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Ready to take the next step and choose a financial advisor? Amazing! But before you jump, know that there’s more than one role player here – and each of them offers something slightly different.
So, which one is best for you? Cherise Enslin of NLD Independent Financial Advisors breaks down exactly what you need to know about wealth managers, financial planners/advisors and lifestyle financial planners so you can make an informed decision.
A wealth manager
Similar to a financial advisor, a wealth manager’s primary aim is managing your money. So, they’ll invest your cash in unit trusts and then focus on its growth. They often work with high net worth clients. Their niche: investments.
A financial planner or financial advisor
A financial planner/advisor does the calculations on how much insurance cover you require and how much money you need to save for your goals. Once they’ve figured out your needs, they provide you with a solution via different products. Think: retirement funds, emergency funds, education savings, long-term insurance, etc.
There are two types of financial planners/advisors: tied and untied. A tied advisor works for a company – like Sanlam or Old Mutual – and they play the role of an advisor, but they can only use their company’s products. Untied or independent financial planners/advisors have access to all the products from any product providers they have an agreement with. These professionals can also assist with things like estate planning and tax planning in general.
A lifestyle financial planner
A lifestyle financial planner does everything that a financial planner does – but there’s one key difference. Before doing the calculations of what cover and investment products you need, they help you to articulate what your desired lifestyle looks like.
From this, they establish where you are in life right now, and help you to form a bridge to go from where you are to where you want to be. In other words, they look at what you want to do and achieve in life, attach monetary terms to it, then help you to get you there. This includes things like restructuring your budget, investing, reducing risks through insurance and educating you about financial planning so you can make informed decisions about your lifestyle.
You can use any of the above role players, and your choice should really depend on how involved you want the professional to be.