Your financial advisor should ideally be someone you can partner with for life – a trusted professional who provides independent advice aligned with your best interests. When selecting a financial advisor, qualifications and experience are important, but there are other crucial factors to consider. If you’re meeting with a prospective advisor, here are some key questions to ask.
Are you properly licensed to give advice?
All financial institutions in South Africa are regulated by the Financial Sector Conduct Authority (FSCA), which oversees institutions that offer financial advice and products – including banks, insurers, and investment providers. It’s essential to ensure that your advisor’s practice is licensed as a Financial Services Provider (FSP). Their FSP number (formatted as FSP XXXXX) must appear on their website, brochures, letterheads, and other official material. This licence confirms that the business meets the FSCA’s standards in terms of qualifications, ethics, operational ability, and industry experience. To confirm an advisor’s licence, you can search the FSCA website or contact the authority directly on 0800 20 3722.
What qualifications set you apart?
Ask whether the advisor holds the Certified Financial Planner® (CFP®) designation – the internationally recognised standard for financial planning professionals. This designation indicates that the advisor has met rigorous education and experience requirements, passed a board exam, and adheres to a strict code of ethics. To qualify, the advisor must hold both undergraduate and postgraduate qualifications in financial planning, have a minimum of three years’ work experience, and have passed the CFP® competency exam. Inquire about other relevant qualifications, too. Many advisors have backgrounds in commerce, law, or accounting – all of which are valuable when advising on complex financial matters.
How much experience do you have?
Experience counts, especially in a field as complex and highly regulated as financial planning. Ask how long your advisor has been practising and what specific experience they bring to the table. Ensure their expertise aligns with your needs – for instance, if their background is solely in insurance, they may not be best placed to advise on estate or retirement planning. Ideally, you should work with a practice that offers a comprehensive suite of financial services, enabling your portfolio to be managed holistically by a team of experts.
Are you affiliated with any professional bodies?
If your advisor is a CFP® professional, they must be a member of the Financial Planning Institute of Southern Africa (FPI) – the only institution in South Africa licensed to issue the CFP® designation. FPI members are required to maintain their status through continuous professional development (CPD) and annual membership fees, ensuring they remain informed of industry updates and ethical standards. Membership in a professional body like the FPI indicates a commitment to maintaining high standards in financial advice.
What happens if you leave or retire?
A financial planner is often a lifelong partner, so understanding how their practice is structured is important. Ask who will manage your portfolio if your advisor is unavailable or leaves the firm. Is there a succession plan in place? Does the advisor own equity in the practice, or are they an employee whose tenure could be terminated at any time? Look for an advisory firm with depth – one that ensures continuity and knowledge transfer should any changes occur.
How will I pay for your advice?
The industry has steadily moved away from commission-based models toward professional, fee-based advice. Historically, high upfront commissions created incentives for brokers to sell products rather than offer impartial advice. Today, most reputable advisors charge a fixed fee to develop a financial plan and an annual fee based on assets under advice. By charging professional fees, your advisor is incentivised to provide objective advice that’s in your best interest – and to work with you long-term to achieve the best outcomes.
Can you offer truly independent advice?
It’s important to establish whether your advisor is independent or tied to a particular institution. Advisors who are limited in the range of products they can offer may be incentivised to recommend certain financial solutions, which could conflict with your best interests. A genuinely independent advisor will have access to a broad universe of investment and insurance solutions and will not be influenced by commissions or incentives. Ask how they choose their preferred providers, how frequently they reassess their offerings, and what happens if a provider no longer meets professional standards.
Do you offer the full suite of financial services?
Comprehensive financial planning usually includes a variety of services: insurance (risk cover), local and offshore investments, retirement planning, tax planning, estate planning, and possibly business succession planning. A firm that offers the full range can ensure that your portfolio is integrated and well-coordinated. If there are areas where the advisor does not specialise, find out whether they work with external specialists and who those service providers are.
How often will we meet and review my plan?
Your financial plan should evolve as your life circumstances change. Ask your advisor how often your plan will be reviewed and updated. Establish the frequency of scheduled meetings, the extent of their availability for ad hoc queries, and how the rest of the team supports the client relationship. Also, clarify whether additional consultations incur fees and what turnaround times you can expect for updates and queries.
What level of service can I expect?
A service level agreement helps manage expectations and outlines the advisor’s commitment to client service. Ask what the SLA includes – such as turnaround times for emails and calls, the frequency and format of reports, and how your advisor will keep you informed about changes in legislation or economic conditions. Also, ask about their approach to compliance, data security, and how your personal information is protected. Consider their use of technology – from secure communication platforms to advanced financial planning software – as these can enhance your experience as a client.
Choosing the right financial advisor is one of the most important decisions you’ll make. By asking the right questions upfront, you can build a trusted relationship with a professional who understands your goals, acts in your best interests, and provides expert guidance as your financial journey evolves over time.
Have a wonderful day.
Sue
