Reasons To Be Your Own Financial Expert

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Investing is a tool used to build wealth. To be a smart investor, you ought to be able to synthesize and separate good investments from investment product sales information. 

Please note that a Financial Advisors help you select the financial products and services that best meet your current and future needs i.e. investments, savings, pensions, and mortgages and insurance products. The operative statement here is “help you select” NOT select for you.

I have always advocated for financial education for all because when seeking out financial advice either from your advisor or from internet/media, there are always issues of conflict of interest which are hard to separate. If you want to become a profitable investor, you have to put in the work and learn how to become your own financial expert and discern information that will benefit you at the end of the day.

Many of us do not comprehend the problems inherent from the financial advice we receive such as the need to sell products/services and self-interest to earn commission from sales, which make these advisers less than impartial.  As such, most people purchase investment products by listening to expert advisers with the mistaken belief their advice is solid and assures great results.

4 Reasons Why You Should Become Your Own Financial Advisor

Writing as a former Financial Advisor (FA), here is the truth – there are a lot of underlying problems that make relying on FAs to make decisions for you unwise and they are:

1. FAs are plagued with bias and conflict of interest

FAs have their needs and want, and most of them will not place your needs and want before their own. They are pressured to meet their sales quota and need to take home the bacon hence your needs and wants often take the back seat.

Some of the areas of conflict of interest that may arise are:

a. FAs reasons behind making any particular recommendation.

b. Business and nature of the relationship with the company the Financial Advisor recommends.

c. Does the Financial Advisor earn any particular commission from sales or what other incentives do they have to promote certain investment products?

 And the list could be up to a mile long…so let’s not poke more holes onto this ship.

Speaking from an objective point of view, there are no expert resources that are free from conflicts of interest. Money makes the world go round, and people’s opinions shift with the breeze in that direction. So choose to elevate yourself and make your own informed decisions, rather than be swayed by a breeze that you have no idea of its origin or its course.

2. FAs hinder your own independent thinking and goals

What are your ideas of how you want to make and build wealth? What are your hopes and dreams? Do not let anyone other than yourself answer these critical questions for you. Figure it out first before you seek out the services of a financial advisor. Because, if they don’t sell it then you will never know how many ways you can invest and build your wealth to actualize your dreams.

3. FAs are no financial experts

And even if they were, they are still fallible despite their knowledge and track record. Many have no clue of what is what. Please be advised that my intention is not to insult or throw shade on Financial Advisors – my intention is to try to help you understand why you have no choice by to step up and make your financial decisions. Informed and enlightened. Always do your own research and arrive at your own independent investment decision.

Therefore, from an educated and informed perspective, with a financial advisor you are able to pick out products that suit you, say no to products that don’t and also build a great portfolio with the wide array of products FAs offer.

4. FAs often provide incomplete and inaccurate information

In the past, I have had bad experiences dealing with FAs as their sales tactics sometimes you will realize border towards harassment and insults for not buying-in. More so, when you are independent minded and know what you want.

Do not place yourself in such positions. Firstly, you might be dealing with bias, conflict of interest and inaccurate/incomplete information, and to top it a dishonest and sometimes very crude financial advisor. Therefore, as much as we want to trust everyone, the real world just does not operate like that.

This is not to say that all FAs are dishonest or crude, instead to not blindly trust, conduct your own due diligence before making any decision. Do not be swayed by the big words, fancy suits or the reputation of the firm.

Bottom Line

Please realize that the whole concept of an investment expert is incongruent with the probabilistic nature of investing – reasons being that investing is essentially already a probabilistic outcome and hence no one can tell with you with 100% certainty what the future holds. Hence an investment expert only makes educated guesses and conjecture.

So why not educate yourself as well, and make your decisions?

I hope this resource helps you. Please let us know what you think in the comments section below. If this article has been of great help to you please share it.

Meanwhile, You can click on the following links to read more on investments:

 

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.

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