I received an interesting reply to my post “Should you Hire A Professional Anyone?”, as follows:
“This is very interesting. Something that I have observed (so completely anecdotal) the ones most reluctant to seek advice regarding financial matters are those that are "just qualified enough" to do an okay job of managing.
They have a level of competency that makes it feel defeatist or indulgent to hand over the task....but on the other hand, their success means they are time poor and can't see the level of stress it is putting on them to manage the finances effectively.
They are also constantly burdened with knowing they have the skill/knowledge but are not giving the attention required to make the most of their financial situation.”
Which got me wondering about why more don’t seek professional financial advice.
Cost?
Qualifications?
Being ripped off?
Inertia?
In fairness there is not much to be done about inertia, people are either motivated to do something or they’re not. Head in the sand is a perfectly reasonable strategy until the day it isn’t.
Who knows they might get lucky with their finances, like those 20 a day smokers who never have any health issues. Of course, they are actually as rare as hen’s teeth compared to those that end up enduring a miserable existence because of their habit. I digress.
Costs? In this day and age, with virtual meetings and automation etc. quality financial planning advice can be delivered to suit just about anybody’s budget. I know that because we do that.
Qualifications? Like accountants and solicitors anyone giving financial advice has to be qualified to do so. It’s a (minimum) 6 exam process, probably taking the best part of two years if you get your head down and it’s topped up with a minimum of 35 hours of continual professional development (solicitors are required to do 16 hours and accountants between 5 and 30 depending). Personally, I do something like 200 hours a year and have more exam passes than I can count.
Being ripped off? Financial planners and advisers can no longer be paid commission, all our fees come from you personally or from a product, but with your agreement. Gone are the days where different products paid different commissions and/or commissions were hidden. This leaves very little incentive to do anything exotic. Also, all the standard products (pensions, investment ISAs and investment accounts) are “clean” with no entry or exit fees or hidden conditions or charges. Investment losses can still occur but getting wiped out is highly unlikely to happen.
So perhaps the reply above is pertinent? A little knowledge is a dangerous thing?
What are your thoughts?