment by conducting a personal risk analysis to establish your risk profile. Further to this, as life-changing experiences occur (marriage, purchasing of a new home, starting a new business, becoming a parent etc.), advisors are able to re-adjust your investments and policies accordingly.

Where do I start when looking for a financial advisor?

The simplest place to start is to go onto a Financial Service Provider (FSP) website (Discovey, Momentum, STANLIB, Absa Financial Insurance and Financial Advisors, Investec, Mapheq Financial Solutions etc.)and contact the head office stating that you are looking for an advisor. They should put you through to their advisor departments and an advisor will be allocated to you. This is the simplest way however not the most ideal because you probably will not know much about the advisor you are speaking to. In my opinion, the best way to find a financial advisor is to contact your friends and family that already have a one. They will be able to tell you how knowledgeable, efficient and effective their advisor is and the quality of the service received. It also works to your advantage to find an advisor you can relate to in order to build a sustainable and progressive relationship with them.

What should I expect when sitting with a financial advisor?

Expect a professional that has sound knowledge on the specific products on which they are mandated to advise. You should also expect to answer some personal questions such as your date of birth, salary, highest qualification, assets and marital status/family structure. It is in your best interest to provide your advisor with the most accurate information as this will assist in tailoring the best products for you. The process of obtaining your information is done by conducting a Financial Needs Analysis (FNA). This is why it is important to find a person that you are comfortable with and that you can trust.

Remember, the Working Gal should become comfortable and confident in her finances. She embraces every opportunity to plan properly and ensure that her future is a financially fruitful and prosperous one.

A big thank you to Thinasivuyile Nodada (Financial Planner) – for his invaluable insights on this piece and being my go-to source financial advisor expert 🙂 Give him a shout on +27 82 770 6766 or for more information.