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MOST South Africans are scrupulous about regular servicing when it comes
to vehicle maintenance - but forget to do the same for their finances.
This is according to Lara Warburton, managing director of Imara Asset Management South Africa, who laments the fact that portfolio maintenance is often ignored until there is a crash or breakdown.
Says Warburton: “A R400 000 car gets a regular tune-up, but a R4m portfolio or retirement savings plan gets no attention ‘until the wheels come off’.
“However, regular financial planning check-ups are essential if a client hopes to achieve optimum performance.
Breakdowns in your financial planning can be avoided by carrying out a thorough portfolio tune-up when you send your car in for its annual 20 000km or 30 000km service.
Warburton suggests sticking notes into your service manual at 20 000km or 30 000km intervals as a reminder that you, as the proud owner of a portfolio, also have an obligation to check the inner workings of your financial plan.
Warburton says similar reminders can be entered into an office diary about the time of an annual physical or mammogram.
She points out: “Mechanics educate their clients about the need for preventive maintenance with a classic one-liner: You can pay me now or you can pay me later.
“Things break down eventually and fixing the problem after the engine seizes is always more expensive than keeping everything in working order.
"Similar logic applies with financial vehicles, but clients tend to let things ride until a plan comes to a juddering halt.”
Pamper your retirement plan
Difficulties are compounded when retirement planning vehicles are involved, as major problems in the last few years before retirement are tough to fix.
“Annual retirement readiness checks are critically important,” says Warburton. “A plan may have received no attention in 10 years.
"Wheeling it in for a look-see weeks before retirement is no way to look after a vehicle that has to run efficiently for another 20 years, perhaps more.
“Look after your retirement vehicles and savings plans according to a regular maintenance schedule – just like your car – and you avoid unpleasant shocks.
“The only reminder that works for a scrupulous car owner may be to flag the service manual for a financial tune-up when the family car goes in for an annual service.”
This is according to Lara Warburton, managing director of Imara Asset Management South Africa, who laments the fact that portfolio maintenance is often ignored until there is a crash or breakdown.
Says Warburton: “A R400 000 car gets a regular tune-up, but a R4m portfolio or retirement savings plan gets no attention ‘until the wheels come off’.
“However, regular financial planning check-ups are essential if a client hopes to achieve optimum performance.
Breakdowns in your financial planning can be avoided by carrying out a thorough portfolio tune-up when you send your car in for its annual 20 000km or 30 000km service.
Warburton suggests sticking notes into your service manual at 20 000km or 30 000km intervals as a reminder that you, as the proud owner of a portfolio, also have an obligation to check the inner workings of your financial plan.
Warburton says similar reminders can be entered into an office diary about the time of an annual physical or mammogram.
She points out: “Mechanics educate their clients about the need for preventive maintenance with a classic one-liner: You can pay me now or you can pay me later.
“Things break down eventually and fixing the problem after the engine seizes is always more expensive than keeping everything in working order.
"Similar logic applies with financial vehicles, but clients tend to let things ride until a plan comes to a juddering halt.”
Pamper your retirement plan
Difficulties are compounded when retirement planning vehicles are involved, as major problems in the last few years before retirement are tough to fix.
“Annual retirement readiness checks are critically important,” says Warburton. “A plan may have received no attention in 10 years.
"Wheeling it in for a look-see weeks before retirement is no way to look after a vehicle that has to run efficiently for another 20 years, perhaps more.
“Look after your retirement vehicles and savings plans according to a regular maintenance schedule – just like your car – and you avoid unpleasant shocks.
“The only reminder that works for a scrupulous car owner may be to flag the service manual for a financial tune-up when the family car goes in for an annual service.”
