– By Wessel Oosthuizen

Do I need a financial advisor at all?

Actually you might not really need one. If you need a life insurance or investment product and you have the required knowledge of these products then you don’t really need a financial advisor.

BUT it’s not that easy if you need proper financial planning.

A global study by the Financial Planning Standards Board (FPSB) found that most people feel challenged by their finances, with relatively few saying they are very knowledgeable about financial matters or highly successful at sticking to their financial goals.

Can you say yes to the following:

  • I know whether there will be a liquidity problem in my estate when I die.
  • I know the amount needed for my dependents to replace my income when I die.
  • I know the difference between temporary and permanent disability.
  • I know my risk profile.
  • I know how unit trusts, tax free investments, equities and bonds operate and the returns they deliver.
  • I know the tax implications of different investments and the impact on my
  • I know whether I have saved enough for retirement.

If your response is “no” to most of these statements, then it is a good idea to consider contacting a financial advisor.

How do I choose a financial advisor?

Establish whether he/she is trustworthy and will be able to add value. One of the biggest problems identified in a global study is knowing whom to trust. Among those surveyed, 68 percent rate “trustworthiness” as very important when choosing a financial professional – higher than any other consideration. Yet, two in three consumers (66 percent) agree either strongly or somewhat that they do not know who to trust when it comes to getting financial planning advice.

How to determine the knowledge of a financial advisor?

  • They must have the knowledge to add value, so for a start they must be able to respond “yes” to the above mentioned statements on your behalf.
  • Simple but very important aspects like helping their client’s with their debt situation and assisting them to become debt free. In the FPSB survey referred to above being debt-free is most important to consumers globally however it is ignored by most financial advisors.
  • It is also clear from research that receiving a financial plan adds great value. Canadian research showed that 81% of clients with a comprehensive financial plan feel that they are on track with their financial affairs and 62% reported that they have improved their ability to save in the last five years before their retirement.

Research shows that using a financial advisor from a reputable company, who has innate knowledge of financial planning, who uses a clear process, delivers a financial plan, is transparent about their fees and reviews your portfolio at least once a year will improve your finances.

Verso Wealth is an authorised Financial Services Provider with the FSP license no. 46260.

Call us on 021 943 5301 or email us at [email protected]

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This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)

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