WITH each new asset we purchase or commit to purchase, there will always be a contract. Such documentation exists because when new cars, homes and other investments are bought, an official agreement is entered into by the seller and the buyer, binding both parties to the terms and conditions of the sale.

WITH each new asset we purchase or commit to purchase, there will always be a contract. Such documentation exists because when new cars, homes and other investments are bought, an official agreement is entered into by the seller and the buyer, binding both parties to the terms and conditions of the sale.

Thankfully, many contracts run through until the end of the term with no problems arising.

But disputes will, and do, occur. It's then that the contract is relied upon to provide specific evidence the arbitrator will need on which to base findings. Why then do we tend to skip so lightly over the real necessities when the time comes to sign agreements, even when much of our precious money is involved?

How often have you gone into an institution and merely signed all the pages of contracts without reading them, or even asking what the implications really are? We just sign them and say, if we can't trust our bank, then who can we trust?

In my industry, namely insurance and investments, I'm seeing the same dangerous habits manifesting. The consumer seems to feel that since we have earned their trust, they can take short cuts when signing proposals, quotations and other very important Fais-compliance documents.

Be aware. There is absolutely no purpose in you signing volumes of Compliance documentation (essentially, contracts) unless they add real value. If ever you have to file a complaint against your financial planner, unless the documents held on file contain clear wording that illustrates exactly what happened, your argument will be seriously compromised.

As Fais Ombud Charles Pillai wisely said, "Don't tell me, show me!"

Therefore, it's in your best interests to observe the following:

l The written proposal your financial planner prepares as his solution to your specific need or needs must include all the appropriate data or information you discussed, and on which you were able to base your well-informed decision regarding your important investment. Furthermore, his Record of Advice document must serve as an extension of his proposal with specific disclosures;

l Please sign the proposal he presents to you. In the absence of your signature, the argument becomes a case of "He said ... She said ..." with unnecessary complications for both parties;

l Similarly, when you discuss the various product or services he proposes as suitable solutions to your needs, unless you have signed the quote or quotes to signify your acceptance of a particular option, it's not going to be of any use as evidence that your representative did, or didn't do the job properly.

The answer to reducing the risks inherent in contracts is simple: you OWE it to yourself and your family to take enough time to thoroughly check your contracts before you sign.

l Bryan Hirsch is a director of Pioneer Financial Planning. Visit www.pioneerfinancialplanning.co.za