What A Financial Planner Can Do For You

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.