Alexander Forbes Insurance Warns About So Called Free Advice

Alexander Forbes has warned about free financial advice financial services who gives free advice usually has strings attached.

Alexander Forbes Insurance and Financial Serves warned South Africans that they should be wary of 'free' financial advice.

According to the Head of Advisory at the insurance group, Linda Sherlock, "if the advice is free it means the advisor needs to sell you something else to earn money, destroying all objectivity and generally resulting in flawed investment strategies."

The group believes that 'off the shelf' products are not custom created to meet the needs of individual consumers and therefore could lead to problems in the future with financial issues.

Sherlock said that the smartest move South Africans could do was plan for their life by choosing a sound partner to help make important financial decisions.

She said that, tragically, many consumers find that the decisions that they made earlier in life led to severe shortfalls and gaps in income in later life.

She explained that this point was illustrated by "the low number of South Africans with up to date wills in place, a tragic legacy left for their loved ones to deal with."

Sherlock believes that South Africans should make sound decisions based on their own personal needs and those of their families, in terms of insurance and investment.

Financial planning should not, as a rule, be driven by an immediate need. Problems are fixed better if their solutions were planned in advanced.

In addition, the plans made should take into account the person's ever-changing situation and they should be adjustable.

Most importantly, Alexander Forbes believes that the advice should be paid for, although it could be offset against commission earnings if insurance products are purchased.