Election season is upon us, and South Africans will soon be heading to the polls to decide who gets their vote. Between campaign posters and passionate debates around the braai, there’s plenty to think about before ticking that box.
But there’s another decision that needs just as much consideration, even if it doesn’t come with a ballot paper: who do you trust to help you manage your money?
While your financial adviser may not be responsible for the fixing of potholes, they are someone who could help you make decisions about your children’s education, your retirement or what happens to your family if you can no longer provide for them, so it’s important to know whether you can trust their judgement. Before you make your mark, here are five things worth considering.
1. Know what they stand for
Every candidate has a manifesto, and your financial adviser should likewise have an approach to money that you understand and feel comfortable with. Some advisers focus on long-term wealth creation, while others specialise in helping families protect what they have. Ask how they approach financial planning and what they consider most important when recommending products.
Do they look at your finances as a whole, or does every conversation seem to end with something new to buy? A good adviser should also be able to explain their recommendations in plain language. If you’re leaving meetings more confused than when you arrived, something isn’t working.
2. Don’t fall for campaign promises
We’ve all heard promises that sound wonderful on paper. When it comes to your money, though, anything that sounds too good to be true calls for a closer look. Be wary of anyone promising guaranteed high investment returns or suggesting there’s a way to make a quick buck without taking any risk. Investments can go up and down, and an adviser worth trusting will be upfront about that.
When markets become volatile, an experienced financial adviser will usually advise you against making reactive financial decisions driven by emotion, because – as we saw with the COVID-19 pandemic – they tend to level out over time. They should also transparently explain any fees you’re paying and why a particular recommendation suits your unique circumstances. A realistic plan beats an impressive sales pitch every time.
3. Make sure they understand your constituency
A 28-year-old saving for a first home has very different priorities from someone supporting elderly parents while trying to put children through university. That’s why a good adviser will spend more time asking questions than pushing products. They need to know how far your money has to stretch every month.
Are you lying awake at night counting coins, or are you ready to take the leap with your own business? Your answers should guide their recommendations because your financial plan should fit your life, not their product quota.
4. Check their track record
You probably wouldn’t hire someone to fix your roof without checking their references and experience. Choosing a financial adviser deserves the same care. In South Africa, you can check whether an adviser and the business they represent are appropriately authorised through the Financial Sector Conduct Authority.
And don’t be shy to ask about fees – your adviser is legally required to disclose what you’ll pay for their services, including any commissions they may receive.
5. Hold them accountable after election day
You’ve cast your vote – now the real work starts. A financial plan shouldn’t be something you sign once and forget about. Your life will change, and your finances need to keep up. A new baby might mean reviewing your life cover, or a promotion could give you room to save more towards retirement.
You and your adviser should agree on how often you’ll review your plan and what communication you can expect between meetings. You should always feel comfortable asking questions or requesting an explanation when something doesn’t make sense.
Ultimately, choosing a financial adviser isn’t about finding someone with the most impressive promises. It’s about finding someone who understands your needs and can help you make better financial decisions as your life changes. And unlike an election, you don’t have to wait five years to reconsider your choice.
If your adviser is no longer serving your needs, you can place your cross next to someone else – because the right advice can make all the difference.
