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How to choose a financial planner

8 October 2021
4 minute read

Lottery winners often spend their fortunes in their lifetimes, leaving little for their family to inherit. Which is why they are offered free financial planning before being paid their winnings! A financial planner can help you too – showing you how to create generational wealth and how to pass it on to your family through many generations. Here’s how a financial planner can help you and your family build and preserve generational wealth, and how to choose the right financial planner for you.

What does a financial planner do?

A financial planner is a qualified professional who advises clients on how to manage their financial affairs so they and their families can achieve their financial goals.

A financial planner will help you to:

  • Budget
  • Save
  • Invest
  • Manage your good debt and avoid too much bad debt
  • Develop good money values and habits such as spending less than you earn
  • Buy the right insurance products, including short term insurance and life insurance
  • Plan your retirement
  • Plan your estate, including making a will
  • Make good financial decisions

Your financial planner will also draw up your financial plan, which is your roadmap or guide to follow if you want to achieve your goals.

Your financial planner will check in with you at least once a year to make sure your financial needs and goals are being met, and make any necessary changes to your financial plan if your circumstances have changed, for example if you get married or divorced.

How do financial planners help you build generational wealth?

Financial planners are personal finance experts who know the best ways to create and preserve generational wealth.

They can both teach and reinforce good money values such as spending less than you earn and prioritising savings by making sure they are an expense in your budget, not an afterthought!

Did you know that people who work with financial planners save more than those who don’t? This is because financial planners not only advise you on your plan and investments, they encourage and help you follow your plan. Without this advice and encouragement, people don’t always invest in appropriate products or follow their financial plans.

To make sure your wealth isn’t spent in a lifetime, financial planners show you how to preserve generational wealth so it benefits many generations in your family. For example, they may recommend an investment plan for your children, or help you set up a family trust fund that comes into being on your death and invests the capital amount, but allows your children to access the income the trust earns.

Where do you find a financial planner?

Certified financial planners are registered with the Financial Planning Institute of Southern Africa (FPI) and you can find a planner near you on their website.

What should you consider when selecting your financial planner?

Choosing a financial planner is a very personal decision. You are effectively partnering with someone to help you grow your family wealth and make sure you and your family are financially comfortable.

Here are the most important things to consider:

  • Qualifications: Your financial planner must be accredited to advise on financial products such as life insurance and investments, and registered with the Financial Services Conduct Authority (FSCA) You can check this on their website. Financial planners may have further qualifications such as a Certified Financial Planner, an international certification which is the highest qualification a financial planner can achieve.
  • Experience: You want a financial planner who can draw on their experience to help you manage your money now and grow your family money for the future!
  • Areas of expertise: Financial planning covers many different areas such as retirement planning, investments, insurance, estate planning and tax planning. Make sure your financial planner has experience in managing the areas you need assistance in, and/or partners with experts in areas they are not experts in.
  • Succession planning: It can be very disruptive when your financial planner retires or passes on. Find out what succession plans are in place so you know you will always be looked after by an expert.
  • Service: How often will your financial planner contact you, do they have monthly or quarterly updates such as a newsletter to keep you informed and are they available to deal with your queries either online or in person? Your adviser needs to check in with you at least once a year to make sure your financial plan and recommended products still meet your financial needs.
  • Fee structure: Fees must be transparent so you know what you are paying, when and how. You can read more about fees on Financial advisers: how do their fees work?
  • Trust: You must trust your financial planner and be willing and able to share personal details such as your current financial situation and your financial goals and dreams. You can ask for an introductory meeting to get to know if a financial planner is someone you will be open and honest with.
  • Indemnity insurance: Financial planners are required to have insurance to protect clients against negligence. Ask if the financial planner complies with the FSCA’s requirements for indemnity Insurance.
  • Membership of industry bodies: Membership of bodies such as the FPI and the Fiduciary Institute of South Africa (FISA) is a great way for advisers to share ideas, learn from other advisers and industry leaders. Plus there are minimum qualifications and experience requirements to join and remain a member, ensuring you are dealing with an expert who is up to date on the latest industry developments.

A guide to help you build your generational wealth

We all need a guiding hand when it comes to money, especially building generational wealth and keeping it in the family. Choose wisely and your financial planner can guide you as you build your family wealth.

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