NMG Benefits’ Post

Transcript

It's the university's head of financial planning at financial advisory firm NMG Benefits, and he says that having an honest conversation with your financial advisor isn't just a right, it's a responsibility. Stan, good evening, welcome to U FM. Good evening, Pat. You're the man that's going to help us. We're wrapping up, you know, Financial Literacy Month and the 10 critical questions that one should be asking their financial advisor. Where, where do we start? But I think the thing that's very, very important is, you know, we, we always joke about it and say, if you sit in front of a doctor and here you got 50% and his final marks as qualifying for a doctor, you have a 50% chance that he'll give you a proper diagnosis. So and, and this and, and the, the same with our finances, I think that's important is to go and say, if you have talk to a financial advisor and you have a financial advisor, there's certain questions you're allowed to ask. Because you're dealing with your financial future. Yeah. And we know the importance. They say money isn't everything, but it's very close to to oxygen. So it's important that we make sure that we get the right team around us to help us. Yeah. So what, you know, where do I start? And and I get that some, some of us, we get intimidated because we're looking for advice and we end up just receiving information and not asking. But what are the critical questions, that one. Mask. So I think the first question to start with is with the question of what is your definition of financial fixed phase and what's important to you? And that that individual that helps you must guide you not just self impose their opinions of what they think they want to do, but actually have a conversation or heart to heart conversation. And we say people do business with people they know, like and trust. And you need to trust that individual implicitly because it's helping you into your financial future, into your retirement planning. So that's step one. Then Step 2, which I think is very, very important is making sure that individual talk to not just about products, but about your budget, your circle. So personal circumstances looking, looking holistically and even helping you get out of date. Now you should go into savings products and stuff like that, but you spend 24% interest on on paying off credit card loans doesn't make sense. And, and, and you know, then there's the issue of, you know, what happens when I'm no longer on this earth. Is that a fair question to be asking my financial advice? I think it is absolutely your will is probably the most important document you will ever sign in your life, even more important than a marriage contract because that that contract that will actually helps you make life easy for those of you that are left behind for your family and your friends. And we know. The recent stats off five out of six people at the motion of the High Court in Pretoria that estates were registered, wells weren't executable. Umm, so life is very difficult for your beneficiaries if you do not have a proper wall that reads to your estate plan and your wishes. Not just the document signer, but actually a well thought through document. We're in conversation with Steven Divertis. They heard of financial planning at financial advisory firm NMG Benefits and he's helping us through, you know, questions to ask our financial advisor. Do not be intimidated. It's not a one way discussion. You should be able to ask questions. Stan has helped us with three questions. Let's get to #4 Stan. 4th question is what fees are my paying on my investments and if the more the lower your fees on your investments are going to retirement, the more money you put in your pocket. To give you occasion, if you talk about an investment with a what we call a EACA 4% versus a 2% which is a 2% growth on your portfolio more than you can have, that can equate to 70% more money in retirement. That's a lot of money. That's a lot. It means in instead of getting 20,000 month in retirement, you can get 30,009 a month in retirement only if you ask. Only if you ask, but also you can scrutinize and say because they are all generation products that that advisors should not look at at at advising their clients too and new generation products. The the fees came down because of the competitive nature of the environment we're in. #5. #5 is if you look at life insurance, it's very difficult or very unwise to be penny wise # foolish. Yes, premiums are different and you need to go and say, my life insurance is it for the long term or the short term. There's different premium patterns. And if you go only for the cheapest now you might shoot yourself in the foot. But again, that comes back to point #1 looking at a realistic plan and when you need insurance and for how long you need life insurance. You know this discussion on life insurance. And one that I regret. I should have taken one when I was a lot younger. Yeah, it's one of those advices that you know, we need to talk a lot about #6. Number six. Is your financial planner independent or tied to specific insurance company? And also looking at the level of expertise easier certified financial planner or just what I call a broker and a broker. When you walk away from a broker, your broker because you don't have a financial plan, you also want to sell your products. It's ideal to work with independent people because independent financial advisors and actually look at giving you what's best in the market, not just pushing down a specific product for a specific insurance or investment house. We're doing well in terms of, you know, being brave enough to ask questions. What's the next, the next ones. Next question is how will you as advisor be remunerated is on Commission, Is it on a fee that you charge or is it a combination of of both? And I think that's one of the questions that's very important and by by law and advisors should disclose this. This is one of the prerequisites and unfortunately people are sometimes to, to to scared to talk and ask how are you remunerated? Yeah, yeah, yeah. We get intimidated. But that that's important because it affects my investment. It also affects my premium. Am I correct? Yep. Absolutely. Absolutely. And sometimes we have to ask ourselves what's more important? Do I want to have someone sell me a product? And I think the whole time, OK, my back of my mind, am I doing, is he doing this for his pocket? For my pocket, which sometimes is better to say to a guy, listen, do you charge me a fee? Yes, I can afford it. OK. But now I know. I know you giving you the best advice, not for your pocket, but for my, for my circumstances. Take us through the remaining three, Stan. OK #8 this is specifically for people that are in a business or which are dealing with a more of a network where you have a maybe a banker, you might have an accountant, where I think it's really important that you work with your whole team and you have a holistic view of dealing with your finances. We have other professionals because what happens is they keep one another accountable and then they keep your best interest at heart. And then we get to 99, number 9 is how often will you look at your portfolio? Will you review My Portfolio because. People spend more time planning a holiday and a birthday party than planning their finances. And you cannot just go and say, I'm going to take one hour a year and review my investments. You can't, it's just not viable. You have to spend say, what's my, my strategy now? Often I'm going to review this portfolio. And then the last one, which is very, very topical at this stage about two point. And that question is? And they advise you on should I withdraw money from 2 pot or not? And yeah, I think it's very important and I wanna go back to number one on budgets. Sure. Where you say do I have an emergency fund? Do I have a cash buffer? Because if I have cash, remember two-part is only there for people that cannot plan or is in a dire Strait situation where they do not have an emergency fund. So ideally you do not want to use that, but the advisor can help you get out of that position because two-part. These taxing you more than the tax that you pay to source or the deduction you get on your pension fund. OHH, that's going to get a lot of people scratching their heads. And we're, we're grateful that you were able to raise that point. I got a feeling we're going to chat to you again. Steve and David, head of financial planning at financial advisory firm NMG benefits. You can look them up, you know, and maybe get advice. And we appreciate your, your, your time and thanks a lot. Have a good evening, Sir. This evening.