This is why you should have a financial adviser in your life

Many people think they do not have enough money to warrant having a financial adviser, but that is not true. Even if you have little disposable income to save and invest, expert advice could make it go further than you can take it.

Just like in cricket, success in your financial journey requires teamwork and strategy, Bertie Nel, head of financial planning and advice at Momentum, says.

According to the Reserve Bank, the ratio of household debt to nominal disposable income in South Africa reached 62.4% in 2023, slightly up from 62% in 2022. In practical terms, this means that for every R100 a household earns after tax, it uses R62.40 to pay debt.

“Such high levels of household debt leave little room for saving or investing, making it difficult to build financial security.”

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Financial adviser is your financial coach

Nel says you must think of an adviser as your financial coach, guiding you to victory on the field of finance.

“Just like every player needs a solid team to perform at their best, having the right financial adviser can make all the difference in reaching your financial goals.

“The right adviser is there to provide the expertise and guidance you need to confront the complexities of financial planning even when life can feel overwhelming and unpredictable at the best of times.”

Nel says a financial adviser can add serious value in this crucial game of life and success at pivotal moments in your life, such as changing your career, planning for big and small life events, coping with a health crisis, making the most of windfalls, preparing for market volatility, managing unexpected expenses and as your goals evolve.

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Navigating career changes

Whether you are changing jobs, switching careers, or dealing with a sudden job loss, a financial adviser can help you make smart financial decisions, Nel says.

“From managing severance packages to preserving and maybe adjusting your retirement savings, they ensure your finances stay on track during transitions.

“Many people do not realise how crucial financial advice can be during a career shift. They can help you to keep your long-term goals in focus while managing the immediate changes.”

Planning for big life events (and the small ones too)

Whether it is a marriage, starting a family, or sending your children to university, a financial adviser can help you plan for life’s big (and sometimes small) milestones by providing strategies to balance the costs while keeping your financial goals in mind.

“Life events, big or small, often come with financial implications that can be overlooked. Sound advice from a financial adviser can help you to prepare to ensure that you can enjoy these moments without financial stress,” Nel says.

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Coping with a health crisis

A serious illness or unexpected medical costs can throw your finances into disarray, Nel warns. Your financial adviser can guide you through any claims, accessing savings and reworking your budget to accommodate these expenses.

“Health crises can be overwhelming, emotionally and financially. The right financial adviser will help you manage the financial side of things, to ensure you can focus on recovery.”

Making the most of windfalls

Should you be lucky enough to receive an inheritance or a bonus, a financial adviser can help you to make the most of windfalls by advising on investment opportunities, tax implications and other ways to grow that money for the future.

“It is easy to get caught up in the excitement of a windfall, but thoughtful planning can turn it into long-term financial security,” Nel says.

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Preparing for market volatility

In times of market uncertainty, it is tempting to make impulsive decisions about your investments. A financial adviser will offer steady guidance to help you stay the course and avoid common mistakes like panic selling or overreacting to short-term changes that could result in value loss.

“When the markets get rocky, a financial adviser provides a calm, strategic approach,” says Nel. “Their role is to help you navigate volatility with confidence.”

Managing unexpected expenses

Whether it is a sudden home repair or an unforeseen emergency, life has a way of throwing financial surprises your way.

According to Nel, a financial adviser can help you create a buffer in the form of an emergency fund and provide guidance on managing unexpected expenses without derailing your long-term plans.

“A solid financial plan includes preparing for the unexpected. Financial advisers help to ensure you have safety nets in place to weather life’s financial surprises.”

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Evolving with your goals

Your financial goals will change over time and so will your financial strategy. Whether you are shifting your priorities or aiming for new milestones, your financial adviser will help you reassess and adjust your plan to align with your evolving life goals, Nel says.

“Investing in a financial adviser is investing in your future. They not only help you manage your finances but also empower you to make informed decisions that align with your goals, no matter what your current circumstances are.”