A couple of months ago I attended a friend’s 40th birthday party and met one of her lovely friends, I’ll call her Kate. Once Kate discovered I am a financial planner the conversation inevitably turned to managing money. I’m ok with that as I love helping out.
After letting on she was a bit older than 40 and maybe even late 50s or early 60s I asked if Kate had been to one of the many free retirement planning seminars that are offered by financial planners around the place. The reply was:
“Yes, I’ve been to quite a few. But they always seem to want you to come in for a meeting and sign up for a $3,000 financial plan.”
I hear that a lot, but this time I quickly shoved another canape in my mouth to stop my urge to evangelise.
Imagine my shock when 10 minutes later we were discussing the transition to retirement strategy and Kate came out with:
“Lots of people at work have told me I’m crazy not to be doing it, but I just haven’t got around to it. Oh, it’d only save me about $5,000 in tax a year.”
Did your jaw just drop too?
That’s irrational! How can you be happy to pay an extra $5,000 of tax per year but be unwilling to pay $3,000 once-off for comprehensive retirement planning advice?
Kate’s mistaken beliefs about the value of financial advice had given her tunnel vision in regards to getting professional help.
That tunnel vision was costing her at least $5,000 per year by her own estimate. Imagine how much more benefit she perhaps could get from advice that she was was not yet aware of.
Are your beliefs about financial advice and financial advisers giving you costly tunnel vision?
Were those beliefs formed years, even decades ago? Were they formed just on someone else’s experience, not even your own? If so, the industry has changed – a lot!
Perhaps it’s time to take the blinkers off and discover what you don’t know you need to know.