The 5 financial products you can’t do without

01/15/2019

How far does your financial planning go? You may be doing the right things: saving for retirement through your employer, or independently, and paying for basic medical scheme membership. These are the two most accessible financial protections and the ones we understand best and adopt earliest - hopefully, as soon as we start earning an income and well before we own property or assume responsibility for dependants. Having sacrificed a portion of our precious income to cater for almost inconceivable future needs, we feel good about our foresight and discipline.

But as we get older, take on financial commitments such as home loans and car loans, set up home with a spouse or partner, and/or have children, the starter pack above becomes hopelessly inadequate. But with limited resources and so many products and providers vying for your attention, what is the bottom line? Which financial products constitute the next tier of a long-term financial plan, providing the foundation for a secure financial future by covering risk, preparing you for a comfortable retirement and establishing a pattern of saving for immediate needs and future goals?

To get back to basics, Personal Finance asked three well-established financial planners to abandon their preferred approach of tailoring their advice to individual circumstances and to generalise, just this once, about the minimum requirements of any and every financial plan - keeping the package to five products. If you are wondering how much you have to do to take the next step up in the hierarchy of financial planning products, this is your guide.

The planners

Barry O'Mahony has the Certified Financial Planner (CFP) accreditation, is the founder of Veritas Wealth Management in Cape Town, and is a former Financial Planner of the Year. He and his colleague, fellow CFP Rick Briers-Danks, personalised their product selection by visualising a hypothetical married couple in their 30s with two children of school-going age. "They both work and live in a home they own jointly with a sizeable bond," says O'Mahony. "Their joint monthly income meets their living expenses, but they don't have much room for saving."