In a recent study, a majority of Americans are scared to speak with a financial advisor. Almost three quarters, 71%, have reported that they are afraid to talk about their personal finances with these experts. While the survey itself should not be taken with complete accuracy, the figure does suggest a level of discomfort people have when talking about their finances.
But why are people afraid to talk to financial advisors? When we are ill, we often look to doctors to help alleviate the problem. If we are involved in any legal drama, we often consult lawyers. Why should this be any different?
The answer to this is simple. Money is a complicated topic. Whether you are financially stable or financially struggling, the mere idea of opening up to a stranger about your financial status can be quite intimidating. Even if you know the person, money, in itself, is a very personal subject. Regardless of how personal money is, this should not deter you from seeking professional advice from a financial advisor. A financial advisor’s job is to merely guide their clients with various strategies for investing and savings. Typically, they provide their clients and customers with financial products and services so that they can create optimal financial plans and investments for their client’s futures.
Below, you will find five of the biggest misconceptions people have about financial advisors. I wanted to make sure that I am able to clarify any of those fallacies so that you can make the most appropriate decision in further bettering your financial future.
1. This is a stranger! How can I trust a stranger with my money?
One of the most common misconceptions people have is that you are involving a stranger into something that is incredibly personal. While this person is a stranger, you need to keep in mind that the individual is also a trained expert and licensed professional. To learn more about the individual, take a look at their website. Do your homework. Spend some time learning about the financial advisor’s firm, their business practice, and overall success. Look to see they have the appropriate licensing and overall experience. In addition, look to see if that specific financial advisor has a personal or professional site. This will give you a stronger window of learning more about the person you are working with.
2. I Have Made Poor Financial Decisions
Another misconception we often hear is that people are too embarrassed to discuss certain financial slip-ups they had in the past. While knowing a person’s financial history is important, it should not be the sole factor of refusing professional help. The best way to move on from this is to learn from your mistakes. Financial advisors are trained and certified to view your financial profile holistically and to educate and guide you in the best possible way. Take those embarrassing mistakes and learn from them. See what you and your advisor can do to leverage those flaws to optimize them in the best possible way.
3. Financial Advisors are for the 1%
Oftentimes, people are intimidated solely from their annual salary. Keep in mind that financial advisors aren’t just for the rich. Do not feel intimidated to approach a professional of how to optimize and leverage your assets. Just because you are accumulating a certain amount now does not mean you can’t make more through strategic investments. If, however, the cost is prohibiting you from seeking help, try looking at lower packages. In addition, looking for a financial advisor is an overall investment. You are better off investing in an expert than making costly mistakes by yourself.
4. Finances are Personal Issues
This is probably the most common issue people have when avoiding a financial advisor. Money, as stated before, is a very complicated entity. It is incredibly personal and oftentimes uncomfortable to talk about. So why talk to a complete stranger when you can’t even talk to your family about it? The reason why is that these are experts in their field. They have seen success and have seen failure and know best way to optimize your finances during this journey. Do not be fooled that you can just avoid talking about the subject. Knowing where your finances are going will be a huge attribute in growing your future. Talk about it. Internalize it. Be aware of it.
5. I Have Savings. What Can They Do For Me?
As much as it is important to save, it is also important for you to diversify your profile. The more engaged you are with your money, the stronger you are at making decisions for you future. Look at new ventures. I cannot promise you they will always work out, but they will give you a better insight in how to play with your money. In addition, savings is very different from investing. A financial advisor wants to grow your money. They are looking for greater strides in your future. Sometimes you need to take that risk if you want something bigger than yourself.