How to … find a financial planner

In the past, relatively unqualified people could set themselves up as financial advisers – and live off the high commissions many of their products delivered. But regulations have been tightened, and the industry now boasts a growing body of well-qualified professionals. This week, in our series on how to manage your money, we show you where to find one. Just as you would use a map for directions on how to get somewhere, you should have a financial plan to make sure that your financial affairs are in order and your financial needs can be met. However, a plan or map by itself is not nearly as handy as one that is implemented on an ongoing basis with the assistance of a guide, and your financial planner can be your guide. Financial planners come from varying backgrounds and operate in many different ways. It is critical, when choosing the right planner for your circumstances, to find out exactly who you are dealing with, whether they are qualified and licensed, where their field of expertise lies, and which institutions they are authorised to represent. You can use either an independent financial planner or a planner who is affiliated to a financial services company. A planner affiliated to a financial services company will be able to advise you only about products from that company whereas someone who operates independently is in a position to give you objective advice and can draw on investment and risk cover solutions from a range of financial institutions. Until some years ago there were no legislative requirements for financial planners, and many brokers or product-peddlers claimed to fulfil the services of financial planners – to the detriment of their clients. However, this scenario changed in 2002, with the implementation of the Financial Advisory and Intermediary Services (FAIS) Act, which introduced minimum qualifications and operational requirements as well as a code of conduct for financial planners. Anyone practising in this field has to, in terms of the FAIS Act, have a licence issued by the Financial Services Board to operate as a financial services provider (FSP). Sometimes, you will find that a company holds an FSP licence. The FSP will employ both representatives and “key individuals”, who must ensure that all the representatives are fully aware of the requirements of the FAIS Act.