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Navigate money smarter
Research shows people who get professional financial advice have more financial planning success. Whether you opt for a financial intermediary who is "tied" or closely related to a service provider, or independent (has no ties to one service provider), make sure that the person is a certified financial intermediary and well qualified.
guidance
Types of financial intermediaries
- Types
"Tied" financial intermediaries
"Tied" intermediaries are typically employed by a financial services provider like Sanlam and will advise clients on Sanlam solutions and services. They are often also accredited to sell solutions from competitor companies. Given that "tied" financial intermediaries are employees of a particular financial services provider, the financial services provider stands in for the advice. Clients who make use of "tied" financial intermediaries therefore have recourse against the financial services provider who employed the intermediary.
Sanlam's BlueStar intermediaries
BlueStar practices offer clients a one-stop shop and access to specialised services like life insurance, estate planning, short-term insurance, retirement planning and investment planning. BlueStar practices are built on the premise that financial intermediaries cannot be experts on all the solutions in the market, given the vast variety of financial needs from different categories of clients. This model allows financial intermediaries to specialise so that they can identify the most appropriate solutions to meet their clients’ needs.
The BlueStar concept positions the relationship between the client and the financial services provider, instead of between the client and an individual intermediary. You still receive personalised service, but the advice does not depend on only one individual. This ensures the continuity and longevity of the relationship. You can get advice for all your financial needs in one location.
The financial advice given through BlueStar practices is backed by Sanlam, which provides security to both you and the financial intermediary. Products sold are not restricted to Sanlam’s.
Independent financial intermediaries
Independent financial intermediaries are authorised to sell a variety of companies’ solutions and services. The planner may provide advice on and sell solutions from Sanlam as well as other companies. The advice is considered ‘independent’ as independent financial intermediaries operate under their own licence.
faqs
What to ask a financial intermediary
- What are your qualifications?
A financial intermediary should have an industry acknowledged qualification. Also check whether the person is authorised by the Financial Sector Conduct Authority (FSCA) as a financial services provider or the representative of a provider.
- How will you be paid?
Your financial intermediary may receive either commission on solutions sold, or a payment for advice given, or a combination thereof. This could be an hourly rate, a retainer or a percentage of the assets managed for you. Make sure you know how your financial intermediary will be paid before you proceed.
- What services do you offer?
Choose someone who can help you with an extensive range of services and can offer integrated advice. If you need specialised advice, get the services of someone who has in-depth knowledge of the area in which you are interested, for example, estate planning.
- Can I see an example of a financial plan you compiled?
The strategy should be thorough, but clear and easy to understand, with minimal jargon. A good financial planner intermediary will not mind going over the plan repeatedly until you are confident you fully understand it.
- Do you require a minimum investment?
Some firms and financial intermediaries only take on clients in a high income bracket who have a large amount to invest.
- Are you "tied" to a financial services provider?
Consider the benefits of choosing a financial intermediary who is affiliated with a reputable financial services provider that has been in the industry for many years. Not only is he/she likely to be well-trained, but he/she will also have access to strong support as well as in-house expertise on all aspects of financial planning.
- How long have you worked in the industry?
While experience is important, do not discount younger financial intermediaries – they are generally well-trained. Rather check for specialist experience in the particular financial services you require.
- How will you update me about my investments? And how often?
Ask how often your financial intermediary is prepared to meet with you to discuss your financial needs, and whether you will be meeting with him or her personally or with an assistant. Also ask how often you will receive written updates on your investments.
- Has the financial intermediary asked me the right questions?
The financial intermediary should be eager to find out more about you – to understand your particular financial goals and investment objectives. He/She should show insight into what is important to you and how your financial goals can be achieved.
- Is this the right financial intermediary for me?
When all the other questions have been answered, you need to feel you trust the financial intermediary enough to be completely open about your finances. You will be establishing a long-term working relationship and it is crucial that you feel he/she will at all times have your best financial interests at heart.