Did you know that there are approximately 765 long term investment funds for individuals to choose from? That's quite daunting, especially if you're starting your investment journey. This is why it's vital that you speak to an independent (this is critical) adviser who can research funds from a broad range of possibilities and propose those that align with your personal financial needs best.

It's also recommended that long-term investments are reviewed annually, so maintaining a relationship with them over time should help ensure that your choices are analysed appropriately.

Choosing the correct investment vehicle to suit you

Which investment product is right for you? Investment products such as retirement annuities, preservation funds, pension funds, provident funds and endowment policies all have built-in tax benefits; however, you must adhere to certain legislative restrictions. For example, a retirement annuity offers favourable tax breaks, but you can only access the funds when you reach 55 years of age. In addition, only one-third of the total amount can be withdrawn as a lump sum at retirement with the first R500 000 being tax-free, according to current legislation. The remaining two-thirds need to be put into a vehicle that can provide you with a retirement income, such as a living annuity or a life annuity.

Some of the effects of your choice of investment vehicle aren't always clear. With regular changes in legislation taking place, even the most seasoned investors require the skills of an independent financial adviser to explain every detail of investment vehicles comprehensively to make sure it's right for you.

Battling behavioural biases and emotional triggers

It can sometimes be challenging to keep a level head when it comes to investing. Market underperformance in the short term can cause investors to make irrational, impulsive decisions and switch funds which unfortunately can lock in losses. This is known as behavioural bias, e.g. favouring recent performance over the long-term performance or reacting fearfully after a significant decline. If they had 'weathered the storm', it's possible market volatility would stabilise, and they would profit over the long term on their investment.

It cannot be denied that an independent adviser is subject to the same biases as an investor. Still, a reputable adviser is aware of their biases and can coach a client through turbulent times. It's important to remember that as a long-term investor, time can be your best friend; you'll reap the rewards of compound interest.

Listening to an independent financial adviser: A disciplined investment process

A good independent financial adviser can assist you in drawing up a robust, feasible financial plan to be followed with discipline over the long term. A large part of an IFA's value is found in helping their clients to be systematic about managing their finances as well as making and acting on investment decisions that will benefit them over time.

Independent financial advisers have the freedom to search for the investment vehicle(s) that suit your financial requirements over the long term. They give investors clarity surrounding the complexity of the available products and, therefore, better equip investors to react (or not) when variables such as changes to legislation change.