Picture: 123RF/DMITRIY SHIRONOSOV
Picture: 123RF/DMITRIY SHIRONOSOV

Q: What can a financial adviser actually do for me? — Anon via e-mail

A: David Kop, executive director: relevance at the Financial Planning Institute says:

A financial adviser’s role is to assist you determine your goals and draft a road map to get you to them. A financial adviser can assist in:

Financial management. This includes setting up a budget and managing your debt. If you are overindebted you may be referred to a debt counsellor.

Insurance. Some advisers are licensed to advise you on both personal cover and insurance for your assets. However, often you will be referred to a broker who specialises in insurance for your home and car.

Health care. Your adviser may analyse what you need to fund your health-care expenses and provide a solution or may refer you to a specialist medical scheme adviser.

Pension and retirement. Your financial adviser must determine what you need to do to retire with the income that you need in retirement. The adviser will recommend retirement products like a retirement annuity or nonretirement investments like unit trusts and offshore investments.

Investments and investment risk. Your adviser will help you determine your investment objectives and how much risk you can afford to take and recommend a suitable investment portfolio.

Taxation. Your adviser will guide you on how to legally structure your affairs to take advantage of tax deductions or to invest in tax-favourable investments. In most instances your adviser will work with a tax practitioner to file your tax returns or, if you have complex tax issues, with a specialist tax practitioner. 

Estate distribution. Estate planning ensures that when you die, your family will still have an income, your estate is finalised with the least hassle and the least estate duty is payable. Advisers normally work with trust companies or attorneys to assist with drafting a will.