Members of the public seldom buy insurance and investments directly and usually get these products when approached by an agent or broker.

Members of the public seldom buy insurance and investments directly and usually get these products when approached by an agent or broker.

All too often people buy insurance and investments are sold without fully analysing their needs, but recently introduced regulations will change this practice and require a full analysis of needs.

Consider what happens when someone builds a home. If the foundation is properly laid, then adding to the home will be reasonably painless.

The same applies to an efficient financial programme and we should consider a range of future necessities.

Early death can destroy all of a family's plans if the breadwinner does not have life cover, which will provide capital for the family.

Assess all of the family's debt, as well as future events such as schooling, varsity and weddings to determine how much you will need.

It's good to have a large amount of life cover, but what if you reach retirement age without having provided sufficiently for the years after work? Company retirement funds will seldom cover all your needs.

Sickness or disability can also destroy your plans. Medical aids will cover hospital procedures, but where will an income come from once you're out of hospital?

It is often difficult to substantiate a disability claim, insurance for dreaded disease, which covers ailments such as cancer and heart attacks, is an essential component of your financial plan.

Re-evaluate your financial plan regularly, because whatever you do today needs to be adjusted for inflation. Plans devised today will seldom suffice in the future without being modified along the way as conditions change.

Your ability to buy life and disability insurance depends on your health. So your plans must change if your health changes.

Make use of tax deductions allowed for a retirement annuity to provide a pension at retirement.

Most families rely on more than one person to generate an income, so both spouses should provide for the future. Can you imagine reaching retirement and having to live on only one of the two salaries?

Many marriages in South Africa do not survive, so though both spouses should plan together, each should have a separate financial plan.

Don't put all your eggs in one basket. Wise investors diversify their investments among equities, properties, bonds, cash and hedge funds.

lBryan Hirsch is chief executive of Pioneer Financial Planning. Visit www.pioneer.co.za or e-mail help@pioneer.co.za for more information.