Everyone needs a financial plan but not everyone is ready to commit. To some people, financial planning is about buying a financial product like insurance, share, unit trust, ETF, etc.
Below is an important discussion with Ms. June (not her real name), age 33 about financial planning.
She is free from debts and her parents are independent living on their own by rental passive income and pension money. She and her hubby living in the double-storey link house which was fully paid off.
As a young working adult seeing her circle of friends and colleagues busy looking to grow their money in an investment product. She too, does not want to left out. Though she admitted she is not a risk- taker and keeping all her money in a fixed deposit.
When asked what do you understand about financial planning and what do you want in life? Her answer is straight to the investment products and wants to make more money. Her perception of financial planning is having an insurance policy and investment. Her past experience after visiting insurance or investment event booth, it will end up the consultant will offer to sell a financial product to her.
Not surprising, after introduce herself the first question she was asking me is ‘what investment do you want to recommend me to grow my money.’
Most people tend to follow what others are doing in their financial decision without recognizing their own money personality which is the most important part in helping them to achieve their future financial goals.
Besides making piecemeal financial decision on their own many have a misconception about financial planning:
Misconception #1: Financial planning is for RICH people
No doubt, the richer or wealthier person has more choices in life. It is the planning that will help everyone to be successful in achieving their financial goals. As saying goes quote: If you fail to plan, you plan to fail. Financial planning is a life process to identify the resources available to you now and the future available resources belong to you versus your life goal needs that you want to achieve. By identifying your financial GAP (shortfall) or have too much money or just enough. You will have clarity in life by a written a holistic plan. It can be served as your life GPS/Waze when you want to achieve the lifestyle that you want to live or enjoy as you go through various stages of your life.
Misconception #2: Financial planning FEE is too expensive
People always perceived financial planning fee as expensive. Remember it is your money and you design the life you want to live on. The fee received by the licensed financial planner is in exchange for time investing to help a client to construct a plan, build personalized strategies based on their life value, and recommend action needed to take in mitigating the risk exposures of their financial decision today to achieve their future financial wellbeing. The client is able to save more by avoiding the consequences of the wrong financial decisions made which will cost more than the fee paid.
Misconception #3: I can DIY my financial plan
Imagine if everyone is good with what they are doing, for example in sport. Why the athletes or sportsmen still need a coach? In this digital world, financial product information are easily accessible. Even in social media those financial bloggers are giving a free opinions on the type of financial product features such as which stock is good to buy, where is market direction moving forward, cryptocurrency, property investment, medical care insurance, etc. Robot advisers, to track your income and expenses using a free App are available too.
Do you know which product is suitable for you? Don’t you agree to ask for a second opinion when the doctor advises you to go for surgery? To find the right product that you need by engaging the licensed financial planner. They will be able to help you to solve the missing jigsaw puzzle in your life in a holistic planning way rather than a piecemeal solution.
Misconception #4: Financial Planner prefer helping people in investing only
Investing is part or parcel of our life to grow our asset value. In fact, to do a better job for the client. Experience and good licensed financial planner besides helping the client grow their investment portfolio they can integrate the financial plan in the area of cash management, insurance protection, retirement planning, children education funding, debts restructuring, tax-saving planning, estate planning, and others.
Looking for a planner that can help you see the bigger picture is important and be able to partner with you and journey together to realize your desired lifestyle through holistic planning.