You wouldn’t gamble with your health by not seeing a professional, why do it with your financial future? Consult an independent financial adviser to help you get the most out of your investments and to understand the tax implications of your decisions.
“You’ve gotta be in it to win it”, as the well-known saying goes. The same is true for investing. The choice, jargon and other complexities can be overwhelming, but you need to get started to enjoy the long-term benefits. The good news is you don’t need to do it on your own; improve your chances of investing successfully by making use of the services of a good, independent financial adviser.
Independent financial advisers are more than just product pickers. They are independent of any service provider and their role is to assist with long-term financial planning. They have the objectivity and experience to help you meet the full range of challenges you might face.
An adviser can help you to avoid common investing mistakes
Independent financial advisers (IFAs) play an important role in helping you make decisions that are right for your circumstances and, importantly, helping you to avoid the pitfalls of investing on your own, which include:
Investing without a plan
A well-crafted financial plan is a critical starting point for achieving financial freedom. If you don’t know where you’re going, how will you know when you get there? An IFA will help you to develop a workable plan to suit your personal financial goals and needs.
Investing in the wrong product
The choice of products available is mind-boggling. Different products have different tax structures and different objectives. An adviser can help you make the choices that suit your circumstances.
Time can erode the value of your money, leaving you able to buy less with the same amount of rands. This is called inflation. By putting your money in the right investment, an IFA can help you achieve returns that, at least, compensate you for the length of time that you invest so that the value of your money is maintained.
‘Blowing’ your retirement savings when changing jobs
It’s essential to preserve your retirement savings when you change jobs or if you are retrenched. If you don’t, you probably won’t be able to retire with enough money to live on. An IFA will encourage you to keep your savings intact.
Focusing only on one market or asset class
One of the keys to successful investing is diversification. In other words, don’t have all your investment eggs in one basket. An IFA will help you diversify, giving you exposure to various investment options.
Acting on your emotions
Investors are known to be bad at timing the market and basing investment decisions on emotions. In addition, they tend to switch between investments too often, destroying the value of their savings. An IFA will help you avoid this pitfall.
Good IFAs spend time understanding your needs and helping you put a plan in place that reflects your goals and your risk appetite. They help you to invest with discipline and understand how emotions can lead you astray in the investing process. An IFA’s role is to help you look at your finances rationally, and only act for the right reasons.
This article forms part of a series on maximising your tax benefits.