Financial planning essential for all


“We really make a considered effort with the Financial Planning Institute to try and help consumers understand what financial planning is all about. It’s an ongoing exercise and we dedicate this week to that initiative,” Paul Roelofse from the Financial Planning Institute (FPI) told CNBC Africa.

“We have partners like the Financial Services Board and who join us in that initiative. What we’re really trying to do is try and help consumers understand what financial planning is, how it differs from pure financial advice.”

Roelofse explained that while financial advice tends to be done in isolation, a financial planning exercise done by the FPI looks holistically at a client’s financial situation from where they currently are with their finances to where they would like to be in the future. The organisation thereafter decides what appropriate action to take.


“A good starting point is the Financial Planning Institute, who is the custodian of the qualified Certified Financial Planning mark, an international mark which needs a lot of qualification and a high code of ethics to maintain itself. The members that belong to the institute are qualified,” Roelofse added.

This year’s FPI workshop will run from 25 to 29 November. In 2012, over 150 companies across South Africa participated in Financial Planning Week.

“In a financial planning process, the initial phase is to sit down with a client and clearly understand how your fees will be charged and how you would actually benefit from that. All relative to the work that will be done and the quality of the advice,” said Roelofse.

“What we encourage our members to be is totally transparent so that you know what you’re getting and why you’re paying for what you’re getting as well.”

One of the tools offered by the FPI is a risk analysis process that allows the consumer to understand what their tolerance to risk is. This is done by filtering lifestyle and situational questions. Once completed, it lets you identify how one is positioned in terms of taking risk.

“Financial planning is for all, it’s not really just for situations. You can start financial planning from the time you start work. You really need to address where am I now, where would I like to be somewhere in the future and how do I get there. That’s really the essence of the plan,” Roelofse explained.