A Cape Town Financial Advisor
July 15, 2014
Retirement Planning
September 30, 2014
If a financial advisor is someone who provides you with financial advice, how is an independent financial advisor any different?
What is the difference between a Financial Advisor and an Independent Financial Advisor?
This is an area that is often overlooked when selecting a financial advisor but should be a critical factor in your decision as the implications can be far reaching.
While both financial advisors and independent financial advisors offer advice on financial matters and recommend suitable products, this is where the similarities end.
Most non-independent financial advisors have direct links or are employees for banks, life insurance companies and fund managers. These non-independent advisors find themselves in the difficult position of having to balance your needs with the needs of the company they work for. This conflict of interest ultimately results in compromise for your financial future.
Imagine the conundrum a non-independent financial advisor faces. Their goal is to offer you an honest financial plan to match your risk profile, enhance your wealth and protect your lifestyle over the long term. However as employees of a company, they are restricted to trying to achieve this goal with the limited number of products their company offers. Couple this with having to please shareholders of their company by selling products in the short term, possibly with increased fees, and you have a recipe for disaster. Even if they wanted to, they are unable to make decisions in your best interest.
Now compare this situation to that of an independent financial advisor. An independent financial advisor has the same goal of compiling an honest, financial plan to achieve your goals. However as they are not affiliated with any company, they can offer you the best possible investment products from the entire market and are under no pressure from external sources to push specific products.
By removing the conflict of interest that non-independent financial advisors experience, you are left with a much healthier environment in which financial plans can prosper.
Advantages of using an Independent Financial Advisor
- Much larger range and depth of Investment Products and Services to suit your needs.
- Not affiliated with one specific company and therefore offer objective, unbiased advice.
- By being independent, they can offer more competitive pricing compared to large companies that have to look for increased margins to please stakeholders.
- Your investments and policies will still reside with large reputable companies but you have the added benefit of independent advice.
By being aware of the conflict of interest that non-independent financial advisors experience and understanding the advantages that independent financial advisors offer, we hope it makes your decision of selecting a financial advisor that bit easier.
If you are looking for an independent financial advisor with a friendly, open approach, call Ivan from Ginsberg Financial Brokerage on 021 434 8065 or email ivan@gfb.co.za
