Financial Advisor Myths


Financial Advisor Myths


There are a many Financial Advisor myths out there that may prevent you from working with one. These may either come from your self-perceived viewpoint (how you personally feel about Financial Advisors given your own interpretation or impression of them), or a misconception based on external factors such as things you have heard from a close friend who maybe had a bad experience, or that it is better to go at it alone, or maybe that you would prefer a stranger not to handle your hard-earned money.


This would no doubt leave you feeling hesitant about working with a Financial Advisor, but remember, a good Financial Advisor’s objective is help you financially, to understand your needs and put together strategies to help you reach your financial needs and goals.


Nowadays trust is also hard to come by, and because trust is usually earned over time, we thought we’d debunk a few financial advisor myths to help you earn our trust to hopefully change your mind and leave you feeling more confident in engaging with a Financial Advisor.



Myth #1: I need a lot of money to work with a Financial Advisor


Fact: This is not necessarily true. A Financial Advisor can still work with you even if you don’t have many assets. Although your choices may be limited, you can still be assisted on a fee-based/hourly basis with things like budgeting, financial planning, help you set up a monthly Savings Plan and assist with ongoing monitoring and management, understand a workplace retirement plan and assistance with your pension options when moving from job to job.



Myth #2: A Financial Advisor will put all my money into risky stocks


Fact: A good Financial Advisor will never just throw all your money into stocks alone. A good Advisor will always assess your attitude to risk first to determine your risk profile and then make sure that your investment strategy aligns with your long-term goals and objectives. When constructing a portfolio, asset class diversification (Equities, Bonds, Property, etc) is key to smoothing out your returns as one asset class may perform differently to another under certain market conditions, therefore, effectively managing investment risk.



Myth #3: I need an Advisor local to me to meet in the office


Fact: Modern technology makes it convenient and easily accessible for clients to communicate with Financial Advisors through the likes of Zoom (video calling), email, and web applications to assist with filling out and signing e-documents. This is especially true for Financial Advisors like us, who have clients all over the country. This actually works in favour of clients as they need not spend €100 on petrol driving hundreds of kilometers and use up 3 hours of their own precious personal time.



Myth #4: A Financial Advisor is too expensive


Fact: Financial Advisors usually charge an initial commission, an ongoing (trail) commission, or a combination of the two. It really depends on your needs, the product/service and what you are looking to achieve. When it comes to crafting a Financial Plan, Advisors can charge a financial planning fee based on hours of work put in. Here, if its a case of the client signing up for a product to support the plan (i.e., a Pension as part of a retirement plan), the Advisor can decide to waive the financial planning fee and instead be remunerated by the product provider.


That being said, an honest Financial Advisor who acts with integrity in all their dealings should never take fees or commission where it is not due. A good Financial Advisor will also be worth more than the fees they charge, and do their best to make it affordable for you. As mentioned in the Vanguard report, with the help of Financial Advisors, investors gained around 3% per year in value for their investments over time, compared to what they would have gotten if they had not used an advisor.



Myth #5: I have no need for a Financial Advisor – I can do it all myself


Fact: Yes, there are many people that are certainly capable looking after their own finances, however, research by Royal London showed most people feel more confident about money and financially better off when they do get advice. Additionally, like many professions, Financial Advisors make use of a full suite a tools, and informational sources to serve clients effectively and provide positive outcomes in their money trajectory for the future.



Myth #6: I don’t trust handing my money over to a Financial Advisor


Fact: Simply put, a Financial Advisor will never have access to your funds. You are in control of your money at all times. An Advisor, in this case, can only recommend or advise you where put your money.


For example, say you want to invest a lump sum of €10,000, and the Advisor recommends investing your money in Zurich’s XYZ fund. Zurich as the custodian (financial institution responsible for holding your money) will create an account in your name for which you can have access to and manage online. The Financial Advisor is your point of contact but does not hold your money – you are in control!



Outcomes of working with a Financial Advisor


1. Wealth: Advised clients build more wealth and have greater net worth over time.

2. Achieve your Goals: Those who work with Advisors are more successful at achieving meaningful goals.

3. Retirement Savings: Clients who work with Advisors are far more likely to have sufficient savings at retirement.

4. Confidence: Financial plans and advice will keep you better informed when making financial decisions and will leave you more confident in your financial future.



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