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Top 10 questions for finding the right financial advice

Top 10 questions for finding the right financial advice
27-02-14 / Staff Writer

Top 10 questions for finding the right financial advice

But how does one find a good financial adviser? How does one choose one that will be a good fit for your financial needs? Jaco Coetzee, general manager of Sanlam Financial Advisers suggests asking family or friends who are in the same life stage as you, for referrals, and then compiling a shortlist of at least three candidates. He recommends setting up a face-to-face meeting with each candidate, and asking them the following questions:

What qualifications do you have?

It is crucial that your financial adviser has an industry acknowledged qualification such as the internationally recognised Certified Financial Planner (CFP) qualification. You should also check whether he or she is licenced with the Financial Services Board (FSB) as a financial services provider or the representative of a provider.

How will you be remunerated? Your adviser may receive either commission on products sold, or a payment for advice rendered, or a combination thereof. This could be an hourly rate, a retainer or a percentage of the assets managed for you. Make sure you know how your adviser will be paid before you proceed.

What services do you offer?Choose an adviser who can offer assistance with an extensive range of services and can offer integrated advice. However, if you need specialised advice, you may want to obtain the services of an adviser that has in-depth knowledge of the area in which you are interested, for example, estate planning.

Can I see an example of a financial plan you devised?The strategy should be thorough, but clear and easy to understand, with minimal jargon. A good financial adviser will not mind going over the plan repeatedly until you are confident you fully understand it.

Do you require a minimum investment?Some firms and financial advisers will deal only with those in a high income bracket who have a large amount to invest.

How long has your firm been in business?It is best to choose an adviser who is affiliated with a financial services organisation that has been in the business for many years and has an excellent reputation. Not only is your adviser then likely to be well-trained, but he or she will also have access to strong support as well as in-house expertise on all aspects of financial planning.

How long have you worked in the industry?While experience is very important, do not discount younger financial advisers - they are generally well trained and may also be more technologically advanced than older advisers. What is crucial is that the adviser has specialist experience in the particular financial services you require.

How will you update me about my investments? And how often?Find out how often your adviser is prepared to meet with you to discuss your financial needs, and whether you will be meeting with him or her personally or with an assistant. It is also important to know how often you will receive written updates on your investments.

Then, ask yourself the following questions:
Has the adviser asked me the right questions?The adviser should be eager to find out more about you - to understand your particular financial goals and investment objectives. He or she should at the end of the meeting show insight into what is important to you and how your financial goals can be achieved.

Does the chemistry feel right?When all the other questions have been answered, you need to feel you trust the person enough to be completely open about your finances. You will be establishing a long-term working relationship with your adviser, and it is crucial that you feel he or she will at all times have your best financial interests at heart.

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