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ISO 22222 is currently the only international certification of its kind available to advisers and we like to benchmark our service and our internal processes and the client experience that we offer against the international standard of best practice. There is a huge difference between ISO 22222 and qualifications. Attaining a qualification requires you to study, go into the exam room and that’s that.
ISO 22222 takes the process one step further; it is all about applying that technical aspect to your work on a daily basis and delivering the best possible service to clients. We are thus proud to be the only two South African advisors to have been awarded this International Standard of best practice.
To be a trusted financial soundboard, it’s important that an adviser understand the client’s decision-making paradigms and emotional connection to finances.
Advisors obsessively follow the markets and enjoy making financial projections that ensure their clients make the best decisions for their futures. According to Vanguard Group, the world’s largest unit trust provider with over US$5.1 trillion in assets, having an effective adviser can bolster your portfolio’s growth up to 3.0% p.a.
Advisers also assist with effective strategies to preserve your wealth in life events such as death, disability, incapacity, retrenchment, or sickness.
The CERTIFIED FINANCIAL PLANNER® designation or CFP® designation is internationally recognised as the standard for financial planning professionals. The status gives consumers confidence that the financial planner they’re dealing with is suitably qualified to provide advice at a fiduciary level.
In order to receive the respected CFP® designation, an applicant must meet the four E’s of the profession of financial planning: Education, Examination, Experience & Ethics.
In addition, CFP® professionals are required to maintain technical competence and fulfil ethical obligations by renewing their membership annually. To stay in touch with the happenings in the financial planning profession, every year they must complete 35 hours of Continuous Professional Development (CPD). These strict requirements ensure that any individual who holds the CFP® designation is well prepared and highly qualified to provide consumers with sound, professional advice.
A will is a document which determines the distribution of your estate. Everyone over the age of 16 may draft a will and it is important to keep your will up to date, particularly following a life stage change. These life stage event include occasions such as a change in marital status, the birth or death of an heir such as the birth of a child or grandchild. Additionally, this can be an increase or decrease in your asset base such as the purchase of a new home, or changing jobs, or reaching retirement age.
An independent advisor is not directly affiliated with any insurance company, investment firm or product house, nor are they incentivised in any way to recommend any specific products or investment.
A tied advisor is directly affiliated with a specific company or product house and will be incentivised by recommending their products only. Your advisor must disclose whether they are independent or tied, and it is normally disclosed in their introductory letter. The benefit of an independent advisor is that they may recommend a broad range of products and offer various options for you to choose from. It demonstrates that they are independently working for you and that their advice will not be affected by any industry associations.
In the South African market, the most common structures include a fee-based model and a commission-based model.
Commission-based advisors are remunerated by the company with which the product was placed, and this is normally done as an upfront payment.
The problem with having a pure commission-based structure, is that it may lead to the adviser being faced between providing the most appropriate advice and generating commission from a product sale.
Fee-based advisors are remunerated by charging a fee for the advice and services they render. The structure of this fee may vary depending on the type of planning done.
An upfront fee is normally charged for a formal plan and thereafter the adviser can charge a % of the assets they manage; with the emphasis being on comprehensive wealth management.
The benefit of this model is that the adviser is incentivised to grow the client’s investment assets over the long-term.
Everyone should have a will, irrespective of your asset value, as it allows you to leave a legacy in line with your wishes. You work a lifetime to build up an asset base which carries specific meaning and sentiment. A will allows you to determine who will benefit from it and in what proportion. It avoids your asset base being passed down in terms of the Law of Intestate Succession (dying without a will in place) and allows your investments to be placed with an investment house for minor beneficiaries to maximise capital growth, rather than monies being placed in the Gaurdian’s Fund.
Having a will in place reduces the timeframe attached to the estate administration process and makes it easier.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.
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