Meeting with a financial advisor

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krepunk

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So I'm having a follow up meeting with a financial advisor from Hereford Group on the weekend. When we first met he basically introduced himself and told me what the company is about and got some information from me.
This meeting he wants to show(sell) me the products he has in mind for me in my current situation.

I'm not familiar with investment products and not sure what sort of things I should be looking out for? Is there anything I should avoid?
What kind of questions should I ask?
Obviously I don't want to jump in and sign everything away on the weekend, so I will have time to look over things after the meeting hopefully... I just don't want to be suckered into anything.

Help from the financial gurus on this site would be great :)
 
Hi, New member here.

Registered because of this topic as it just so happens that I am a financial advisor with a Liberty brokerage as well.

Your financial advisor would have done a Financial Needs Analysis on your current situation and will be presenting the findings of his calculations. He should be explaining the reasons behind why he feels you should take certain products and you need to make sure you understand and agree with those reasons. It might begin to get a little technical, ask him to simplify it for you. For eg. 'Sir you currently have no disability cover and should you become disabled and unable to work you would need X amount in order to replace your income.' ok so if you have 5mil paid out to you, what then? how would he make sure you received a sustainable income from that for the rest of your life or until retirement age? Also wrt the disability portion he might throw the terms OD and OOD at you, make sure he explains the difference. you dont want to be paying extra for something you don't need or doesn't apply to you.

With regard to investments, all the investments that we offer are linked to the markets. They are very transparent and cost effective although very few of them have guarantees, meaning there is a potential for loss. Just remember that you havent made a loss until you pull your money out because as long as its in there it will pick up eventually and over a longer term, say 10 years+, its nigh impossible that you wont make a profit.

He will talk about retirement annuities with you and across the industry, they all work the same, its just where the money is invested that differs.

Sorry about the long post but i hope this helps and if there is anything else you need to ask, feel free.
 
Welcome Rollz,

Krepunk, you don't have to be scared of much, just listen to him and make up your mind there. They will give you enough time to rethink everything. My adviser, who is currently in my home town, emails me my documents then I send it back to him after two weeks or so when I am certain I want to take a specific product. My adviser has told me a few times that there is a better package available at some competing company, but I keep to my advisers products because the differences aren't always that big anyway and I would want to have all my products at one place. Advisers will almost always try to give the best advice (almost because there is alway a chance of someone doing dodgy stuff), cause if they do, you will come back and take or update a product.
 
Hey, Ditto ... I'm meeting with one on Tuesday.

@RoLLz - A question. I am a member of the PPS and have both Life & Sickness / Disability Cover with them and an RA. I mentioned this on the phone to the guy I am meeting and he indicated that he is not a fan of PPS because they are very expensive. I'm guessing that he is going to recommend that I terminate those and take them elsewhere.
Can I ask what your opinion is, please.

Thanks,
Greggle
 
krepunk said:
So I'm having a follow up meeting with a financial advisor from Hereford Group on the weekend. When we first met he basically introduced himself and told me what the company is about and got some information from me.
This meeting he wants to show(sell) me the products he has in mind for me in my current situation.

I'm not familiar with investment products and not sure what sort of things I should be looking out for? Is there anything I should avoid?
What kind of questions should I ask?
Obviously I don't want to jump in and sign everything away on the weekend, so I will have time to look over things after the meeting hopefully... I just don't want to be suckered into anything.

Help from the financial gurus on this site would be great :)
Click to expand...

The only people making money are the financial advisors that take their cut every month. My business partner and I had various investments with various degrees of risk in various types of investments with various institutions. Over 8 year period we lost money. We cancelled all of them and used the money to pay off our bonds and buy more property. Don't be bull****ted by graphs showing 20% growth etc...it's all bull****...the monthly admin costs chow up all your so called profit.
 
Thanks for the responses so far. I guess the main thing is making sure I understand what is being offered and taking the time to make a right decision.
 
I am not an expert but thought I should mention: no one will look after your money as careful as you would yourself. Try to educate yourself. It may take a lot of time but absolutely worth it. I'm glad that you are not gonna sign without considering things carefully. It is ultimately about commission for most guys.

Cancelations may be costly... Don't be too quick to sign on a dotted line. It's commendable that you are talking to an advisor and you wanna get your house in order. All the best.
 
Ask him to explain everything in layman's terms. i.e. with minimal financial & legal jargon. If he can't do that then kick him to the curb. Also get him to deviate from his prepared sales pitch. Doesn't matter what...the point is to see how well he recovers from it. If he knows his stuff he'll improvise & integrate on the fly. Just make sure you don't come across as openly hostile. ;)

I'd stay away from mixed purpose products. e.g. Insurance with an investment aspect bolted on. Makes things murky & difficult to compare.

If you've still got debt (house/car) then paying off those are likely to be a much better route than taking an investment product.

Greggle said:
the guy I am meeting and he indicated that he is not a fan of PPS because they are very expensive.
Click to expand...
That strikes me as unlikely due to the way PPS is structured.
 
HavocXphere said:
If you've still got debt (house/car) then paying off those are likely to be a much better route than taking an investment product.
Click to expand...

Thanks for the advice. I only have a car, so is it better to just put extra money towards paying off the car?
 
krepunk said:
Thanks for the advice. I only have a car, so is it better to just put extra money towards paying off the car?
Click to expand...
Yes definitely. The effective gain you make (interest rate on loan) is risk-free, commission free and guaranteed....unlike those products.
 
krepunk said:
Thanks for the advice. I only have a car, so is it better to just put extra money towards paying off the car?
Click to expand...

IMHO, this will only yield fruit if the OP will be disciplined enough to keep his car for a few months/years after settling it and invest what he used to pay monthly for the car. I say "discipline", because majority of people will quickly upgrade as soon as they settle their car. Keep in mind too, the power of compound interest when you start investing at an earlier age. I understand the reasons for settling debt before investing but sometimes it's just smarter to try to juggle everything at once...
 
NetDude said:
IMHO, this will only yield fruit if the OP will be disciplined enough to keep his car for a few months/years after settling it and invest what he used to pay monthly for the car. I say "discipline", because majority of people will quickly upgrade as soon as they settle their car.
Click to expand...
The gain is exists on the liability side (debt) exists regardless of what he does with the asset/savings. Whether he uses it to buy a newer car or reinvest it, either way he benefits. You've got a point though with the re-investment....the gain won't be compounded if he goes the car route.
 
Personally, the habit of slowly building a portfolio (even with small amounts) is exciting and leads to a sound way of thinking about money i.e. ownership instead of consumerism. For that reason, I pay off the debt but keep some left over for a building portfolio, which can almost be seen as a hobby if you enjoy exploring different investment strategies.
 
wndrbees said:
Personally, the habit of slowly building a portfolio (even with small amounts) is exciting...
Click to expand...

Absolutely! This makes sense to me... Even while still in debt... start building slowly.
Let's paint a scenario: a young professional starts to work at about 23, buys a car and perhaps a few years later a 2 bedroom flat.... and puts everything he has into paying off this debt. He gets married at 33 (this is not a invitation to start a debate about marriage :)) and his new wife has different views on investing/saving, etc. His initial plan was to start investing once the car/house are paid off... What happens now? The new MRS is interested in a new home, family starts to grow, etc. When is this poor guy gonna start investing? When kids leave the house? :) Having said that, there are very good reasons why one should pay off debt first.
 
Greggle said:
Hey, Ditto ... I'm meeting with one on Tuesday.

@RoLLz - A question. I am a member of the PPS and have both Life & Sickness / Disability Cover with them and an RA. I mentioned this on the phone to the guy I am meeting and he indicated that he is not a fan of PPS because they are very expensive. I'm guessing that he is going to recommend that I terminate those and take them elsewhere.
Can I ask what your opinion is, please.

Thanks,
Greggle
Click to expand...

Hi Greggle

We do a helluva lot of research into competing products and have found PPS to be more expensive than many other companies, although not by as much as would make a huge difference to your bank account. More significantly we have found that the value for money that PPS offer is not nearly as good as they would have you believe.

One of the major aspects that people tend to neglect when looking at insurance is the value for money factor. Look at how the benefits work and what conditions and waiting periods are attached. you say you have disability cover with them, remember that nearly all disability cover works on the presumption that you will not be able to do your job therefore we pay you out to replace the income generating capability you have lost. But how do they assess that you cant do your job? what conditions have to be met in order to pay out your benefit? A good financial advisor should sit down and make sure you understand how this works and if he is replacing your existing policy he should explain the differences in respect of these things between the policies.

You dont want to take a policy that is stricter in their payout conditions.
 
roLLz said:
Hi Greggle

... you say you have disability cover with them, remember that nearly all disability cover works on the presumption that you will not be able to do your job therefore we pay you out to replace the income generating capability you have lost. But how do they assess that you cant do your job? ...
Click to expand...

Valid points you are raising here, roLLz. I bought my disability cover from PPS over 10 years ago. About 4 years ago I learnt what PPS' definition of "disability" is... most professionals (esp. those who quality as PPS members) would be able to do their job even if they were to have their legs amputated. Will PPS pay out? I'm not sure, but I don't think so. According to PPS, disability = cognitive disability.

I think their life cover is among the best? R100 pm for every R1m? Not bad... Of course, this only becomes an issue once you have dependants.
 
NetDude said:
... most professionals (esp. those who quality as PPS members) would be able to do their job even if they were to have their legs amputated. Will PPS pay out? I'm not sure, but I don't think so. According to PPS, disability = cognitive disability.

I think their life cover is among the best? R100 pm for every R1m? Not bad... Of course, this only becomes an issue once you have dependants.
Click to expand...

This goes back to something i mentioned earlier, OD and OOD. OD is Occupational Disability meaning if you cant do your job and there is another reasonable occupation you could take up, we would not be obliged to pay out (an attorney unable to appear in court due to a disability but still able to lecture on law at a university) and OOD which is especially structured for professionals in that we would pay out even if there is another reasonable occupation you could take up that is related to your current profession.

Remember that life cover is not just to leave something behind for your dependents, it is also to cover any debt you might have on your name so that the banks have no reason to dip into your estate to claim any unpaid debts.
 
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