Financial Planning: Myths and Misconceptions

In this article we are going to be discussing financial planning myths and misconceptions. Many people understand what a professional, regulated financial advisor does and the benefits of speaking to one. But at the same time, there are many myths and misconceptions surrounding financial planning, which often put people off getting advice themselves.

We wanted to explore some of the most common myths we hear around this issue and debunk them one by one, so you can be confident that financial planning shouldn’t just be something for other people to think about.

“I thought I was capable of managing my own money”

The first phrase i hear time and time again from clients is “I thought i was capable of managing my own money”.

Many of us are used to looking after our finances and making decisions about our money, and may not have particularly complex financial arrangements to worry about.

But do you really know everything there is to know about, for example, your tax arrangements, inheritance planning, your insurance needs, is your emergency fund sufficient and if you’re saving enough into your pension?

After all, each one of these is a complicated area in itself, so there’s a good chance you’re missing ways to make your money work harder for you and to achieve your long-term financial goals.

Even if you do feel confident that you’re on top of every area of your finances, it still wouldn’t hurt to get a second opinion. A qualified specialist like one of the Chartered advisors at Howard Wright casting an objective eye over your arrangements, and potentially suggesting options that you may have not considerd – what have you got to lose?

“I’m too young to need financial advice”

Another phrase we hear time and time again is “I’m too young to need financial advice” I will now explain why so many people think this is the case.

It’s true to say that younger people generally have fewer assets and a smaller income, so it’s easy to see why this myth has gained traction.

But in fact, the sooner you get your finances in order and start getting into good habits, the better off you’ll be in the long run.

Wouldn’t it be nice to avoid feeling that pang of regret in later life that you could have done something different if only you’d known? You can avoid that when it comes to your money by speaking to a financial advisor and taking advantage of something called compound interest, every retirement plans best friend.

“Financial Advice is Only for Rich People”

Another misconception we hear time and time again is financial advice is for rich people, many people believe only the super-wealthy need financial advice, but that’s not true. Even people on a modest income will have similar goals to the richest people in society, such as buying a property, putting a child through university, protecting your family should the worst happen and having a good income in retirement, so getting financial advice can make a world of difference regardless the level of your wealth.

At the same time, it could actually put you in a stronger position to be one of those wealthy people in the future, as a financial advisor it’s our job to recommend options that can set you on course to build up your wealth over time and achieve a higher net worth.

“Getting financial advice is too expensive”

Whilst on this theme of question another phrase we hear over and over again is “Getting financial advice is too expensive” It’s often said that financial advice is prohibitively expensive. But if we put you on the spot, could you actually say how much it costs?

If you can’t, perhaps it’s worth looking at the facts, rather than listening to your feelings and you’ll soon find that financial advisors can offer great value, both in terms of the cost of the service itself and the rewards and peace of mind that you can enjoy as a result.

I hope I’ve managed to dispel a few mistaken beliefs around financial advice, as we don’t want you to miss out on the benefits it can offer.