In 2018, the voluntary savings level of South Africans, including working and non-working South Africans, was said to be as low as 3%*. Even for those of us that are managing to save, we may not be maximizing our savings because we are making use of the wrong products or products that are not suitable to a particular client. Some of us may even fall victim to investment scams.
- Because financial services can be so specialized and the information about financial products can sometimes be difficult to process and understand, it is always better to seek the assistance of a professional who will help you to determine what product you need and can afford.
- Consumers should only seek financial advice and assistance from registered financial service providers, also known as financial planners or advisors. A financial service provider must be registered with the Financial Sector Conduct Authority (FSCA) for the provider to give consumers advice.
- When a financial service provider is registered, they will have a registration number provided to them by the FSCA. It is advisable to ask the financial service provider to give you this number and then use it to confirm, with the FSCA, if the provider is authorised to sell a specific product and/or provide financial advice.
- Never entrust your money to a company or individual that is not registered. When you deal with someone who is not registered, they are not subject to the Financial Advisory and Intermediary Services (FAIS) Act. This means that they are not authorised to give you advice or recommend financial products and that your money is not protected. You will also not have any recourse if the advice you are given is inappropriate
- Be careful if a financial service provider recommends a product if they have not conducted all the steps they are required by law to take before they give you advice and never feel pressured to accept any recommendations or suggestions made by
the financial service provider.
- These steps include the financial adviser identifying all of your personal and financial needs, objectives and priorities.
- The fees that you will be charged for the advice and for the product itself, must be disclosed as a monetary figure, for example, R70, and not just as a percentage, unless you are able to easily work out the monetary value from the percentage.
- The financial adviser must also distinguish between a possible broker fee and any other fees and what services these other fees might relate to.
- All the advice that is given to you before you choose a savings or investment product must be recorded and you must be given a copy of the recorded advice.
- Once you start with a savings or investment product, you must check your statement and must be sure that you are not being charged fees higher than what the financial service provider said you would be charged.
- Savings and investment products, as with other financial products, should be reviewed at least once a year to see if they still meet your needs and circumstances, and where they don’t, the necessary changes must be made. This is particularly relevant now with so many people’s financial circumstances negatively affected by the pandemic.
Where can I find an authorised financial service provider?
There are a number of financial service providers around the country and you can find one closest to you, just remember to check that they are registered.
Go to www.fpi.co.za to find an authorised financial planner and to www.fsca.co.za if you need to check if someone is registered.