WHO’S WRONG? THE PUBLIC OR THE FINANCIAL ADVISORS? In a world of conformity and uniformity, Financial Advisors are usually easy to pick out. You can see them at the coffee shops neatly dressed, with their folders and paperwork, chatting earnestly with their prospects and clients. You know their introductory pitches over the phone almost down pat. They are almost always cookie-cutter action figures that do the same thing, in the same way, with the same products. Financial Advisors, Broker, Financial Planners, and other creative names are adopted by those members of the Financial Services industry that give advice on personal and business investment and insurance needs, and then broker the implementation and management of these products. It’s a way of subterfuge so that the person on the phone doesn’t instantly guess that they are hoping to talk about insurances, investments or employee benefits. Ironically, the services that these men and women provide are of paramount importance, which begs the question, “Why do they actually need to try to ‘trick’ one into taking their call or accepting a meeting invitation?”. If you look at the global marketplace, there are some countries that are a lot more switched on towards personal financial planning than other countries. It’s the ‘switched-on’ countries that have very high levels of people able to retire. Those countries have been ‘trained’ to understand the value of the financial planner and the important products and services that they provide. So where does the South African public sit on this global scale? If you consider that South Africans are a few TRILLION Rand under-insured, and that only 6% of South Africans will be able to retire at 65, you’ll understand just how poor the general public’s attitude towards the services and products offered by financial services ‘consultants’. But where does this poor attitude towards advisors stem from? Perhaps its because insurance and investment products are paid for from disposable income, which for a large portion of South Africans, is rarer that rocking-horse poop. Perhaps it’s a result of a pre-FICA financial services industry that was a wild-West free-for-all that resulted in a lot of rich advisors and a lot of unhappy people with trust issues. No matter what the reasons are, there has to be a mindset change. Thanks to the Financial Advisor and Intermediary Act of 2002 (FAIS), the Retail Distribution Review (RDR), the TCF (Treating Customers Fairly) guidelines, and a few other rules, regulations and requirements, the financial services world has done a lot to come to the party. Sadly, there is still a long way to go for a large portion of the services front line, but at least with increasing compliance requirements, checks & balances being implemented, the overall quality of the advice and guidance being given is improving. The attitude of the public now needs to catch up. If we teach our children the power of professional financial advice from when they hit their teens, they will understand the time-value of money and won’t have to find thousands of Rand for their investment or insurance premiums because they would have started early. That’s a gift that is priceless. Leave a Reply Cancel ReplyYou must be logged in to post a comment.