Find that special 'chemistry' with your adviser
Whether you're just starting out in your first job or about to retire, don't shy away from seeking financial advice.
That's the message to consumers grappling with their personal finances from Mark MacSymon, winner of the Financial Planning Institute's 2017 financial planner of the year competition.
MacSymon, 33, who is a certified financial planner - the internationally recognised standard for financial planning professionals - says that while the financial services industry can be intimidating, there is a critical need for qualified advice, and one of his goals during his tenure as FPI financial planner of the year is to raise awareness of the value of the CFP® mark.
It should be conventional wisdom that when people need financial advice they seek out a CFP® professional, he says.
He acknowledges the industry has an image problem - as evidenced by the latest Old Mutual Savings & Investment Monitor, which found that 40% of working urban people in South Africa said they would like financial advice but considered it hard to find someone trustworthy. But, he says, the risks associated with not getting good financial advice are also high.
So how does a consumer find a financial planner they can trust?
For a start, they must find a CFP®, he says. In order to receive the designation, a financial planner must meet "the four Es".
This means the person has the appropriate education, has passed the necessary exams, has the right experience and adheres to the highest ethics.
In addition, CFP® professionals are required to spend 35 hours a year on continuous professional development. At least five out of that 35 must be dedicated to professional ethics and financial planning practice standards.
"Clients must do their homework and should feel free to ask questions; you need to screen a potential planner to ascertain if he or she can add value over the long term," MacSymon says.
Asking a financial planner for references is worthwhile, he says.
"Some of the questions you could ask include: How long have you been in business? What are your ideal clients? What do they have in common? This will give you an indication of where the financial planner's expertise lies. For example, the planner or the practice may specialise in serving mostly retirees, professionals, or business owners. Knowing this will help you find the right fit. Businesses that get it right understand that they can't be all things to all people."
MacSymon, who works as a wealth manager at Private Client Holdings in Cape Town, specialises in servicing high-net-worth clients. "They are clients with complex needs in the areas of tax, estate planning and investment," he says.
He says Private Client Holdings, which is a practice that charges fees, works with clients who are serious about their financial plan and committed to achieving their financial goals. "Our clients find value in our business structure, which nurtures wealth and relationships over the long term.
"As much as we know our clients, our clients know and understand us; they know our business and appreciate our salt-of-the-earth approach."
Genuine relationships are forged over time and through regular contact - by way of impromptu phone calls and e-mails, meetings, and during client seminars, he says. But there must be some "chemistry" for the relationship to flourish.
MacSymon, who is an economist by profession, says he went into financial planning because of the opportunity that it affords him to meaningfully impact lives.
"I felt I could do a better job influencing people's lives by being at the coalface - versus coming up with policy."
He says an adviser can have a meaningful impact on your life if the adviser can help you set and define your goals, change your behaviour so you can achieve those goals, measure your performance towards achieving those goals and, ultimately, achieve those goals.
He believes the most important attributes of a financial planner are impartiality, transparency and a commitment to service excellence.
"To render a quality service, independence is crucial; if advice is influenced it's tainted," he says. Transparency is essential in a world in which clients are increasingly seeking to align themselves with businesses that share their values. "Transparency is also key when it comes to what we charge for our services," he says.
MacSymon loves the relationships he has with his clients. "It's quite intimate because the job relies on a huge amount of trust. And it's very rewarding when we have a material impact on lives. We're able to distil the numbers to help people make better decisions. If I can save someone from working another five years to spend more time with their family - if that's something they really value - that's hugely rewarding," he says.
The most challenging aspect of the job is accepting that not everything goes according to plan. "Life happens - there is loss and retrenchment - and it's stressful for clients, and we take on that stress. We do become emotionally invested in their lives and want what's best for them. It's especially difficult for clients when markets are volatile, and our job is to act as a shock absorber in that mentoring role."