Why are people hesitant to seek financial advice?

Do you wonder how some people are able to meet their financial obligations comfortably while there are many others who keep struggling with their finances all their lives? What is the reason behind this contrasting situation?

One of the foremost reasons is Financial Investments!

Financial investments made at the right time and in the right way have numerous advantages for the investor. They can help a person grow his wealth at a better interest rate, beat the inflation, reach his financial goals comfortably, create a passive income stream, secure his financial future, etc. However, the majority of the general populace has limited awareness of the investment options available in the market because not everyone is from a financial background and acquiring financial knowledge, like any other field, requires considerable time and effort.

Who to ask for help?

The simple answer to this question is a Financial Advisor!

But, do we really seek advice from a financial advisor as often as we reach out to other professionals e.g. a doctor in case of a medical emergency, or an engineer while building a house, and so on? The answer is a No!

Why is there a hesitation when it comes to seeking financial advice from the professionals?

The reasons are varied. Some of them are valid too but others are often myths. Let us look at some of the prominent reasons here:

1. Cost: An astounding 80% of individuals with financial assets advocate for accessible professional financial guidance (source). However, in a world where trustworthy experts are rare, the absence of standardised consultation fees has made obtaining financial advice a costly venture, particularly for middle-income individuals.
   
   Financial advice can be costly, but it does not necessarily have to be. There are different types of financial advisors who offer reliable advice and are also easy on your pockets. Also, the benefits an investor can reap from the right financial investments can be far more rewarding compared to the cost of professional financial advice which can prove to be a miniscule factor and totally worth it in the longer run.
    
2. Pride or Shame: Humans are often overwhelmed by their emotions while making their simple as well as crucial life decisions e.g. a person can be accomplished in other fields and, therefore, can feel too proud to seek financial advice from others even if it is as important as personal finance. Whereas, there can be others who can see their lack of financial knowledge as their inadequacy and can feel ashamed to acknowledge it in front of others including the professionals. According to the "FSCS Consumer Research: Attitudes towards Financial Advice," little over a third (36%) of participants in the UK with savings, investments, or a mortgage had sought financial advice within the previous five years. This percentage was higher for men than for women, 41% versus 32% (source). Thus, the data suggests that people are unwilling to seek expert help because of shame or they believe they can manage their own finances, despite the fact that they are not from the same background.
    
3. Sense of contentment: People are content with their financial status, and hence, unwilling to seek professional advice mainly because they fail to realise just how dire their financial situation is until they hit rock bottom. They are not even aware that their financial situation can be improved by better planning and professional help!
    
4. Age and low income: Young people believe financial investment should be done at the age of retirement which is not true as being proactive with your investments can be much more rewarding than procrastinating or delaying it for years. Also, there is a misconception in society that only high-net-worth individuals go for professional financial advice. According to one survey, 23% of those who sought guidance but did not engage a registered financial consultant did so because their savings and assets were minimal (source). However, financial advice is independent of age and income group and can benefit one and all irrespective of their age, experience or income.
    
5. Trust: Entrusting your finances to another individual is a formidable task, as money holds both emotional and material value for everyone. People who are aware of the need for professional help also find it difficult to trust the professionals in the market because tales of organisations and individuals falling victim to fraudsters are all too familiar. Also, some financial advisors can try to sell them something they do not really need. Since money is earned mostly the hard way, people are less likely to take chances with it for the fear of losing it unwittingly. However, the key to avoiding fraud is good research which can help find professionals who are trustworthy and proficient in their field. In case of doubt, one can go for recommendations from trusted friends or relatives who are already availing services of the professionals!

Drawbacks to not seeking financial advice

1. Risk of making poor investment decisions:  In the world of investing, it's not enough to simply follow the herd. Understanding the intricate dance of risks and rewards is key. Sure, your cousin might be striking it rich in the stock market, but your financial journey is uniquely yours. Before diving in, take a moment to reflect on your personal financial goals and seek professional help whenever in doubt lest you end up investing in risky products or taking on too much debt e.g. you might be able to invest yourself but your investments might not be diversified enough and hence could lack stability leading you to incur losses instead of profits in future!
   
   rofessional financial advisors can unravel your financial ambitions and decode the intricacies of risk. Armed with this knowledge, they can craft a tailored, less perilous investment plan for you. It is your financial compass to a brighter future.
    
2. Failure to achieve your financial goal: Lack of financial planning and right investment can make it difficult for you to reach your financial goal which can lead to the vicious cycle of financial instability and financial stress which can affect you physically and mentally.
    
3. Missing out on opportunities: Inability to take professional help can hold you back from identifying and taking advantage of financial opportunities, such as tax breaks and various rewarding investment opportunities. This could lead you to have less funds for your retirements which could leave you struggling for finances in your later years.
    
4. Lack of preparedness for unpleasant events: Because of poor investment planning or lack thereof, you might end up struggling during difficult financial situations like loss of job or medical emergency!

Conclusion

We stress the significance of professional financial guidance because we understand the profound connection people have with their finances. It is the fuel that drives their aspirations, and the shield against the eroding power of inflation. While basic financial knowledge is a valuable stepping stone, relying solely on intuition and fundamental understanding can cap your money's potential. We all fear asking for help because we have been conditioned to equate it with admitting inadequacy. But in reality, seeking assistance is not a sign of ignorance; it is a testament to proactive preparation and deep comprehension, the path to financial mastery.