Many Malaysians believe only the rich can afford to hire a financial planner. Why bother when many younger generations feel they don’t make enough to start proper financial planning.
Contrary to popular belief, hiring a financial planner is not exclusively reserved for the high net worth individuals.
Studies have shown that a comprehensive financial plan can benefit people at all income levels. In fact, only 31% of financial decision makers in families have created a comprehensive financial plan according to the 2012 Household Financial Planning Survey.
Here are 10 different ways how hiring a financial planner could benefit the average Malaysian:
1. Holding You Accountable in Achieving your Financial Goals
If you read our other article “Thinking of Hiring a Financial Planner in Malaysia?”, you would learn the importance of defining your financial goals. Having a financial planner on your camp would keep you accountable for achieving your financial goals. This is extremely useful for the average folk as most people spend more time planning for their next vacation rather than their retirement, for example.
2. Evaluate How Realistic your Goals are as a Third Party
Regardless of income-levels, all of us tend to define financial goals which are more emotional than realistic. Having an independant third eye would be critical in helping us define a more achievable timeline. Usually, it’s not that the goal is not attainable, it’s that we underestimate our ability to reach them. This is important as having the right expectations could drive us in making better decisions on how much to save, what types of investments to make and so on.
3. Helping You to Keep Tabs of Your Cash-Flow, Professionally
Yes, your life partner or your mom can nag you about your excessive spending for free. However, it’s different when a professional does it. Your financial planner will be more informed and more tactful in reminding you when you are at a negative cash flow.
4. Benchmarking Your Performance Across the Board
Keeping track of a financial plan is a complex activity. If you are paying 10% interest to a bank, are you making anywhere near 10% on any of your investments? How do you benchmark yourself with other investment portfolios? Most of us have a day job, and lack access to industry numbers, hence the importance of having a financial planner at your corner is even more apparent!
6. Providing You New Ways to Maximise Your Money
Having an outside expert look at your financial picture might reveal opportunities to make or save money that you hadn’t thought of. Financial planners usually have the relevant experience and exclusive resources to recommend you a strategy that fits your situation. Of course, you can choose to google your way out of this, however, that would extract more time and effort from you.
7. Identifying Risks You Hadn’t Thought Of
Chances are, your financial planners have multiple clients just like you. They might explore the risk factors that you might miss. For example, what’s your risk of becoming disabled or dying early? They are able to lay this down due to the fact they might see actual cases before. They are definitely more equipped in providing you perspectives or analysis that you’re not aware of.
8. You will be more Confident About your Financial Health
Typically, people will feel in control when they actively following through a personalised financial plan. And in case of the worst case scenario, it’s assuring to have a mentor-like figure like a financial planner supporting us. In contrary, most of us without a financial planner would feel our money controlling us instead.
9. You will be on Pace in Building your Best Wealth
We have established at the beginning of this article that financial planners are not just only for the rich. In fact, for what it worths, engaging a financial planner has all the reasons to help you get rich. Multiple studies have shown that people who are accountable for a financial plan or planner are more likely to pay their credit bills in full. They would have more money saved and have a higher chance of reaching their financial goals.
Financial health — just like the physical or mental kind — takes time and effort. It doesn’t happen overnight. You don’t have to understand everything about personal finance at once, just like how you don’t need to understand everything about cooking to eat good food.
Yes, you can learn how to cook and cook daily, like how you have all the reasons to learn financial planning to generate your own financial plan.
However, most of us don’t have the luxury of extra time and energy to learn a complex topic from scratch.