What A Financial Planner Can Do For You
Fairlady|June 2017

We ask Certified Financial Planner Bruce Fleming why we need help with our finances – and he takes three readers through the planning process.

Anna Rich

Q: Is it really necessary to see a financial planner?

A: If you have a minor health issue like a headache, you go to the chemist who gives you a pill. But if you break your leg or have a sudden searing pain in your chest, you don’t go to the chemist – you go to your doctor.

Similarly, if you’re planning a holiday next year, you’ll just put money away in a savings account. But when it comes to something that’s going to make a critical impact on your life, like whether you’ll be financially secure in retirement, then you need to see a ‘doctor’ – a Certified Financial Planner®. The certification is peace of mind for you: it means the planner has committed to the Financial Planning Institute (FPI) of Southern Africa’s ethical and professional standards, and meets their standards of skill, competence and experience.

Q: Isn’t the advice pretty standard: don’t spend more than you earn; save for your retirement?

A: Many people think: ‘I know what my expenses are, I should be okay to look after my own retirement.’ But do you understand the tax and liquidity implications of what you’re doing? When you retire, do you understand what you should do with your retirement fund?

There’s no one-size-fits-all. For instance, if you’re not contributing to a retirement fund, I’ll point out the nice tax deductions, and explain how retirement contributions make up for poor financial discipline – you can’t touch the fund until you retire. Even then, you can’t access two-thirds of it as that’s what provides you with an income. Someone else might be hitting 50 and their retirement fund might not be growing sufficiently. That discussion would be about the underlying investments; they may need to be more aggressive to increase growth.

It was clear none of the readers I’d met had a financial plan. What’s great about this process is that they now have financial goals and guidelines.

Q: How do you find the right person to help you?

A: People don’t easily talk about money. So you have to trust your financial planner, and trust must be earned.

Many people mistrust the financial services industry, believing it just sells them products. For the past 40 years, many representatives have been doing exactly that, not putting clients’ interests first. But things are changing. Treating Customers Fairly, which is the approach the financial services industry should have been following anyway, is being legislated.

Ask a friend for a referral, or contact the FPI to find a Certified Financial Planner near you: www.letsplan.co.za, 086 1000 FPI (374) or fpi@fpi.co.za.

‘I retire in 13 years’ time – will I be comfortable?’

JANE* is 52, single and has two adult daughters. She works as a lecturer and her 85-year-old mother lives with her.

MY FINANCIAL GOALS AND CHALLENGES

1 I’d like a comfortable retirement.

To be able to afford a reliable car every five years.

A holiday every second year.

My mom and I are looking for the best way to transfer our family assets to my daughters.

BRUCE’S WARNING SIGNS

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