LETTER: Independent financial advisers are well informed
The public is not well equipped to fully comprehend all the facts needed when appointing a financial adviser
I read Stephen Cranston’s column on discretionary fund managers (DFMs) with a great deal of interest, and can confirm there are many points of important relevance that need more debate, discussion, education and exposure (“There are many benefits to using discretionary fund managers”, March 25).
The public is not well equipped to fully comprehend all the facets, facts and in-depth “due diligence” needed when appointing a financial adviser, and especially differentiating between product service providers (PSAs) and independent financial advisers (IFAs). The latter group may or may not elect to use a DFM.
The IFA community is more than 4,000 in SA and each is central to the investment advice and guidance processes their clients and families are exposed to, hopefully as independently as possible.
As part of our public education programme the SA Independent Financial Advisors Association (SAIFAA) has launched a set of 21 questions that need to be asked when appointing a financial adviser, whether a PSA or an IFA. These questions constitute, in effect, a “due diligence” of the person to whom they will be entrusting their money.
A number of these questions focus on where one’s money is invested, including DFMs, and attempts to interrogate important aspects such as costs and risks. They can be accessed on the SAIFAA website.
With regard to Cranston’s final paragraph — “It makes sense for independent financial advisers, who are beer-swilling extroverts and not necessarily that bright, to pass on the fiddly business of running portfolios to a third party” — I would humbly point out that from my 55 years of experience many prefer other forms of “imbibement”, and most with whom I engage are bright and exceptionally well informed, professional and knowledgeable — definitely not dim!
CEO & founder, SAIFAA
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