By Reon Janse van Rensburg
Ruan Smith (27) from Krugersdorp in the West Rand is a young man with a passion for everything that comes his way. Not only is Ruan a person who loves to plan for the future, but is also a smart, qualified chef with a great love for cooking. He was previously in education − already passionate about helping people. Today, Ruan is a senior personal financial adviser at Old Mutual where he daily meets the challenges of the various aspects of his profession.
Solidarity’s Occupational Guild for Financial Professions talked to Ruan about his profession. We inquired about its different aspects and wanted to know how he entered the profession as a young man, the challenges he encounters daily and also the satisfaction he experiences in his profession. If you want to become a financial adviser, Ruan is definitely the person to approach − he is happy to give advice to young people who want to join this profession. Solidarity’s Professional Guild for Financial Professions brings the news making sure that you make informed decisions about your future.
What does a financial adviser actually do? Of course, the name says a lot, but it’s certainly about more than just giving advice on finances.
To be honest, financial advice is much more than just counting rands and cents. I regard it as an opportunity to be a positive beacon for people. Sometimes in life one needs a boost to make the “right” (though sometimes difficult) decisions. We make sure dreams come true, we help to ensure that children have the opportunity to study; that parents have the opportunity to travel after retirement; that families have peace of mind that their loved ones will be cared for in times of need. And it all starts with how we look at money and the relationship we have with it.
Why did you choose this profession?
It was an opportunity to work with people. I have always loved talking to people about their dreams and passions. In fact, I always like advising people on achieving these milestones. I had the opportunity to work as an adviser for Old Mutual, and have not looked back for a moment. It makes my life so much more meaningful when I see how people achieve their goals, especially financially and in times when people believe it to be impossible.
Ruan Smith (Foto verskaf)
How long have you been in this industry?
I have been in the industry for only four years, but still being young, am very much looking forward to the years ahead. The opportunities that will still come my way make me excited to be a part of something bigger. The bigger picture is always evolving!
Would you advise young people to enter the profession? If so, what skills would you recommend for succeeding in this profession?
I would definitely recommend young people to enter this profession. It is one of the best professions for building a successful career. It gives you the opportunity to make your unique mark on society, as well as to build a business for yourself, as the growth potential is infinite. The best skills can always be learned, but I would say that one should have a passion for people. One will need to have good communication skills and learn how to apply time management. The willingness to learn plays an important role, because our lives change daily − there is always something new to learn.
Currently, the world is in chaos, with the pandemic and lockdown putting many people in a tight financial position. What financial strategy would you suggest to improve people’s position? What advice do you have that will prevent them from landing in a similar position in future?
If I have to be very honest − no one could have foreseen the world falling apart in 2020. What is happening during the pandemic is incredibly difficult to understand. There are still thousands of opportunities out there, but there are also millions who are suffering and will not be able to recover financially, psychologically, or in any other way. The impact of this situation will be lasting for many people and my heart goes out to those who are losing their jobs and businesses that they have been building for years.
Then there is always the difficult balance to maintain: taking care of today whilst saving for the future as well. A good start is trying to accumulate between 3 and 6 months’ salary in an investment that you should not touch unless it becomes really necessary. For more security, I would always suggest to clients to rather aim for the 6 month target. The biggest problem is that although life is very expensive, people often spend their entire salary on unnecessary luxuries. Balance is the key word in everything. My suggestion would be to put aside at least between 10% and 15% of your monthly salary into a savings plan for when the world may one day come to a standstill again.
How do you keep abreast of the latest developments in the industry?
I am very privileged to have expert advisers in the office − people who have years of experience and knowledge. They have built very good relationships with economists, fund managers and other successful advisers who always want to help each other. The biggest problem I currently see is that people are in competition with each other and that the competition between companies is huge. This sometimes prevents us from paying attention to problems in the industry. If everyone works together, there will still be enough to achieve success. In this way, people can learn from each other. We have many good sources regularly sending us articles to read. This is the way to learn something new from someone every day.
What is your advice to young people working on their finances?
I think the first thing happening in a person’s life when they start making money is that they look at ways and means to enrich their lives. And this is not necessarily a bad thing; earning your own money, you are entitled to spend it as you see fit. I will try to highlight the positive aspects of financial discipline first. Initially, start small with a life-cover plan and a small savings plan to accumulate capital for the future. You never know when you might need
R10 000 to solve a problem, or to seize a new business opportunity that could generate another stream of income. I know, as a young person, one often spends money on unnecessary things, or on things one perceives will be helping one to fit in with one’s circle of friends or family. Each person earns money differently and builds capital in a unique manner. The most important thing is to first focus on yourself and provide for your own needs before aiming too high, too fast. It’s never too early to save.
Many people start saving too late and do not realise the value of sound financial decisions made in a timely manner. Is there advice for people who are on the verge of retirement? What are the best decisions for people in this position?
I often find myself in a position where customers may have realised too late, or only been able to start saving later in their lives. As a financial planner, one always tries to do the best for one’s client. Unfortunately, there is only so much one can do with money when too little provision has been made. I always try to motivate people not to think about retirement as quitting work altogether, but rather as an opportunity to spend extra time on something that may generate further income. It is not always as easy as it sounds. Too many people live only for the moment, and when they retire, they have to drastically cut down their quality of life. That’s why it’s so important to start saving at a young age.
What would you describe as a healthy investment risk and who could take such a risk? Whom would you advise against taking unnecessary risks with their finances?
This is a difficult question to answer without looking more deeply at each person’s behavioral patterns. For each individual, R1 is important in its own right. Another person only needs 15 R1 pieces to be able to buy bread daily. Still others need millions to maintain their lifestyle. Healthy risk means that you know how each person will react when he or she loses the value of R1.
At this stage, however, we can diversify a little more with the use of foreign-based portfolios that are more long-term focused, and where the focus is on technology, consumers, industry and health. There is an advantage for the client who has between 5 and 10 years to invest the money who knows that money, over longer periods, will always grow due to the compound interest it earns. Although markets are always moving up and down, the outlook is relatively promising. But as we have seen with the Covid-19 pandemic, everything can change in a few days. Therefore, I would recommend that a combination of various investment structures be considered that is appropriate for the individual and according to his risk. A combined portfolio with South African and foreign portfolios, money market, property, as well as minerals (such as gold), may be beneficial.
With the right adviser, one can make better choices, and it may of course help making the necessary changes to portfolios.
Why do you find your job so satisfying?
I really love what I do – it is worthwhile to be able to make a difference in people’s lives. I have an established practice standing firmly behind me, taking a lot of pressure off. What I do, makes a difference in the lives and futures of my clients.