About one in six Brits has received bad financial advice from their friends and family and have suffered financially and emotionally as a result, according to new research from the specialist mortgage provider (Birmingham Midshires)Almost one in five (17%) wasted a lot of time in the process. Just over one in 10 (12%) admitted that their relationship with the person who gave the advice had deteriorated. A minority of those questioned (4%) lost an asset such as a house, a car or another belonging of value.(Read the full article by Lorna Bourke here on CityWire .)
The results of this study reinforces the message of the “Dazza” commercials run by the Financial Planning Association of Australia in 2005. (View all three videos here.)
Following advice from unqualified people, no matter how well meaning, is high likely to be inappropriate for you specifically.
Here are some reasons why:
- The unqualified person may have much broader knowledge than you but it is probably not broad enough. They have probably only researched strategies and products that broadly fit their needs and goals.
- On the surface of what you each publicly share there may appear to be similarities between your situations. But it is in the depths that the subtle nuances appear. In truth your needs are probably vastly different to theirs.
- Human nature results in us generally crowing about the upside and the benefits while glossing over the potential downside and risks. You need to have a full picture and make an informed decision.
Do yourself a favour – save time, emotional energy and money by seeking good advice from a fully qualified and licenced financial adviser.