Financial Planning Week: a call to action

By THIS IS MONEY
Updated:

 

As Financial Planning Week kicks off, Chief Executive Institute of Financial Planning Nick cann, challenges This is Money's readers to take action - and a quiz.

Financial Planning Week

Chances are if you use this website regularly, you feel confident in taking financial decisions based on the information provided.

It is great that people feel empowered to take these sorts of decisions and are comfortable doing their own research to seek out appropriate outcomes.

I would like to suggest however that in some areas, you may be setting yourself up for a fall somewhere down the line. Decisions made today will become out of date if not reviewed in the right context on a regular basis.

• TAKE THE QUIZ

Behavioural finance is a fascinating subject and is able to prove in so many situations that left to their own devices investors behave in an irrational way.

Great examples of irrational behaviour sit with the stockmarket and investment generally. Despite their better judgement people tend to buy at the top of the market or just when a trend is coming to an end (e.g. the dot.com bubble or property boom) and sell at the bottom (banks just recently). This can cost people dearly in terms of returns.

In the last 12 months we have also been over exposed to the 'too good to be true' scenarios. Thousands of investors have been stung by their investments in Icelandic banks and Madoff schemes, for example.

Uninformed or two dimensional decisions can ultimately hurt individuals who do not have the overall skill and competence that a professional Financial Planner offers.

A YouGov survey run in conjunction with Financial Planning Week (www.financialplanningweek.org.uk) shows that too many people are uncertain as to where their future lies or whether they are saving enough for the future.

Financial Planning looks holistically at all aspects of your finances and provides a strategy which is built around your goals and objectives. In many cases, you can continue to buy and sell your own investments or keep as much control over your affairs as you wish. What a planner does is give them the parameters and expertise that will keep the strategy on track.

Fiscal, economic and personal changes can occur on such a rapid basis that regular reviews are needed to ensure that the ball hasn't been dropped somewhere along the line.

Financial Planning Week exists to draw attention to the fact that everybody could do more to improve their own situation. Understanding the process and key aspects of financial planning is an important part of this. Remarkably those confident enough can do an awful lot themselves if so minded.

However, most should consider professional help at some stage or run the risk of seriously underachieving and missing their goals. Worse still some will not be able to do enough with their lives because they spent too much time worrying that they would run out of money when the reality was they had more than enough to have done loads more.

How sad would that be! Check that you are on track and do something different in Financial Planning Week.

• TAKE THE QUIZ

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