Financial Advice-More critical then ever

Recent events locally and globally has led to huge uncertainty with Investors. Market volatility, economical turmoil and especially political uncertainty have resulted in panic with Investors and subsequent poor decisions with investment choices.

It would be important for Investors to consult with their Financial Advisers to guide them through these volatile times. It is their job to make sure you make the right decisions in protecting your wealth.

Investor mistakes

Common mistakes made by Investors are the following:

• Preconceptions – Only paying attention to information that confirms your preconceptions.

• Loss aversion – Falling to act or taking only timid actions.

• Herding – Following others despite reality.

• Chasing yesterday’s winners – following funds instead of strategy
• Preference for stories over facts – Believing promises and tales of great successes and returns, which is key to the success of Ponzi schemes.

The value of advice

Research has shown that investors who work with financial advisers have accumulated more wealth. These investors have shown more discipline and stable in decision making during good and difficult times. They allowed their advisers to keep them on track with their investment strategy without deviating and making impulsive decisions.a Good financial adviser will look at your unique financial situation holistically, and help you implement a watertight financial strategy with a long-term view that will be managed to adapt to your changing needs as you move through various life stages.

The future of financial advice

Robo advice doesn’t evaluate complex family histories or help you to smooth your consumption or spending through planned and unplanned life events. It can’t answer tough questions in tough times, and it can’t identify and explain unusual risks and opportunities for your investments.

Financial advice is about coaching and planning as well as investing and financial protection, and while how advice is delivered may evolve, human behavior and the need for human advice will not change.

The introduction of robo advice should not be seen as a substitute for a financial adviser, as robo advice does not provide an ultimate solution to all your advice needs.

Advice is therefore key to making decisions that will increase or preserve your financial well-being for an independent financial future.

It is therefore safe to say that advised investors are able to accumulate more assets and build a balanced portfolio, manage their financial risk wisely, smooth their consumption to save for times they may not have, and optimise their personal balance sheets.

A Common trademark of successful investors is that they have a solid financial plan that follows a pre determined strategy. These investors stay on this plan even during volatile times. They allow their financial advisers to guide them to creating wealth.