Chances are high that your financial adviser found you and not the other way around. Your cousin, who just joined up with X insurance company, spotted an opportunity to set up a meeting. You think to yourself: “How convenient!” and not even in a sarcastic way. It must be fate, right? Look, your cousin may be a great guy, but it doesn’t mean he’s the right financial adviser for you. So, how do you know if he’s ‘the one’?
How Do You Know If Your Financial Adviser Is The Right Fit For You?
The cost of living in South Africa is rising at an alarming rate. Inflation has escalated, certain medical cost increases have exceeded inflation, and personal tax has gone up. It’s not surprising that people don’t pick up the phone to invite grudge purchases like life insurance. “Now” expenses are already so pressing that it’s easier to ignore “later” provisions.
But that’s where a good financial adviser comes in. Financial advisers tell you what you need to hear, not only what you want to hear. They make sure you look out for your future and your dependents, even when doing so is uncomfortable. And they force you to take your head out of the sand and look out for future you. They do all the homework to compare products and benefits to taylor to your needs, so you don’t have to.
That said, not all financial advisers are great. It’s a tough job to crack and not everyone’s cut out to invest in your financial wellbeing. Throughout your life, your financial needs will constantly change. That’s why it’s important to have someone who is with you until the end. We’ve listed five questions you should ask a potential financial adviser to figure out if he or she is right for you.
Five Questions To Ask a Potential Financial Adviser
1. Are You Tied or Independent?
If an adviser is what is called a ‘tied agent’, it means they’re only allowed to sell products for one company. An independent financial adviser is able to present you with options from almost any financial institution they have relationships with.
This is a tricky one. While the choice seems obvious here, you also have to look at motivations. A tied agent may have chosen to represent only one company, but why? They may have chosen one company because they believe in that company and its products. They are also able to focus on the intricacies of the products they can offer you because their attention isn’t split between a multitude of options.
You want to get to know the person in front of you and if they have your best interests at heart. Who they work for is minor in comparison to that.
2. Do You Buy What You’re Selling?
This is very important. Who wants to buy life cover from someone who doesn’t have life cover? Not us. If someone is influencing your financial decisions, throughout your lifetime, it should be someone who believes wholeheartedly in what they’re doing. It just speaks to integrity.
3. Where Do You See Yourself In 10 Years?
Truly great financial advisers are those who see themselves as financial advisers until they retire. You don’t want to be taken care of by someone who has secret aspirations of being an actor. This is a career that comes with a lot of bells and whistles, and some people are drawn to it for the wrong reasons. For example. being able to be flexible with your time so you can attend auditions. Pick a side, man. Pick a side.
4. When Will I See You Again?
No, he/she won’t think you’re needy. A good financial adviser will want to see you regularly. Annual reviews are industry standard. If he doesn’t call you back in a year, it’s not just a case of “he’s just not that into you (and your finances)”. He’s not invested in you, and it may be time to shop around.
5. Do You Have Indemnity Insurance?
Even if you decide this is the financial adviser for you, you have to make sure that you’re insured against any mistakes he or she may make. This is what indemnity insurance is for and all good financial advisers should have it to protect their clients. If you’re underinsured for critical illness at no fault of your own, you want to hear more than an “oops” at claim stage. At the end of the day, you want to be covered, in full.
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