This archive report was first published on 21 December 2019.
As I sat in a taxi on a rainy morning, I couldn't help but think about the importance of having a personal financial planner. The chatty driver, who was as talkative as a radio host, was telling me about his investment group, where 20 members save Sh2,000 every Monday.
He explained that they send the money to the chair and at month end, he sends the money to the member whose turn it is to 'eat' that month. I told him that I don't believe in merry-go-rounds for investing, but he scoffed and said that it's difficult for someone like him in business to put money aside.
He mentioned that most people can't save Sh80,000 in a month, and I couldn't help but think that everybody needs a steady hand to guide them in managing their money. That's why we join chamas and investment clubs, start merry-go-rounds and table banks, reach out to accountability partners, and sign up for courses in personal finance.
However, sometimes we lack the discipline and insights to see our grand planning through. That's where a personal financial planner comes in. They can help you align your personal finances with your financial goals, while bearing some of the investment risks.
Research first and find a qualified professional with proper papers handling your hard-earned money. You can get an in-house financial planner from a bank, sacco, asset management firm, or investment bank. Alternatively, you can get an independent planner.
When you meet with the planner, it's essential to establish a rapport. You want someone you can trust, someone to have a loose drink with to openly take-stock of your growth and goals. Your gut will intuit you to each other's energy, so listen to it.
During the first meet, you'll discuss who you are, what you do, where you are with your finances, and what you want from this relationship. You'll also disclose all your income and share your financial goals, including your short-term, medium-term, and long-term goals.
They'll also ask about your risk appetite, which informs the type of products they envision investing for you. Financial planners keep a percentage of your investment income, so it's essential to ask about their management fee and whether it's charged annually or monthly.
As a certified accountant with ACCA and a former financial auditor, I highly recommend getting a personal financial planner in 2020. They can make a significant difference in managing your finances and achieving your goals.
