There's very many of misconception about financial planning and how it can help you. Here is a list regarding the top seven myths surrounding financial planning. We hope that by dispelling little of these common myths you can get an improved understanding of financial advisers and how they can assist you to achieving financial prosperity and security.
Myth #1: Only people who have already accumulated wealth and/or assets can look a financial adviser
This is one regarding the biggest myths surrounding seeking professional financial advice. Most people trust that you have knowledge of to have already established you financially prior to a financial planner can help you. Some financial advisers shall only need to work with you whether you have knowledge of some established assets as by advising you on how to allocate this wealth this allows them to be paid. At Financial Spectrum, our financial advisers are fee-for-service, or charge a flat fee instead of earning a commission. This means that they can be can assist you in accumulating wealth through things for example setting up savings plans and budgeting, whereas other advisers will not as they would not earn a commission for this advice. The price of advice at the early stages of your life should be just as great, if not greater than when you have knowledge of already built up your wealth.
Myth #2: Financial Planners just sell their clients managed funds
Many people trust that financial planners just sell managed funds to their clients. This isn't true. Whilst a financial adviser can recommend their clients invest in critical investments as one tool to help grow their wealth, a holistic financial planner shall look at parts for example debt reduction, tax minimisation, property, shares, superannuation, insurance, and cash flow just to name a few. All of these parts are important when seeing to grow and secure wealth – not just investing into products. Some financial advisers hold a greater emphasis on placing their clients compare holiday insurance as this gives them with payment via a commission. This perhaps shall explain howcome this myth is an usual one. Not all financial advisers are equal however. Financial Spectrum is within the minority when it returns to offering clients truly holistic advice. Due to the fact that Financial Spectrum does not earn commissions, its' financial advisers location just as many emphasis on parts for example paying fewer tax and budgeting, as placing clients in managed fund investments.
Myth #3: I've already got an accountant, so I do not need a financial planner.
Many people already have an accountant that they have knowledge of and trust for their financial wants so they do not ponder that they should benefit from seeking the services of a financial planner. What most people do not understand however, is that consequently it is very important that accountants and financial planners work together in partnership, most fulfil very different needs. Financial advisers are trained to take a more holistic approach to your finances than accountants are. Whereas an accountant shall done your tax return or release advice for tiny business, a financial planner shall work with you on understanding your life goals and help to implement a financial procedure to help you achieve them.
At Financial Spectrum, we work closely in partnership with accountants to make sure that that our clients receive the benefit of a team approach.
Myth #4: I do not need a financial planner – I'm nowhere near close to retirement
A common misconception is that financial planners are only to help retirees or people starting to ponder about retiring. This is very distant from the truth! Whilst it is true that there exists many financial advisory firms whose target market are retirees, at Financial Spectrum we trust the true price of financial advice should be gained by starting early. Most of our clients are younger professionals in their 20s, 30s and 40s who are at the accumulation stage of their lives. We have knowledge of that we are within the minority when it returns to our competitors but we are passionate about helping young Australians get ahead financially. We help our clients to map out the goals they need to achieve within the short, moderate and long term, and work with them to implement a financial procedure to help achieve these goals. Time is your biggest ally when it returns to setting you up financially – so do not wait until you can be in your 50s and 60s to beginning planning for the future! Myth #5: Financial planners charge too many and get hefty kickbacks from businesses they recommend their clients invest in
Financial planners have received very many of bad press over the years and the result is that many Australians hold a very negative view regarding the trustworthiness regarding the financial planning industry. In truth, individuals authorised to give financial advice to people in Australia are bound by strict regulations from the Australian Securities and Investments Commission (ASIC). All remuneration received by implementing a proposed financial procedure should be clearly outlined in a Statement of Advice (SoA) which should be provided to client. This enables transparency within the financial planning process such that you have knowledge of exactly how many your financial adviser should be paid in relation to your financial plan.
At Financial Spectrum, we have gone one step distant and developed a fee-for-service or a fixed fee payment structure such that we do not receive any commissions from any investment product that we recommend to our clients. This means that our clients pay for our advice. We trust that this fee structure helps to protect our clients from potential conflicts of interest. In addition we release a section of packages for our clients to select from such that they can look comfortable that they are getting price for money. Myth #6: All financial advisers are the same. Should not I just look the adviser at my bank branch?
There are financial advisers, and then there exists financial advisers. Whilst it's true that all financial planners in Australia should be authorised below a financial planning licence from ASIC, it is important to have knowledge of that there exists potential conflicts of interest that shall arise by seeking the services of a financial adviser who is connected to a large institution – be that a bank or other financial institution. Why? Financial advisers who are component of financial institutions who release their own financial products (eg. life insurance and investments) shall likely be restricted to a tiny selection of products that they can release their clients. This means that whether you went to Bank XYZ seeking advice and the financial planner at Bank XYZ identified that you need income protection – it is likely that they will be restricted by the XYZ Bank to only give you with advice to obtain an XYZ Income Protection policy. The difficulty is that your XYZ financial adviser may have knowledge of that an improved policy for your situation should be provided to you by ABC Life Insurance, but due to the fact that they can be component regarding the XYZ institution, they can not release this policy to you.
The good news is that not all financial advisers in Australia are component of large corporations and that is why are better can give you with a wider selection of investment and insurance products from a section of providers in Australia. These financial advisers tend to be known as "boutique" or "privately-owned" financial planning firms as ASIC restricts the use regarding the phrase "independent". These tiny boutique financial advisory firms are within the minority as many have been bought out by the larger institutions and not ever have the massive monetary resources of their competitors, but they can be out there and can release you good financial advice. Financial Spectrum is one such privately-owned financial planning firm based within the Sydney CBD.
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