When we hear about a financial advisor, what instantly comes to mind is that we have to be extremely affluent to need or afford one. However, that is way off the mark. Financial coach and advisor Margaret Njeri shares tips on why women should get financial advisory services.
How would you describe a financial advisor?
A financial advisor is a person who can guide people on money matters, build a healthy money mindset and make sound financial decisions.
Why is it important for women to have a financial advisor?
Women need to prioritise their financial check-ins to take their finances to the next level. They are able to save more, avoid investment scams, manage debt effectively if they are in debt and avoid financial mistakes that may cost them in the future.
How do you choose a financial advisor?
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You need to identify your individual financial needs to know which advisor works for you. Are you looking for a debt management advisor, an investment management advisor or an advisor with expertise in both? You need to check qualifications; financial advisors specialised in insurance should be licensed by the Insurance Regulatory Authority, while investment management advisors are registered by the Capital Markets Authority. The next step is to look at their track record to see if they are experienced in helping clients with similar goals as yours. You need to ask the right questions, like what services they offer and how they charge. A financial advisor should regularly update their clients on the state of their finances and uphold discretion.
Should you engage with a financial advisor on a one-off or a recurring basis?
You need to walk the journey with a financial advisor to help you achieve your financial goals.
Is there a point in time when one would say they don’t need a financial advisor anymore?
I don’t think there is a point when one should believe they don’t need a financial advisor. Even when you become wealthy, you still need advice on risk management and identifying market trends.
What financial challenges do women face and how can a financial advisor help address them?
Lack of financial advisory and minimal financial knowledge. We have women in communities who believe financial literacy is only meant for men and those who need guidance on where to invest.
What misconceptions do people have when it comes to personal financial advisors?
The most common misconception is that financial advisors are for the wealthy. But what many people don’t know is that financial advisors offer consultations that can cost as little as Sh3,000. Another misconception is that a financial advisor can be paid through commissions on an insurance policy. There is also a misconception that online financial advice is sufficient.
How can people with diverse career paths benefit from a financial advisor?
In many ways. They can get a personalised financial plan, diversify their businesses, learn how to separate expenses, create emergency funds for their businesses and identify which SACCOs to join to grow their wealth.
How can a financial advisor help build financial security?
The start of financial security is by protecting, managing and growing what they already have. Start by creating a budget and sticking to it and then move towards diversifying investments.