Busting the myths surrounding financial advice
A few myths and facts about financial advice:
Myth: I don't have enough money to invest.
Fact: You don't need a large lump sum to invest or a high disposable income.
Everyone, regardless of their income or how many savings they have, can benefit from visiting a financial planner. You don't need to be a high-net-worth individual to reap the rewards of advice. Financial planners can help with everything from budgeting and debt management, through to superannuation and retirement planning.
Myth: It's only for people who are close to retirement.
Fact: It's never too early to seek advice. Many people don't think it's necessary to visit a financial planner until they're approaching retirement. While it's never too late to seek advice, it's also never too early. Young people who are just starting their working life can benefit greatly from financial advice. People who establish good money habits early on are less likely to develop financial problems later in life. Also, the earlier a person starts building wealth, the better. For instance, salary sacrificing into super from a young age can dramatically boost a person's nest egg due to the effects of compound interest.
Myth: I don't need it and I don't have the time.
Fact: It's one of the most important things you can do. Money issues are often delegated to the "too-hard basket", but there can be devastating consequences if people bury their heads in the sand. Most Australians don't have adequate insurance to protect their loved ones in the event of loss of income. The big four are life insurance, income protection, total and permanent disability insurance (TPD) and trauma insurance. It's also vital to have a will to ensure the right funds end up in the right hands at the right time, and an enduring power of attorney to look after your affairs if you're incapable. People with kids also need to consider guardianship.
Myth: I won't get independent advice.
Fact: It's all about choosing the right planner. It's important for people to take the time to find someone they trust. Look for a licensed planner who does not receive up-front commissions on super, managed funds or retirement products. Look for a planner who charges a fair fee for the advice process and a modest fee for implementation. Ask for recommendations from friends, colleagues and family, or contact the Financial Planning Association for a referral. Finances are very personal, so people need to look for someone who understands them and their situation.
Daniel Spry is an authorised representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.