Knowing who to trust for financial advice can be tricky – salespeople often try to buy our trust so that they can sell us their products, but do not be fooled – 9 times out of 10, these people do not have your best financial interests at heart.
Within the world of financial services and insurance, there are independent financial advisors and tied-in financial advisors. The latter applies to a consultant who is contracted to only sell products for a particular financial services provider. You would find this type of financial advisor in an organisation such as Liberty or Old Mutual. These people would be able to compare products within the Liberty stable, for example, but would not be able to offer you anything outside of what Liberty offers.
If you want to shop around, using a tied-in financial advisor is obviously fairly limiting, unless you conduct the same process simultaneously with all the big companies, to establish for yourself which product is best suited to you. The issue of trust, however, is a key issue here. Knowing that these FA’s can only sell you a product from one financial services provider should automatically ring an alarm bell when it comes to trust. These salespeople have to convince you that their products are the best, otherwise they lose a sale.
Going with an independent financial advisor is a better option when it comes to trusting them with regards to financial advice. These people are at liberty to offer services and products from any number of financial services companies, and therefore can offer you a more “objective” view. They can also offer product comparison for you, without you having to get in touch with all the different companies. Bear in mind, however, that even though these are independent financial advisors, often they are incentivised to sell some products over others.
The key in trusting financial advice is threefold:
- Know what you are looking for, and do your own research into options and pricing before contacting anyon.
- Find an independent financial advisor you can trust – the best way is to get a word of mouth referral from a friend or colleague who has had a good experience with this person.
- Set up a face-to-face meeting, and get this person to explain the ins and outs of each product simply and clearly to you. Get him to outlay your options, and leave you with material you can read up on. You are then empowered to make the right decision, based on this person’s advice.
Getting trusted financial advice can be difficult, and there are numerous products that you may feel you need. Find a financial advisor you can trust, and ensure that you have a good retirement annuity, good medical aid, a solid investment plan in place for the future, and that your life insurance covers you sufficiently.