This is Part 1 of a 2 Part Series. Read Part 2 here.
I have been wondering for some time why so many people seem to fear obtaining financial advice. In Australia less than 20 per cent of people have a financial adviser at all, and substantially less than 10 per cent regularly engage with an adviser. Whilst there may be a number of reasons for this, a major factor in my view is that lots of people “fear” seeking financial advice, and as a consequence they just don’t do it. In this and future articles I will explore some of the “fear factors” in the hope that I can – to use Yoda’s words, help people to avoid “The Dark Side”.
1. Fear of being “sold” something.
I’m not sure about you, but I absolutely hate walking into a car yard. If I could go into the showroom, make my selection, enquire of and accept the price, and drive away, that would be my ideal car buying experience. Instead, a “salesman”, who increasingly looks like he could have gone to school with my son, bombards me with feature lists, tries to upsell me, confuses me with trade-in valuations, gives me so many colour choices, interior finish choices, engine and gearbox choices that I would rather walk away than make the decision to buy. What I am looking for is someone who will listen to my needs, recommend a product, demonstrate why it fits my needs, then tell me precisely how much it will cost. I suggest this is exactly what you should be looking for in a financial adviser.
“Named must your fear be before banish it you can.”
2. Fear of being “made” to do something
We have all been in the situation. Our regular visit to the doctor becomes a moment of dread, as the doctor tells us how we must give up smoking, drink less, lose weight, do more exercise etc. It could be argued that these “recommendations” are all things that we know we ought to do, but because they have been delivered by a professional, an expert, someone who knows what he is talking about, we would rather not hear the advice, than feel obliged to accept it. By seeking financial advice, do we fear that our spendthrift and profligate days are over, that we won’t be able to spend our money as we want with no concern for the future. Better not to get the advice than be told that isn’t it.
“A darkness in your future, I see”
3. Fear of being told the truth
At times we all live in denial of our own reality. Something will come up to save the day won’t it? If we can just get through the next month or so, or till after Christmas, or till we come back from holidays, then everything will be alright. If we seek advice, we might be told that this is an illusion, and we wouldn’t want that would we? So rather than have our illusion shattered, rather than face the truth, we can just put off doing anything, cross our fingers and hope that something comes up. Just waiting is not a viable strategy for the long term, nor is waiting for something to happen any kind of plan for the future.
“Do, or do not. There is no try.”
In my next article I explore some more fears, and in the last of the series make some frightening recommendations about what you should do to overcome them.