nursery rhyme about the old woman who lived in shoe, with
so many children, she didnt know what to do, may cast
an image of our real socio-cultural economic predicament,
in light of Inter-American Development Bank statistics. They
say the percentage of population over the age of 60 would
grow from ten per cent in 2000 to some 24 per cent by 2025.
Picture this: 24 per cent of population will have to live
on a fixed income; recent food prices reflect an 18 per cent
increase; inflation is up from below four per cent, to 5.9
per cent currently, and the average discount rate on T-Bills
is 4.9 per cent. In addition, single working mothers leave
many a child in the hands of grandmothers and aunts.
Those persons who will retire within the next five years are
especially at risk in this economic scenario.
The irony is that much of the savings and gratuity lump sums
of many retirees will be devoured by women, expensive homes,
and fast cars!
Of course, the expensive homes are really nursing homes, and
retirement homes, the women, are the home-care nurses, and
fast cars: the ambulance, air or land.
How then can you think of conservation and preservation of
wealth, when you may have to sell off the very assets of the
estate, in order to pay those expensive bills?
Perhaps the most important step you can make in deciding what
to do, is the selection of a financial planner or consultant.
Because the sharks are out there, and they prey upon the innocent
and the old, you must be very selective in this choice!
While the best plans should begin early in your life cycle,
it is never too late to plan anew. A good financial planner
will begin a methodical process with you.
The process always begins with a broad discussion of the issues
that are important to the clients, health and otherwise, and
some time horizons, without being too specific.
Never be hurry to expose your assets and liabilities to persons
who come to you to offer financial planning advice. Those
persons must first gain your trust. You have every right to
inquire into their credibility before you get down to business.
Remember that greed is a very human characteristic!
A general guide to use in selecting a financial planner is
to inquire into the persons membership in the professional
associations related to the financial planning vocation. Members
of such associations are guided by a code of conduct, and
tend to be subject to reprimand or expulsion from the association,
for unethical conduct.
In fact, the Trinidad and Tobago Association of Insurance
and Financial Advisers is the local association that has set
an agenda to lobby for the necessary legislation to remedy
any unethical conduct that may exist in the industry.
This body is also member to a larger Caribbean Association,
Caraifa: the Caribbean Association of Insurance and Financial
Advisers, headquartered in Jamaica. Both associations have
partnerships with the Million Dollar Round Table, which is
the premiere Association of Insurance and Financial Advisers.
They are all guided by an institutionalised code of conduct.
Their members tend to be more trustworthy, and are held accountable
for efficient planning of wealth accumulation and conservation
To be fair, in the scheme of things, unethical advisers are
not the only threat. An issue in our culture, which often
raises its ugly head, is the women, who also prey upon the
wealth of the innocent and the oldnot confined to nurses,
homes and carswho can devour wealth like blight!
An independent advisor is all the more necessary!
To be continued next week.
n Raziah Ahmed is a Registered Financial Consultant.