I become a mom in the first year that I started working, shortly after completing my degree – during that time, I had lots of decisions to make and the ones that weighed most heavily on me were the financial ones. I did some research and found out that I needed a retirement plan, an educational policy and life cover. I pretty much stuck to these and although I was making good basic decisions, doing it without the proper advice and support of a Financial Adviser (FA) meant that I hadn’t necessarily made accurate and customised estimations to support those decisions. I finally got one in 2014 and it came with great relief to know that my son’s future needs would be taken care of.
Then I relaxed a little bit too much.
Until I met Palesa, a FA from Liberty, who spoke at a recent event that I hosted for moms. She chatted to us about the importance of financial planning and re-evaluating our plans, as our circumstances change. The emphasis on re-evaluation/re-assessment was key for me, because the truth is that I treated my relationship with my Financial Adviser as a once-off event, instead of a long-term journey, that evolves as my circumstances evolve.
I realised that although I did have my own FA from Liberty, I hadn’t leveraged the relationship to my advantage. He made plenty of effort to reach out to me and send me useful articles every other month, but I never took his questions and follow-up’s seriously and I also hadn’t made the time to honour our appointments to update him on the (BIG) changes that had taken place in my life.
When we eventually met a few weeks ago, we had lots to talk about, but the main focus was on the following themes:
Having had another child, I had to take my daughters educational expenses into account. So a big part of our discussion was around making more accurate projections for (both) the children’s education.
There was a lot to discuss here, because I’ve had big changes this year – from getting married, to starting a new job and building a house. Naturally, this came with lots of eye-opening questions and important updates, such as changing beneficiaries (when I was a single mom of one, this was more obvious). The conversation was not about increasing premiums and doing more, but about coaching and guiding me about my options and the things I may have wanted to consider.
Here, we did a comparison between my retirement benefit at work and that which I had taken up privately. It can be easy to make the mistake of getting the same cover from two different institutions and two premiums, so it’s important to look into this carefully.
To be honest, I walked away from our first conversation feeling overwhelmed; but, I was consoled by the fact that I was finally taking action and control over my finances again. Through this process, I was also surprised to learn that less women than men between the ages of 35-44 years old have Financial Advisers. This really needs to change! Research tells us that at least 70% of consumers with a Financial Adviser are more confident about their current financial situation. This made me look into questions that may be useful to you when you meet with your Financial Advisor for the first time – no more excuses.
Smart questions to ask your Financial Adviser
When it comes to interviewing or deciding on a financial planner, there are some questions that outweigh the rest. These include the following:
- What are their certifications or credentials?
This question is to ascertain if he or she is a registered Certified Financial Planner or even better whether they are a fiduciary, which means they have your best interests at heart when it comes to making investment and risk recommendations.
- How do you charge for your services?
This question is broader and better then saying how do I pay you? It’s important to understand all areas of your financial planner’s compensation, if you don’t ask there maybe potential hidden fees.
- May I see a copy of a sample financial plan?
All financial plans should differ and be tailored to an individual’s needs. What you are trying to see here is how brief or in-depth the analysis is that your Financial Adviser will conduct.
- What type of clients do you specialise in and what makes your client experience unique?
With this question you are asking “why do I want to work with you?” Here the planner should give you a mandate or his customer value proposition. Personally, I found comfort in working with someone that had a good track record, as well as, the experience of putting children through high school and university.
- What are your measurements for success?
This is a key question because a strong planner will measure success based on how well your plan is progressing against the goals you have laid out and he/she has set up. He will also measure against your age, risk, inflation, benchmarks selected based on your time horizon.
- How much contact do you have with clients and will I be working with just you or a team?
Again based on their response you can gauge the level of attention, contact you can have with the adviser, and how often you will review your plan together. Remember at the very beginning you need to establish a relationship together hence you may meet more frequently until trust is established.
- What happens in the event I become incapacitated?
Even if you can manage your own finances, there will come a time when you aren’t around, either through passing or becoming unable to. A good financial planner will help you with proper estate planning and ways to protect your assets.
- Lastly in terms of your succession plan, if something had to happen to you what plans do you have in place to assure my needs are met?
Here we are talking about business continuity; to ensure that your financial goals/plans continue uninterrupted should anything happen to your financial adviser.
Now, go forth and conquer Mama! I love writing about my experiences, so that moms like you can learn from some of the mistakes that I have made. We lead very busy lifestyles, but financial planning isn’t one of those things you should leave to chance – it’ will always be one of those areas that we need to drive proactively.
To get you started and motivated for your journey, I’m giving away one Woolworths voucher worth R1000 to one lucky reader. To enter, simply leave me a comment letting me know if you have a Financial Adviser or not and why?
This giveaway will close on 12 October 2018. Full giveaway Terms and Conditions are available here.
This post was powered by Liberty, but as usual, all opinions and experiences are my own.
Modern Zulu Mom