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Financial Advisers
Tuesday, February 11, 2014 - 03:16
What is suitable?

Finding an advisor that suits one’s specific needs can be a daunting task. Renier Hugo of Seed Investments provides some key questions to ask when choosing a financial advisor:

How do they charge for their services and how much?

It is important to ask whether they charge an initial planning fee, whether they charge a percentage of assets under management or whether they make money on selling you a specific product. By doing this you will know whether they have an incentive to sell you certain products and may be biased towards them. Independent advisors represent several companies while tied agents are usually restricted to the company they are employed by.

Credentials and certifications

It is best to go with an advisor with a globally recognised financial designation, including CFP/CFA/CA/Actuary. These certifications ensures that the financial planner meets the highest international level of education, experience and ethics for providing financial advice. Ideally one wants an advisor that is both qualified and experienced.
Even more important will be to check whether they are licensed with the FSB (Financial Services Board). An easy way to check this is to enter their details on the FSB website -http://www.fsb.co.za/FAIS/Search_FSP.htm

How often will the advisor communicate with you and what makes their client experience and service unique?

The regularity of meetings between you and your advisor will greatly depend on your personal goals. If your goals are, for instance, to retire within 10 years or you want to save up over the next 5 years to start your own business, one would expect a thorough evaluation and meeting at least twice a year. If, on the other hand, your objective is to assist your financial wellbeing in 40 years’ time and the product is a long term retirement annuity, an annual meeting may be more than enough.

Another important question will be what is the advisors area of specialisation?

It is difficult, and probably impossible, for a single person to become an expert on all aspects of financial advisory as the playing field is just too big.
At Seed Investments we specialise in multi management but, coming from the wealth management space, we have recognised that there is a need to provide clients with consolidated or holistic investment reporting.
It is fairly standard from a wealth management perspective to recommend an appropriate investment portfolio for a new client but it becomes very complicated to consistently report to the client on their consolidated portfolio. The reason for this is because a client’s assets are usually spread across various platforms and each has its own method of reporting.
It is important for both the advisor and his clients to know exactly how their investments are positioned. A consolidated investment report, across all platforms, does just that.
At Seed, our wealth managers make use of consolidated reporting for their clients. This ensures that they can focus their time on providing financial advice and the ongoing management of client portfolios. Ongoing professional reporting ensures that both parties are fully aware of the client’s consolidated position on a monthly basis.
 

Copyright © Insurance Times and Investments® Vol:27.2 1st February, 2014
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