What is holding you back from speaking to a financial planner? Let me bust some of the myths people have, that stop them making that call.
8 financial planning myths
Myth 1: Financial Planning is too expensive.
Please don’t miss out on the benefits of planning because you believe it’s too expensive.
The question to ask is ‘Are you getting value for money?’ which is the driver of any successful arrangement. Like any professional service provider, financial advisers charge for their services but their objective is to get you to a financially better position than you were before.
Think of a financial adviser’s services as an investment instead of an expense. Financial advisers can help you improve your cash flow through responsible budgeting, protect you against ill health or death, mitigate tax liabilities, increasing your investment returns, or even helping you avoid costly financial mistakes.
It’s important to not only understand the charges your adviser will make, but also the value they add. Taken as a whole, the value of the planning process far outweighs the cost of the service.
Many who have worked with financial advisers would say that ‘peace of mind’ was the leading benefit. What price would you place on that?
Myth 2: I need to have a certain amount of wealth to work with a financial adviser.
While it is true some advisers focus on customers with a certain amount of funds available, many advisers work with customers at all levels of income and assets.
An adviser’s expertise and technical knowledge can bring value to those with more modest funds to invest, especially when it comes to more complicated matters. Because advisers tailor their advice to your specific situation, you can benefit no matter where you fall on the wealth scale.
Remember; Wealthy people are often wealthy precisely because they planned for it. It’s not what you’ve got it’s how you use it. They will have achieved their wealth with careful planning and diligent savings.
Financial planning is beneficial for everyone, because it helps you balance living for today with preparing for the future.
Myth 3: I will lose control of my finances.
In the end, a financial adviser doesn’t make the final decision. They are there simply to advise you.
The best financial advisers will give you recommendations based on product and investment knowledge, research, and economic trends, but it is ultimately in your court to decide whether to proceed with the recommended advice.
Myth 4: I don’t need a financial planner.
You may have a level of knowledge and keen ability to manage your finances, but there is no denying that the world of finances changes daily and maintaining that knowledge is a full time job. A trained and qualified financial adviser can help you navigate your objectives in ways that keep you protected and they will be aware of the latest updates and changes in regulations, market fluctuations, and economic impacts.
If you have financial goals of any kind (retirement planning, university education, savings), then you’re a good candidate for financial planning.
Myth 5: I will inherit from my parents (or other relatives) so I don’t have to worry about a financial plan
You may be hoping/expecting to receive an inheritance, but it doesn’t mean you don’t need a financial plan. After all, it’s unlikely that you know with 100% certainty that:-
- Your inheritance won’t be spent on later life care costs
- When you will get your inheritance
- How much you’ll be receiving.
If you do anticipate an inheritance, we help establish a solid plan based on where you are now and what they can control, so you’re never caught unprepared.
Myth 6: I don’t need a financial planner, until later in life.
Its always better to plan early. The earlier the better. The longer you wait, the harder you’ll have to work and the more you’ll have to save.
We can make many plans for our future, and life will always throw us a curveball. So, the earlier you start working with a financial adviser, the better your chances of reaching your goals. Especially for retirement planning, it’s never too early to understand your options and start making decisions.
Without a plan, how can you even be sure when you can retire?
Do you know what you’ll need to cover your basic expenses and where those funds are coming from?
Do you know if you can afford to take up a new hobby, travel more, or pay off your mortgage?
Do you know when the best time is to start drawing your pension funds?
Do you know how to structure your finances for optimum tax efficiency?
How do you know you won’t outlive your money?
A financial planner can help you with all of this.
Myth 7: A financial adviser will talk in terms beyond my understanding
When you are seeking advice on anything in life it is assumed that you don’t know as much as you would like too. You couldn’t possibly know all of the financial jargon or industry terminology that financial advisers speak every day. However, a good financial planner will look to impart what they know and build your knowledge to give you more confidence. They won’t give advice until they have listed and understood your goals. Ultimately, the success of a financial planner comes from helping you become successful.
Myth 8: Once you have a Financial Plan in Place, You’re Set
Hmmm not quite. Your circumstances, your financial situation, financial markets, fund managers, products, tax legislation are all subject to change and therefore so too is your plan. It is so important to review it on a regular basis to ensure it remains fit for purpose. We believe once a year is sufficient.
Photo by Visual Stories || Micheile on Unsplash
