The profession of financial planning is relatively new. The average pensioner will tell you that in their youth financial planning was not even a recognisable term. During and after the First World War the depression made it virtually impossible for most people to make ends meet, let alone have surplus money to invest. Access to financial advisers was the domain of the super rich.

As the world settled down to growth and prosperity and insurance and investing became viable for the working class, sales people were sent out in large numbers to sell products to anyone who could afford them. Promises of great wealth were made with little to substantiate the claims. Projections were presented based on optimistic scenarios and when the products failed to deliver on these promises, policyholders became disillusioned and insurance sales people got a bad reputation.

Up until as recently as five years ago, the financial planning industry was seriously under-regulated and an adviser was not really recognised as a professional, but rather a seller of products.

If a doctor, lawyer or accountant acted unethically they each had an association or board that they had to answer to, but financial planners were able to walk away from their mistakes without any concern about repercussions. This lack of accountability created a lack of trust in the public and much criticism from the media.

Compliance to minimum standards

Today the situation is entirely different. Financial advisers are required to go through a rigorous set of examinations and have to be accredited with the Financial Services Board. This process has separated the wheat from the chaff and compliance to minimum standards has improved the professionalism of advisers.

This is good news for investors because trying to navigate the world of financial planning on your own is a difficult if not impossible task.

Anyone who earns a decent income can benefit from the services of a professional adviser.

The key to a successful relationship with your adviser is team work. They can guide you in terms of choosing the correct products for your objectives, but if you are not totally committed to a long term plan no product in the world will perform the way it was designed if it is cancelled or not adhered to. The only way to guarantee true financial freedom is to become a partner with your adviser by educating yourself to the point where you can understand his or her recommendations, explain your needs in detail and be upfront about your situation.

So how do you choose an adviser?

There are many ways to find an adviser.

You can log onto the Financial Services Board Website (www.fsb.co.za) to find a list of advisers and you can also look at the Financial Planning Institute's website for lists. Both will have a list of certified financial advisers in your area.

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