Mike Reynolds
Mike Reynolds

Director / Adviser


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Top 6 myths about financial planning

We recently got talking about the reasons why people avoid seeking financial advice. Here are our top six.

1. You can do it yourself

The thousands of DIY financial advice websites prove there’s no end of reasons why you can’t control your finances on your own. These online tools can offer you advice on investments, superannuation and planning for the future, just to name a few. However, the pitfall of this approach is the advice is often very generic in nature and not tailored to your specific situation. Incorrect or vague advice can lead to an uncertain financial future. While there is an abundance of financial planning, investment tools and information available online - including our own financial health check - which are well worth doing, these tools alone won't give people the wisdom and insight to manage their money wisely. A professional financial adviser can call on years of experience and formal education to help you manage your money professionally.

2. It's too early to get advice

This is probably one of the greatest myths amongst those aged between 25 and 50, and often people in this age range put off getting financial advice because they don’t think they’re old enough for it, or they don’t have enough money to justify seeing an adviser.

The bottom line is that financial planning is for everyone – whether you’re only a few years into your first professional job or you’re 25 years into your career and have accumulated a substantial set of assets. Everyone, regardless of income or net worth, has goals and aspirations and in order for these to be met it’s vital that a financial plan is put into practice.

3. You have to sit in a stuffy office and be told where to invest your money

Revealing your financial situation, including your history, to a person you have just met can be understandably daunting. This can be made even more intimidating if you’re sitting in a room with an adviser who is busy trying to sell you investment products you may have little interest in. Find an FPA-certified professional practice so that you can be assured of tailored advice that has your best interests at heart.

4. Financial advice is only for people who are about to retire

We often hear people say, “I’m nowhere near retiring, why do I need financial advice?” The bottom line is that everyone can benefit from financial advice, and more importantly a financial plan. Without one, it can be difficult to achieve both short and long term financial goals. It wasn’t long ago when the life expectancy for men and women was 75 and 80 respectively. Now, statistics reveal Australian men have the third highest life expectancy in the world at 80.5 years of age, with women sitting sixth at 84.6 years of age.

With media reports highlighting increasing numbers of professionals across Australia being made redundant, should this happen to you, will you have enough money to carry you through for the next 30 years? Particularly if the next job you do get as a mature employee requires a significant pay cut from your last role. Early planning is the key to financial freedom when you’re eventually ready for retirement.

5. I’ve already got an accountant, so I don’t need a financial adviser

Most people have an accountant they know well and can trust. However, accountants and financial advisers have two different roles, each fulfilling different financial needs. Accountants complete tax returns and will sometimes offer effective tax management strategies. A financial adviser on the other hand will work with you to implement the best strategies to ensure your wealth is built and managed – leaving you more time for living. FMD advisers partner with a wide range of accountancy firms across Melbourne, Adelaide and Brisbane to ensure clients receive the most effective advice.

6. Financial advisers are all the same

The Royal Commission into the banking and finance sector has raised understandable question marks about the integrity of financial advice. However, all financial advisers are not made equal. When seeking a financial adviser it’s important to do your research.

For a start, it is a good idea to find out if the adviser is licensed under an Australian Financial Services License. You can do this by asking for a copy of their Financial Services Guide (FSG). If they don’t have one, that should be the end of your conversation. If they do, the FSG will inform you of the services they offer, how they charge, and whether they receive additional payments or benefits, who runs the company, and if they have links to product providers and what their qualifications and experiences are. Discovering this information can help you find a good adviser you can trust with your financial affairs.

FMD’s advisers are all members of the Financial Planning Association and most are CFP®, CERTIFIED FINANCIAL PLANNER®, the highest professional qualification an adviser can hold.

Take charge of your financial future

What's different about FMD?

1. Based on goals

At FMD Financial, we work on growing your money to help you achieve your financial and personal goals.

2. Holistic approach

We focus on your health, wealth and happiness through six key areas of personal financial management that make all the different to the lifestyle you can afford at every stage of life.

3. Transparent process

We believe so strongly in our process that we offer a 1-hour free consultation with one of our qualified financial advisers. There's no charge for this meeting because we want to make sure we're right for you and you're right for us.

General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.