Are myths overshadowing the benefits of financial advice?

Posted on: 15th June 2022 in Financial Planning

Good advice goes a long way. In our financial lives, it could mean the difference between reaching key milestones and not.

However, it would seem that a large number of people are missing out on the benefits of financial advice due to myths and misinformation.

Research from Hargreaves Lansdown found that half of the people surveyed would not consider professional advice regarding their finances.

We previously looked at how misconceptions around life insurance could play a part in putting people off. After all, with so many voices saying different things online, it can be hard to know which one to listen to and leave you feeling confused.

In this article, we will cut through the noise and dispel some of the biggest myths regarding financial advice to help you make more informed decisions. 

Myths and misconceptions

Unfortunately, misinformation is one of the factors why people are reluctant to take advice. Ultimately, this could have an impact on their financial future.

So, what are the biggest hurdles for people when it comes to taking financial advice? Having the correct information is vital, so here are some of the most common misconceptions people have about financial advice.

The costs are too high

According to the same report by Hargreaves Lansdown, costs seem to be one of the main factors.

Of those who did not think they would ever take advice, 29% said it was because it was too expensive. A further 28% said that a lack of money meant it was not worthwhile.

Unfortunately, the misconceptions around costs could stem from bad experiences with advisers.

Good financial advisers will provide a transparent breakdown of their fee structure upfront. Not only will you clearly understand how much it costs, but you will also know what those fees cover. If you are ever unsure, don’t be afraid to ask.

Generally, fees are charged at a flat rate or as a percentage of your total financial assets. Either way, depending on the type of advice or service you require, the cost could be lower than you think.

For most people, the added peace of mind they get from knowing their finances are taken care of, and they are on the right track is enough to justify the extra costs.

Plus, the value an expert can bring outweighs the cost of their services. Think of taking professional advice as an investment in yourself. 

Sure, you need to spend money in the first place to buy shares. But ultimately, the aim of doing so is to have more money in the long run.

For a detailed insight into adviser fees, visit Money Helper, a UK government-approved website.

I can manage my own finances and save more money

It may seem counterproductive to spend money when you are actively trying to get more of it. 

Some people find it even harder to justify an additional cost when they have access to a never-ending pool of information at their fingertips. Surely you can learn about investments or wealth management online and do it yourselves, right?

While it’s always a good idea to learn more about a subject, we can’t stress enough that all of the research in the world can’t compete with real-world experience.

It’s like a university education. You spend your academic years learning the theoretical side of the subject. Still, it’s not until you get a job in your chosen field that things really click into place.

With a financial adviser, you are getting access to not only their knowledge but also their insight and understanding of complex areas based on years of experience.

There is also the time aspect to consider. Being a financial adviser is a full-time job for a reason. Monitoring the fast-paced market and keeping up with constantly changing legislation is a huge time investment. Most of us simply don’t have the time needed to achieve optimal results.

Financial advice is only for wealthy people

Some advisers only deal with large portfolios. However, that doesn’t mean financial advice is exclusively for those with a high net worth.

Let’s look at a different sector to illustrate this point. 

Some trainers exclusively work with elite athletes. That doesn’t mean working with a trainer is only for the elite. There are plenty of others out there that specialise in general health and fitness. 

The same goes for personal finance advice. Most advisers work with a range of clients with very different needs and goals.

We provide advice to a wide range of clients tailored to their needs. Services are not exclusively for the super-wealthy, so don’t let this common myth put you off.  

Advice is an ongoing cost

Don’t think that once you take advice, you are locked in long-term.

Sometimes, we just need guidance to ensure we are on the right track. For example, when planning for life events, such as making sure you have a comfortable retirement.

Speaking with an expert to help you set up a retirement planning strategy to work towards may be enough. However, some people may prefer to have their investment portfolios managed and pay ongoing costs. Either way, you are not obligated to keep coming back for advice. 

Remember, your financial situation and goals may change, and it’s a good idea to adapt your financial planning accordingly. You can always speak to us later to tweak your strategy and ensure you stay on track.

I can’t trust someone else with my finances

Horror stories of people losing their life savings due to a questionable pension scheme can make you think twice before trusting someone with your money.

However, such stories are largely a thing of the past. Today, the financial services sector is very different to what it was.

Now, we live in a world where news travels fast. Review sites such as Trust Pilot keep companies and individuals accountable. These independent websites make it easy to look into a company before committing.

Standards have also increased significantly. Advisers must be qualified to a high level to be authorised by the country’s financial regulator.

Of course, there is always the chance of losing money when you invest, as returns are not guaranteed. However, by working with a regulated company, you can be sure that the financial product you choose is safe.

Finding the right match

We are all at different financial life stages and have our own unique goals. That’s why it’s essential to find the right adviser that meets our needs.

Remember, when choosing a financial adviser, it’s essential that you do the research and find the right match. Not only should you look out for someone highly qualified and experienced, but you also need to feel confident that your interests come first.

For over 20 years, we have ensured that our clients have access to the best impartial advice and the highest levels of service to enhance their experience.

At Holborn Assets, all our advisers are qualified to the highest standards. With our expert advice and award-winning customer service, you can be sure that you are in safe hands.

To find out how we can help you make the most of your money and grow your wealth, contact us using the form below.