5 Financial Planning myths, and why they aren’t true!
At Ian King Financial Planning, we are always looking for ways to help spread the message about proper financial planning to as many individuals and families as possible. We know that good financial planning can be life changing, but there are far too many misunderstandings that put people off contacting a financial planning professional to start their own journey.
According to a recent survey by Royal London, as many as 9.4 million people are deciding against looking for a financial planner or financial adviser, despite being open to the idea of receiving financial advice. Having gathered views from over 4,000 of their customers, Royal London have identified a number of common misconceptions that are stopping people from seeking advice. Amongst those most common are:
1. “Financial Advice is too expensive for me”
By far the most common misconception amongst respondents, as many as 47% suggested that one of the key reasons they had not sought financial advice was that the cost would simply be too much for them. However, 40% of these respondents actually admitted that they actually did not know how much it would cost them.
In a separate study published in 2019, Royal London found that people who received advice on their pensions and investments between 2001 and 2006 received a £47,706 boost on their overall wealth by 2014/15.
2. “I can look after my own money”
35% of respondents said they didn’t feel the need to take financial advice as they felt that advisers cannot offer them anything that they cannot do for themselves.
Research suggests that individuals who receive financial advice are likely to be better of financially over the long-term and they also feel more informed.
Financial planning and advice can help individuals from all walks of life to better understand their circumstances, both now and what they might look like in the future. Whilst good financial advice can make sure you make the most of your money, for example by making use of tax-efficient allowances, it is often the intangible benefits of a good financial plan that provide individuals with the real value. We feel the value we add is not only in hopefully making our clients wealthier from a monetary perspective, but it is also the comfort of knowing you have enough to continue to lead the life you wish, to achieve your goals and increase your ‘return on life’.
3. “Financial Advice isn’t for someone like me”
One of the most common misconceptions we come across, and one that Royal London suggested 15% of all respondents felt resonated with them, was that they either felt their finances were ‘too simple’, or they feel their net worth is too insignificant to make financial advice worthwhile.
Within Royal London’s separate ‘Revisiting the value of financial advice’ report, they found that a group of investors classed as ‘non-affluent’ enjoyed a 24% boost on the value of their pensions and a 35% increase in their total financial wealth having received financial advice, compared with 11% and 24% in the ‘affluent’ group respectively.
4. ” It isn’t something I’ve put much thought into”
Almost a quarter (22%) of respondents suggested that one of the reasons they had not sought financial advice was simply because they hadn’t given it any thought. It is difficult to think about your financial future with any real conviction, particularly the younger you are, and so taking action is something that many people simply put to the back of their minds.
5. “I don’t like to talk about money”
It is a common stereotype that us Brits do not like talking about money, it’s something of a taboo subject. 17% of all respondents to Royal London’s survey said they were either too proud or too embarrassed to talk to someone about their finances. Even among friends and family, talking about money can be difficult for many people, and so speaking to a financial adviser is a task that is often put off.
However, meeting with a financial planner is not all about discussing how wealthy you are, or how much your assets are worth, or even how much we can potentially grow your wealth. Talking to a financial planner is about much more than that, it’s about discussing your vision for the future, and what you would like to get out of your life. Try to think about your aspirational future as a journey, and your financial assets are simply the vehicle to get you there.
Naturally, your finances will play a role in our discussions, but thinking of your finances as a tool that you can use in order to achieve your goals, whatever they may be, can make an open discussion about your finances much more comfortable. So, if this sounds like you, please don’t hesitate to give us a call for a friendly chat, we would love to help.
Having read this article, any of the points raised by Royal London’s survey resonate with you, and you would like to arrange a friendly, no-obligation chat, please do get in touch using the button below.
Please note that this blog is for information purposes only and does not constitute formal financial advice. The information within this blog is aimed at retail clients only.
