Death, Taxes and Financial Advice

Unavoidable, all of them are unavoidable! My client was sitting across the table, sipping a coffee and listening intently. We were talking about opportunities in the property market for people with ready cash at the moment. He is a wealthy man and clued up when it comes to financial matters.

Why then is he at my office, paying me an annual fee to manage a Preservation Fund for him? He is relatively young and there is not much we can or should do to his current investments so one could argue that we are not adding any value!

Now the short answer is that a trusted financial advisor is like a toilet, you can go without one for quite a while but when you need one, you really need one!! The most important word in the previous sentence is "TRUSTED". Trust can only be established over time by proving that your best interests are taken into consideration and that advice received over an extended period of time proved to be to your advantage.

There are too many people that will sell you something either for their own benefit or because they believe that it is a good product but have no solid evidence that it is.

When it comes to financial matters everybody have advice to give, your parents, your brothers and sisters, your friends, your priest, husband, wife, grocer and off course your "advisor". Unfortunately it only takes one misguided or bad piece of advice to destroy years or even a lifetime's worth of savings

Here are a couple of things to remember:

• Always get a second and third opinion.
• Establish a relationship with a licensed financial advisor early on in your life.
• Test their advice with small investments over time.
• Do not make big investment decisions on your own. Emotions are the prime destroyers of wealth.
• Never get into a position where you have to make a huge decision without someone you have trusted for years.
• Get involved with your investments and even if you have very little invested, use the opportunities offered to you to discuss it with your advisor.

So perhaps now it makes sense that my client is prepared to pay me to manage his portfolio. He has been with us for over 6 years, his investments have performed well, he can always phone and ask my opinion, he does not have to make emotional decisions and he knows that in 10 years when he retires, trusting our advice will not be an issue.