There are 3 main categories of financial planners in South Africa

financial advisor business-cardClients are often confused by the various grand job titles used by consultants. Here is a simple explanation of who is who in the zoo.

1. Does their business card display an insurance company logo?

If YES, they represent a single company and the product they sell comes from their employer.

  • They will always earn commission. If there is no sale, no commission will be earned.
  • Their commission increases with the size of the premium. There is a potential this could lead to overselling.

2. Does their business card display ‘INDEPENDENT’?

If the title INDEPENDENT appears on the card, but no insurance company logo, you are still dealing with a salesperson, but one who works for more than one insurance provider.

  • There is no difference between this person and the first one in terms of commission. Without a sale, they will not get rewarded either.

3. The Fee Based approach

As a Fee Based company:

  • We do not get paid by an insurer
  • Our fees are based on work done rather than selling product
  • When we recommend any insurance product, we do not accept payments from the provider
  • We offer a service (that is what you are paying for).

Northwood Financial Services is a Fee Based company

We take a holistic approach to financial planning:

  • We recognize that no insurance company has all the answers to your financial planning needs.
  • We acknowledge that unless our clients learn to manage finances, they will always have more expenses than income.
  • We understand the client needs a safe coaching space so that they learn how to manage financial planning.
  • We guide clients while they set long, medium and short term financial goals.
  • Sometimes we will use assurers, but our arsenal contains a far broader range of products and techniques to achieve goals.

Let’s explain how this works:

Mr. Smith is sold a life package with a premium of R1 072.26 pm. By the 13th month the broker would have earned R13 553.25. and on every anniversary that same broker will get more commission as long as the policy is in force.

We would not have taken a single cent from the insurer and the client will have benefitted by not paying the commission. Our upfront charge would have been R5700.

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