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What Is An Independent Financial Planner Anyway?

Posted In: Finding a Planner

After explaining in our last post how planners charge fees, we now
move to our next post which deals with how planners operate.

If you're pressed for time, the most important takeaway from this post is:

Independent planners will be able to sell products from any company,
whereas tied planners will only sell the products of one company.
Make sure that you know how much work your planner will do themselves
versus someone else in their team.
Anyway, let's jump in – it’s important that you understand what goes on
with your planner behind the scenes.

Independence
Tied Planners

These are planners that only sell one company’s products. For example,
Insurer X has tied planners whose sole job is simply to sell Insurer X’s
investment and insurance products.

Tied planners may be cheaper than independents, but will not be completely
objective and cannot offer you the range of products that Independent planners
can. If you are simply looking for a single insurance or investment product,
rather than a holistic financial plan, then a tied planner could be good for you.

Independent Planners

These are planners that are not tied to any specific company and are able to
place business (sell products) with any product provider.

If you are looking for a planner who can help you over the long-term and provide
you with a holistic view of all the products out there, then an Independent planner
is the way to go. Independent planners have the benefit of being able to offer a
much wider array of products than a tied planner can and can tailor them to best
suit your needs.

Remember though, just because a planner works for a known product provider
(and has that company name on his/her business card) it does not necessarily
mean that they are Tied; there are many planners who work for large organisations
that are entirely independent.

Individual or Team Servicing
Whilst you may initially meet a senior member of a financial planning firm
(or association) be aware that your day-to-day interaction and communication
with the firm may be with one of their more junior colleagues.

This may not be a big issue for you (and may actually be better as they may
have more time to devote to your financial health) but you should definitely
try to get a commitment from the senior planner that they will continue to
provide oversight and guidance in managing your account.

Conclusion

So: Make sure you understand whether your planner is Independent or Tied to a
specific Product Provider. Both have their advantages but it’s important that you
know who you are dealing with.

Secondly, just ensure that you will have adequate oversight and guidance from
an experienced planner, even if a more junior team-member takes care of the
day-to-day servicing of your account.

If you want help finding a quality and accredited planner visit our website and
be on the lookout for more posts in the future.

- See more at: https://www.objectivemoney.co.za/#/what-is-an-independent-financial-planner