Four Simple Suggestions to Help Your Adult Children on Their Investment Journey

“The easiest way to manage your money is to take it one step at a time and not worry about being perfect” (Ramit Sethi)

One of the most often repeated pieces of financial advice is to start as early as possible. It is a simple and powerful thing to do. But for young adults starting their working lives, it’s not always easy to know where to begin.

The world of investing can seem intimidating for someone who has no experience and has never received any guidance. So, if you have children and grandchildren who are at the age where they are starting on their own investment journey, here are four simple suggestions that can help them to find the right kind of advice to get them on their way.

1. Use social media, but use it wisely
   
   For many young adults, social media is the first place they look when they have a question about just about anything. Investing is no different, but it is important to be discerning.
   
   Don’t take advice on what to invest in from celebrities or sports stars. Often they are being paid to promote things they actually know very little about. 
   
   Rather look for qualified financial advisers with a social media presence. If an adviser has gone to the trouble of being active on social media, that suggests that they are likely to relate to and understand the needs of younger clients.  
   
   
2. Understand what it means to be qualified 
   
   All financial advisers in South Africa and the businesses they work for need to be registered with the Financial Services Conduct Authority (FSCA). Before you meet with anyone, look them up on the FSCA’s website to confirm that they are legitimate. 
   
   There are also different qualifications that advisers can hold. Some tertiary institutions offer certificates and postgraduate diplomas in financial planning. The Financial Planning Institute also offers the globally-recognised certified financial planner (CFP) accreditation.
   
   Always ask what an adviser’s qualifications are and what they will offer you.
   
   
3. Know what you’re looking for   
   
   Always pay attention to what an adviser says that they will do for you.
   
   The job of a good financial adviser is not to get you the best possible investment returns. Anyone promoting their services on how much money they will make you is therefore probably not actually out to look after your best interests. It is more likely that they are trying to sell you products than give you genuine, individualised advice.
   
   Good financial advice is about understanding your needs and building a plan to meet those over the long term. That isn’t about buying the ‘best’ shares or funds. That is about listening to you, getting to know who you are, and supporting you on your financial journey.
   
   
4. Ask what it is going to cost  
   
   There are many ways to pay for financial advice, and different advisers will charge you in different ways. Some will ask for an hourly fee, some might ask for an annual retainer, and others might charge a percentage of your portfolio.
   
   Always ask why an adviser charges in a certain way, and what the rands and cents implications are.
   
   You wouldn’t get a haircut without knowing how much the hairdresser was going to charge you for it. Financial advice is no different. Know what you are paying, and be sure that you are comfortable with it.

To help your children or grandchildren on their investment journey, suggest that they speak to your financial adviser.