WHAT WE DO

I think this largely depends on the complexity of your finances and what your overall portfolio is made up of. Generally speaking, most insurances / medical aid/hospital plans etc only change once a year so perhaps for those types of policies you can reassess them on the anniversary date each year to make sure the cover is still relevant and suitable and that the premium you are paying is competitive in relation to the rest of the market.

When it comes to investment and savings accounts, I’d be inclined to investigate them on a more frequent basis as the majority of these accounts fluctuate daily and what you see today can be vastly different to what you see in a year’s time. It’s good to have an understanding of what your investment allocation is, how the portfolio is performing, the fees that are being charged etc to make sure you don’t look back in 5 years’ time and realise the portfolio hasn’t done what it was mandated to do, because generally at that stage it’s too late. .

I advise and encourage investors to get involved in their portfolios, ask the hard questions and really make an effort to try have a basic understanding of what you are investing in. Ultimately it is the advisor’s responsibility to ensure the portfolio meets the requirements of the client, but we’ve seen some very questionable calls made by other “brokers” for additional commissions and incentives which would never make it past the client if they had a better understanding on the inner workings of their portfolio.

When it comes to insurances, medical aids, hospital plans etc the things to consider are the suitability of the cover in question, how cost effective the option you have is, are their alternatives in the market that could perhaps better meet your needs and save you money, are all your bases adequately covered, are you over covered or under covered etc. Ultimately as a client you want to know that you’ve got the most suitable and adequate and option at the most cost-effective price. Insurances, both long and short term, are generally a grudge purchase so the idea is to make sure that you are covered for all eventualities while keeping the monthly premium as low as possible. If you deal with an IFA (independent financial advisor) they can reprice your full insurance portfolio across various providers annually to make sure you are getting as much bang for your buck as possible.

• Fees
• Risk
• Return
• Tax
• Liquidity

If you’ve assessed your investments across these 5 spheres and you’ve got a good understanding of where each of them sits across each factor, then I’d say you are 90% of the way there. I’ve included fees at number 1 as I believe this is where the bulk of the ambiguity lies, with most clients not really knowing the different layers of fees and costs being charged between the various parties involved in a transaction. I won’t go into each of the potential underlying costs but if you request an EAC (effective annual cost) table from your advisor it will give you a good indication of what you are paying on an annual basis.

The other factors are all unique from client to client depending on their specific goals and objectives and you can create a bespoke solution that ticks all the boxes depending on what they are trying to achieve.

As I’ve already stated above there are various factors you should be certain of but the two general areas I’d really try grasp are 1) Does the specific product / account meet YOUR needs and wants and 2) what exactly are you paying for the product / account both upfront and on an annual basis as this could have a major impact on your end result, especially when looking at savings and investment accounts.

A good place to start for most clients is to draw up a budget and a personal balance sheet. This will give you a good idea of what’s coming in and what’s going out each month, and what your overall net worth is i.e. when you add all your assets together and minus your total debt what is your net position.

Once you understand both these positions you can start working on them to ensure they tie in with your end goals or objectives whatever they may be. For a lot of people, there is a massive disconnect between what they want to achieve and what they are actually doing on a daily basis which leads to them veering far away from where they initially intended ongoing.

There are various scenario planning tools that you can use to map out exactly what is required from you financially to meet your goals, both in the short and long term, which are vitally important to know where you are currently and what needs to be done to make sure you end up where you need to be.

In summary, if you want to improve your personal finances, allocate more time to better understand your financial position together with your advisor and regularly monitor your progress to ensure you are on track to achieve your goals. After all, “a goal without a plan is just a wish”