The Yin and Yang of Financial Planning
Balancing Risk Insurance and Investments
In the world of financial planning, two powerful forces work in harmony to create long-term security and prosperity for your clients: Risk Insurance and Investments.
Like Yin and Yang, these two elements are opposite yet complementary. One protects. The other grows. One prepares for the “what ifs.” The other builds for the “what could be.” Together, they provide balance—ensuring that your clients’ financial plans are not only ambitious, but also resilient.
Why the Balance Matters
Too often, we see clients who are well-insured—but not building wealth. The other, less common scenario, is when clients have an impressive investment portfolio—but no safety net. Both extremes expose major risks.
We are trying to assist IFA’s across South Africa get this balance right.
At ICON, we have found the former scenario to be more common due to these reasons:
Risk cover is an emotive, easier sell.
Advisers (and regulation) seems to be more focused on the risk of not having enough cover, rather than not having enough investments.
Clients tend to grip on to lump sum insurances rather than decreasing as their debt or dependent needs fall away.
This has a few knock-on effects for retirement savings
Clients become fearful of the “what ifs”; holding onto the cover, rather than taking practical steps to change their allocations.
Large risk insurance premiums deplete share of wallet that should be used for investments.
Later in life, clients are left in a conundrum where they have a large lump sum in place for a death or critical illness, but not nearly enough investment funds. This makes the entire financial plan hinged on one spouse passing away, or receiving an illness pay-out.
What do the stats say?
Statistically, the two most common financial risks in SA are:
Without strategic investing, even the most comprehensive insurance policies won’t build lasting wealth or legacy. And, without the right protection in place, even the best-laid investment plans can fall apart in the face of an illness, disability, or death.
Risk Insurance: The Protective Yin
Risk insurance provides the foundation of any robust financial plan.
These products protect against the uncertainties of life. They offer peace of mind—and crucially, they protect your client’s ability to continue investing even when life doesn’t go according to plan.
Investments: The Growth-Oriented Yang
Investments do the heavy lifting for long-term goals: funding retirement, education, or leaving a legacy. This is the proactive side of financial planning:
Investments represent confidence in the future—your client saying, “I want to build something greater.”
The Power of Integration
When integrated thoughtfully, insurance and investments support and strengthen each other. A client with income protection can continue contributing to retirement plans during periods of illness. A properly structured life cover policy can fund investment vehicles for beneficiaries, ensuring generational wealth.
Insurance preserves wealth. Investments grow it.
By positioning yourself as a financial adviser who sees the whole picture, you help clients avoid the trap of overcommitting to one side of the yin-yang, and instead guide them toward a plan that works in any season of life.
Final Thoughts
At ICON, we believe that advisers who truly add value are those who help clients manage both risk and opportunity. Please chat to use about how we offer smarter risk and investment solutions for your practice, optimising balance and spend.
