HomeRetirementRetirement PlanningFinancial planning myths busted

Financial planning myths busted

Visiting a financial planner is about as appealing as a trip to the dentist and it’s easy to come up with reasons not to bother. However, as it’s Financial Planning week, we thought we should try and convince you otherwise.

Reason 1 – I don’t have enough in savings to worry about seeing a planner.
It may seem as though the less you have, the less you need to see a financial planner, but nothing could be further from the truth. Getting your money, however little you have, to work most effectively is the first step in easing your financial strain in retirement.

Reason 2 – None of them can be trusted
Ok, so the financial planning industry is suffering from a reputation bashing, and rightly so. However, you can’t tar all planners with the same brush. Although it may take a bit of time and a few face-to-face meetings, it’s worth sticking with the search to find a planner who understands your needs and can meet them.

Reason 3 – Planners charge too much
Of course you will be required to pay a fee for financial advice, but you need to think of it in terms of the possible return on investment. The first appointment should be free. During this meeting any applicable fees should be stated. Fees can vary greatly between planners, so it’s worth asking up front what you can expect to pay. And bear in mind that you can actually negotiate on the fees quoted. If you decide to go ahead with the planner’s advice, they are required to provide a Statement of Advice. As a guide, simple advice should cost between $200 and $700, whereas more complex financial affairs might mean a cost of anywhere between $2000 and $4000 as an upfront fee.

Reason 4 – I’m capable of managing my own money
While no one can dispute your ability to manage your own financial affairs, it’s worth noting that you don’t know what you don’t know. Legislation and rules are constantly changing and taxation is extremely complex. Failing to keep on top of such changes could end up costing you a lot of money.

Reason 5 – I’m in retirement so there’s little point in changing my plans now
Nothing could be further from the truth. Once you have spent a few years in retirement, you should be more aware at just how difficult it is to fund a modest or comfortable lifestyle. Simply sticking to a plan long-term does not make it work; you should review your plan every couple of years to ensure your money is working as hard as you have.

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