The saying goes, “If you think it is expensive to hire a professional to do a job, wait until you hire an amateur”. As with any product or service an expert might cost you more, it really depends on what kind of service or advice you are willing to pay for. Some people would willingly pay for a Mercedes while others would rather buy a second hand car which is fine, but remember, you get what you pay for. The Mercedes provides luxury, power, high service standards, cutting edge technology and reliability. If you buy a second hand car, you buy a cheap car.

Purchasing any financial product is generally a grudge purchase because the benefits are only ever enjoyed some time in the future and it therefore makes sense that you want to pay as little as possible for the product or service. Or does it?

The Certified Financial Planner (CFP ®) is the highest technical certification that a financial planner can obtain. A person carrying this trademark is like the Mercedes in the financial services industry. Not only are they technically more competent but they also abide by a higher code of conduct than what is prescribed by legislation. In South Africa, only 1% of the 80 000 licensed financial planners have this qualification.

The benefits enjoyed by clients dealing with a CFP ® professional are numerous and I shall illustrate one of these with an example. I recently met with a client and his spouse who between the two of them had been sold a myriad of insurance policies by product floggers over the years. A thorough analysis of their financial plan indicated that they did not need any of the additional cover they had been sold as their asset base was more than sufficient for their needs. We managed to save this client thousands of rands per month in insurance premiums which they did not need and add over R4 million to their retirement assets.

A good financial planner can save you money in a number of other ways including tax by making sure that you use the correct investment vehicles. A lot of clients are sold endowment policies when their marginal rates of tax are less than 30% whereas a unit trust structure would be more tax effective. This simple strategy can save you tens of thousands of rands.

The next time you are in need of financial advice think twice about choosing the free or cheap options.