As we know, facts can sometimes ruin good stories at work and in our social life. But myths can be very believable, and we tend to believe a lot of them until they are debunked. After all, they are interesting, entertaining and often comforting.
When it comes to your finances, have you ever avoided financial advice based on a ‘supposed’ fact? It’s important to distinguish fact from fiction, especially when it comes to making informed decisions regarding your financial future. That’s why we’ve debunked the top 3 financial advice myths, which may challenge your prior beliefs and have you reconsidering the value a financial adviser can provide.
MYTH 1: I don’t need a financial adviser, I can look after my own finances.
Australians are more anxious about their finances today than they have been in years. It doesn’t help that we have so many choices available to us and so many things to consider when it comes to our finances. In fact, poor decision-making is one of the top three regrets Australians have when it comes to their finances.i This is where help from an expert can come as a huge relief. Financial advisers can help you understand your own behaviours and biases to aid in better decision-making.
Take investing for example – just one aspect of financial advice. It has been found that investors who have an adviser are more confident (71 per cent versus 55 per cent of DIY investors), have greater knowledge and have a more balanced portfolio.ii
The same rings true for business owners. A study has revealed that 80 per cent of small-to-medium business owners had a better understanding of life insurance as a result of seeing an adviser, and that regular reviews helped them to be better prepared for succession.iii
Given the complexity of the market, and so many rules that seem to change more often than they remain the same, financial advice can offer a potential lifetime partnership with immense value-add.
MYTH 2: Getting financial advice is too expensive.
According to research, you could be thousands of dollars better off when you make choices based on professional financial advice.iv Plus, you’ll take more family holidays, have greater peace of mind and be more confident in your financial decisions.iv
While the cost, or presumed cost, of financial advice may be disconcerting for some, three quarters of Aussies who have received financial advice take the view that it is worth more than it costs.iv This is not to mention the peace of mind it can bring you which some may argue is priceless.*
*Financial advice has brought 80% of Aussies more peace of mind.iv
MYTH 3: I need a lot of wealth to have a financial adviser.
Many Australians only seek and receive advice when their bank balance approaches a few hundred thousand dollars, or as they approach retirement, when in reality they should be seeking advice much earlier in life.v That is, good advice can of course make you wealthier at retirement, but it also adds value all the way through your life with choices regarding schooling, insurance, holidays, housing, personal interests and so much more!
Unfortunately, Australians across the board are hesitant to explore new pockets of potential wealth due to their fear of making a financial misstep. This detail, coupled with the fact that almost half of Australian adults have unmet financial needsvi, highlights the enormous value an adviser can provide in guiding you through every stage of your life.
If you’ve ever been held back by any of these myths, now’s your chance to speak to a financial adviser and get cracking on achieving your life goals and aspirations. Whether you’re after a chat to discuss other financial advice myths you’ve come across, or looking to start ‘living the dream’ with the help of an expert, you can get in touch with us on 1300 850 757, or email us at GBSAU_Admin@ajg.com.au.
i Financial Planning Association of Australia, 2017. Live the Dream Report. Retrieved from http://www.moneyandlife.com.au/wp-content/uploads/2017/08/FPA-Live-the-Dream-2017-Research-Report-FINAL.pdf
ii Legg Mason, 2018. Global Investment Survey 2018. Retrieved from https://www.leggmason.com/content/dam/legg-mason/documents/en/insights-and-education/brochure/global-investment-survey-brochure.pdf
iii MetLife, 2018. Understanding the Adviser-Client Relationship Report 2018. Retrieved from https://www.metlife.com.au/content/dam/metlifecom/au/thoughtleadership/All/Adviser_Client_Relationship_Report_2018.pdf
iv Sunsuper, 2019. Value of Advice Report. Retrieved from https://www.sunsuper.com.au/advisers/value-of-advice
v Roy Morgan, 2018. Professional financial advisors focus on top end. Retrieved from http://www.roymorgan.com/findings/7819-professional-financial-advisors-focus-on-top-end-201812070122
vi Productivity Commission, Draft Report: Competition in the Australian Financial System, 2018. Retrieved from https://www.pc.gov.au/inquiries/current/financial-system/draft/financial-system-draft.pdf
The information and any advice in this article does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. When considering whether to acquire a financial product, before making any decision, you should obtain the relevant product disclosure statement.