The first week of October is Financial Planning Week and the first Wednesday in October is International Financial Planning Day.  In preparation, the global Financial Planning Standards Board commissioned Australian boutique research firm MYMAVINS to undertake research on the value of financial planning.

The research was audacious in that it was the first of its kind at scale. The online survey involved over 15,000 participants across 15 different countries. The perceptions and experiences of unadvised people were compared with people who have an active relationship with a financial planner. 

Along the way three common misconceptions about financial planning amongst the unadvised were uncovered.

Myth #1: Financial planning is only for the rich

One of the most common cited reasons people give for why they don’t access financial planning services is a perception that they don’t have enough money, or enough complexity in their finances.

But everyone has complexity in their lives and people benefit from professional advice regardless of their wealth.  They enjoy a higher quality of life, are more confident with their finances and are more satisfied with their wealth. 

In Australia, three in four clients earning $120,000 or less per year who work with a financial planner feel financially secure, which is higher than unadvised consumers on the same level of income.

Myth #2: Financial planning is only needed at retirement

Another common misconception about financial planning is that it is needed only at retirement. While Financial planning can solve the retirement conundrum “how much can I spend today and still be responsible for the future?”, it pays to start earlier.

In the study nine in 10 Gen Ys who work with the financial planner agreed that it has left them better off financially.

Myth #3: Financial planning cost more than it’s worth

The third myth uncovered involves perceived value. Do the intangible and tangible benefits of advice outweigh the tangible and intangible costs?

Well, the evidence from this study is that for most people there is value in financial planning services. Four in five clients of financial planners say the benefits of financial planning outweigh the costs.

At When Financial Solutions the findings of this study do not surprise us.  We see the transformational positive impact of financial planning every day.  The fact is when clients have higher financial well-being, it tends to improve other areas of life.  The result?  We enjoy higher emotional and physical well-being and higher quality of life, generally. 

It’s not a matter of ‘if’ but ‘when’.

This article is general and does not consider your personal circumstances so it may not be appropriate to you.  If you would like advice specific to you, please let us know.