The Myths of Financial Planning

According to the ASIC, only 4 in 10 Australian adults seek financial planning support[i] which is surprising considering that only 53% of couples and 19% of single people are on track to achieving their financial goals.[ii]

So why are more people not lining up to get support?

There are many myths about what a financial planner does and how they help individuals. When making decisions about your financial future it is important that you know the entire story so you are able to make informed choices based on facts and not misconceptions.

Myth 1: Financial Planning is only for the rich.

The idea that financial planning is only for the rich is one of the biggest myths about the financial planning industry and is not right. Regardless of age, life stage or income size, anyone with a desire to protect their loved ones and the motivation to live their best life possible can benefit from financial advice. The size of your income does not have to affect the size of your dream. Our Financial Planners work with you to develop strategies specific to your situation to allow you to achieve your financial goals no matter how big or small.

Myth 2: Advice is generic, it won’t necessarily be right for me

For a Financial Planner, one of the most important parts of the financial planning process is getting to know and understand you. This then allows us to tailor and customise the financial advice to suit your situation and help you achieve your financial goals and dreams.

The popular belief that Financial Planners simply want to sell products and don’t care about the outcome is yet another myth. The main aim for our Financial Planners is to help as many people as they can achieve their goals and dreams. We are highly outcome focused and any recommendations we make will be based on what we think is best for you.

According to financial Planner Chris Ogilvie, “Truly understanding what a client’s needs, hopes and dreams are, then providing strategies and implementing solutions to make it all possible is what financial planning is all about.”[iii]

Financial Planning is all about achieving the best results possible for you.

Myth 3: It is risky to put your financial future in someone else’s hands

Another frequent misconception is that ‘it is risky to put your financial future in someone else’s hands.’ A Financial Planner is not just ‘someone else’. The Financial Planning industry is in a highly regulated industry and all our Financial Planners well and truly meet the industry standard.We have routine compliance and audit procedures in place to ensure all our clients get the best advice.

The results speak for themselves: we have an Industry Adviser Trust Score TM on par with the top performing practices. All of our Planners who meet the length of service requirements are qualified “Most Trusted Advisers” by the Beddoes Institute, a highly regarded independent benchmarking research body.

All advice you receive is from experts whose job it is to stay on top of current information and the market. Our primary role is to support and challenge you to make sure you are making the best decisions possible for you because, at the end of the day, any decision to be made is up to you. All we do is provide our best recommendations, and importantly, we work as a team to ensure the final strategy is best for you.

As Financial Adviser Garry Alt says, “Investing without a financial plan is like driving across the country. without a map.”[iv]

A Financial Planner is there to guide you not ‘drive the car.’ They are someone who you can turn to seek solid advice to ensure you are heading in the right direction to achieve your financial goals.

Myth 4: I don’t need a Financial Planner I can look after my own finances

It is true that anyone can look after their own financial future, but do you have the time to make it a priority and develop a strong knowledge of the industry?

Many people who seek the support of a financial planner have the aptitude to look after the majority of their financial affairs, but few have the time or the complete and current understanding.

To do a great job looking after your financial future, you need to dedicate a lot of time to staying on top of markets, legislation, and product offerings. You also need to maintain an objective approach – keep your emotions out of the decision-making process. That is where most people let themselves down in the long run. Working with a Financial Planner means you grow your team, get support and free up your own time.

Myth 5: I have tonnes of time to sort this stuff out

Finally, we come to the misconception that you have tonnes of time to ‘sort this stuff out.’ Retirement seems like a lifetime away…The reality of this myth is that there are important financial strategies that are not just about retirement. They can support the purchase of a first home, a family home, education or career change. The fact is the earlier you start the easier it is to clear the path towards what is most important to you. Any action early on can have a significant impact on your future life. According to research conducted by the Financial Services Council, one in five families will be impacted by the death of a parent, a serious accident or illness that renders a parent unable to work and only 5%[v] of families have adequate levels of insurance cover to maintain their lifestyle in the event of an accident. The sooner you have someone else looking out for you and working with you, the more likely you will be to make wiser more informed decisions as you move through life.

Don’t let the myths about financial planning stop you achieving your dream. To get the most out of your finances speak to a financial adviser whose job it is to do all the research and planning, freeing up your most valuable resource, your time, so you can do the things you love.

What you need to know

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, Invest Blue Pty Ltd and its subsidiaries operating as Invest Blue, 1300 346 837 and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Please contact us if you want more information.

[i] Access to financial advice in Australia. (2010). 1st ed. [ebook] ASIC, p.14. Available at: http://asic.gov.au/regulatory-resources/find-a-document/reports/rep-224-access-to-financial-advice-in-australia/

[ii] Burnett, J., Davis, K., Murawski, C., Wilkins, R. and Wilkinson, N. (2014). Measuring Adequacy of Retirement Savings. 1st ed. [ebook] Melbourne: University of Melbourne. Available at: http://www.melbourneinstitute.com/downloads/working_paper_series/wp2014n05.pdf.

[iii] Ogilvie, C. (2015). Invest Blue Directors. [online] Invest Blue – It’s possible. Available at: https://www.investblue.com.au/teams/invest-blue-directors/ [Accessed 19 Aug. 2016].

[iv] Goldstein, C. (2016). Financial advisers aren’t just for the rich. [online] MarketWatch. Available at: http://www.marketwatch.com/story/financial-advisers-arent-just-for-the-rich-2014-05-05 [Accessed 19 Aug. 2016].

[v] Kelly, S. and Ngu Vu, Q. (2010). THE LIFEWISE / NATSEM UNDERINSURANCE REPORT – Understanding the social and economic cost of underinsurance. 1st ed. [ebook] Lifewise, p.2. Available at: http://www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0203_LifewiseNATSEMSummaryA4FINAL.pdf [Accessed 19 Aug. 2016].