Get more Mail & Guardian
Subscribe or Login

Financial media vs the financial adviser

A recent survey by financial services company Acsis looked into the financial security of middle-income South Africans.

They were specifically interested in how secure people felt around their retirement. The survey focused on households earning R30 000 or more a month, the assumption being that at this income level one can afford to save.

The figures were not surprising; more than half of the people interviewed felt that they had not done enough in terms of retirement provision. We know from behavioural finance that people tend to overestimate their retirement provision, so this figure is probably even higher in reality.

An interesting analysis was done around the top three sources people used when making an investment decision, 52% used a financial adviser, 30% used the internet, 26% spoke to friends, family and work colleagues and 25% made decisions based on information in financial newspaper and magazines.

The survey also showed that people who used a financial planner tended to have saved more and had some form of financial plan in place. People who followed DIY strategies tended not to have their finances organised.

So where does the financial media fall into this and what role should it play? I believe the role of a financial article is to inform. If people have information they are able to make better decisions.

A financial article does not tell people on an individual level what to do with their money, and this is a very important point.

For example the media is full of articles on offshore investing at the moment. It may be a good time theoretically to invest offshore, but if you require income from your investments or already have offshore exposure then it would be a bad idea for you.

Exchange traded funds may offer a slightly cheaper alternative, but they cannot provide asset allocation.

An older type retirement annuity may be more expensive than a new age one, but it may have better benefits for your needs or there may be significant costs in cashing it in.

As much as I write about topics and answer questions, these are very generic information exercises. They provide ideas and information to allow you to ask the right questions, but it can never take your entire financial situation into account. This is where the role of the financial adviser comes in.

Even if you can invest your money yourself, have you ever sat down and written a proper financial plan? Do you know how much money you need to meet your goals? Do you understand what risk you need to take to meet those goals? There are few people who have achieved this without an adviser, not necessarily because they dont know enough about investing, but because they lack the discipline. They need someone to make them sit down and face their financial future.

Despite having worked in the financial industry and writing on finance every week for various publications, I will be meeting with my financial adviser next week to check my financial plan and make sure I am moving in the right direction. I see my adviser as a financial coach. Ultimately I make my own financial decisions, but without the discipline from the coach those investments may never happen and that would be the biggest financial disaster of all.

In conclusion, good financial advice is worth paying for, the problem is that there are too many product pushers where people are paying for advice they are not getting.

So if you are going to pay for advice, make sure it is good advice. Read the papers and compare products on the internet so you are asking the right questions, but probably leave your family and friends out of the information equation — those conversations usually lead to the worst financial decisions.

Read more news, blogs, tips and Q&As in our Smart Money section. Post questions on the site for independent and researched information

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Maya Fisher French
Guest Author

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

DA’s egregious sexual harassment case finally begins

The party is accused of protecting a councillor, who’s also implicated in R1.2m graft

The ANC, DA and EFF ‘oblivious’ to climate crisis —...

The Climate Justice Charter Movement has critiqued the manifestos of the main parties contesting the local government elections and found them ‘shallow’

More top stories

It’s safe to open the beaches, says UPL after chemical...

Agrochemical producer UPL said it has paid R250-million in chemical spill clean-up

Former spy boss Fraser objects to Zondo’s nomination as chief...

The former director general of intelligence’s character assassination of the deputy chief justice is straight out of the Zuma playbook

Special Investigating Unit to oppose efforts to reject Mkhize report

Former health minister Zweli Mkhize seeks relief to declare the SIU’s conduct against him ‘unlawful and unconstitutional

Bird flu outbreak on Dyer Island causing mass deaths

The island hosts the vulnerable African penguins, endangered bank cormorant and roseate tern
Advertising

press releases

Loading latest Press Releases…
×