It seems like an incredibly dumb idea to spend your money on someone who will tell you how to spend your money. However, having a financial advisor is an investment that might help you in the long run.

By definition, a financial advisor or planner helps you to invest your money to reach your financial goals. These goals could include retirement, saving for university, minimizing your tax burden, giving to charity, budgeting, debt reduction, or generating income. In addition to helping achieve your goals, a financial advisor should help you understand the strategies behind these investment decisions, so you are better informed.

A fallacy of today’s world is that you need to be of a certain income bracket to have a financial advisor. Financial advisors are widely associated with high-end clients who have a portfolio of assets and large sums of money. However, everyone can stand to benefit from a professional advisor who can provide sound financial advice on how to invest your money and help you realistically reach your financial goals.

Only 13% of South Africa’s metropolitan working class have a relationship with a financial advisor, but this correlates very strongly with income brackets, and the incidence of such relationships is negligible amongst lower-income households.

Old Mutual’s Insights into the South African Market revealed that a majority of South Africans don’t have a relationship with financial advisors for various reasons. A staggering 62% of South Africans believed that they did not have enough money to have a financial advisor, followed by 26% who felt they could manage their finances on their own.

The reasons given seem to be due to perceptions that are prevalent among very specific groups. The perception that they don’t have enough money to afford a financial advisor is the strongest in lower income households, but it is still a significant factor amongst higher earners. The perception that they are capable of doing the necessary planning on their own is held by older, higher earners in particular.

Looking for a financial advisor? Here a few things to consider.

Qualifications

Ask to see the adviser’s training credentials and FAIS accreditation, as well as the products and services they can provide.

Trust and integrity

Get referrals from people you know and trust, or choose a financial adviser who represents a respected financial institution.

Support

Look for a financial adviser who has access to a range of specialist support services to suit your specific needs.

Advice, analysis and products

A good financial adviser will assist in taking stock of your personal circumstances, and regularly update your financial plan to help you reach your goals.

Objectivity

A good financial adviser provides guidance and support that is tailor-made to your unique circumstances.

Commitment and passion

Good financial advisers are passionate about empowering their clients to achieve their goals.

The Comfort Factor

Your financial adviser should be able to identify with your personal circumstances and priorities to better help you realise your financial goals.

About The Author

Chwayita January

Chwayita January, or ‘Ceejay’ for short, is an Honours student in Media Studies and our resident social media and copywriting assistant. Ceejay is a self-deprecating aspiring writer, with a twang that will make you question her nationality.

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