Gauteng Community Safety MEC Sizakele Nkosi-Malobane on Tuessday reassured the public that student l.
THE Financial Advisory and Intermediary Services Act puts all South African financial advisers in the same category. They can now be held accountable for any inappropriate or wrong advice given to clients. Previously, before the demise of so many fraudulent investment schemes, it was very difficult to bring a charge against an institution or their financial adviser, as the legal costs could be prohibitive.
It's now much easier as financial advisory organisations are regulated and must have a compliance officer to deal with complaints. Such complaints may be referred to the Fais Ombud, who has the power to make awards in favour of clients, if an adviser had given inappropriate advice.
How to choose a financial planner?
Experience and track record are crucial. Are they an agent or a broker? An agent can only transact business for one company and while a company may have some top products, it is un- likely that every product they have can compete, whereas a broker can shop around.
Capability is one thing, but compatibility between you and a financial planner is imperative as are:
Understanding how the adviser will be paid;
Knowing how the financial planner keeps abreast of changes in legislation, changes in the industry and the depth of his product knowledge.
During your initial meeting, you should be fully aware of the following:
l How does she or he gather information about you. Are they asking the right questions in order to obtain all the information about your financial circumstances;
l How information will be analysed and what recommendations are made to meet your requirements and satisfy your long-term needs;
l All recommendations should be in writing and all costs associated with the products recommended and clearly stated;
l Have they fully explained all the risks associated with the investment? It is very important that you understand as much as possible about risk and realise that there is both an upside and a downside to any growth investment.
The industry has changed in so far as, if you are dissatisfied with the service received, you can move to another, who will then earn the commission the previous broker was receiving. So it is not necessary to switch investments when you change a financial planner.
In recent years, the image of our industry has been uplifted and it compares favourably with any other professional industry.
lThe writer is financial adviser of Bryan Hirsch Colley and Associates. Email email@example.com or telephone 011-880-4888.