Managing finances can be very stressful, even if you are savvy with your money. A recent global survey by the Financial Planning Standards Board, an international body which oversees professional standards for financial planners, found that most people feel challenged by their finances. However, people who work with financial advisers feel better prepared to achieve their financial goals.
The survey was undertaken in 19 countries and involved 19,000 people. Only 22% of people surveyed feel strongly confident they will achieve their financial goals, while 17% believe strongly in their financial know-how and 19% feel they are successful at sticking to their financial strategies. Knowing who to trust for financial advice is the biggest barrier to working with a professional adviser. While 68% of those surveyed say trustworthiness is a very important consideration when choosing a financial professional, the same percentage say they don’t know whom to trust when it comes to receiving financial advice. Survey responses show that people with a written, comprehensive financial plan are nearly three times more likely to feel strongly confident about achieving their life goals, yet less than one third has a plan. Top-of-mind priorities for people surveyed are: being debt free, being prepared for an emergency, owning a home, planning for retirement, managing finances, supporting others financially, and managing investments. Planning to achieve these goals is a matter of
- Clearly defining your goals, when you want to reach them and how much they will cost
- Understanding your current financial situation, including your assets and liabilities, income and expenses
- Building a plan to achieve your goals
- Taking action and monitoring your progress
While it is possible to write your own plan, a trusted, competent financial adviser can guide you by helping to prioritise your goals, analyse your financial situation, recommend solutions and make adjustments over time.
Liz Koh is an Authorised Financial Adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847. For free eBooks, go to www.moneymax.co.nz and www.moneymaxcoach.com