The Financial Planning Association of Australia’s most recent ‘Money and Life Tracker’ report revealed a surge in the number of Australians intending to seek help from a financial planner. The pandemic has served to accelerate the industry’s demand growth with more investors realising the benefits of engaging a professional financial planner. We discuss why quality financial planners are expected to remain in high demand below.
Beating the challenges
One of the most challenging aspects of prudent financial management for most DIY investors is putting together a comprehensive investment plan and sticking with it.In contrast, financial planners specialise in creating investment plans daily and have extensive expertise in customising investment plans to meet investors’ objectives.
An investment plan created by a financial planner will consider a range of factors including an investor’s time horizon, risk profile, tax planning, and macro risks such as inflation. These are all critical investment considerations that are often ignored by DIY investors. It’s easy to understand why. Investors face a vast array of investment choices daily, and they are also battling their own emotions and cognitive biases. As such, the problem with investing without a longer term investment plan is that the risk and return profile of DIY portfolios rarely match up with investors’ objectives. DIY investors often discover this mismatch during a market correction or a structural change in the macroeconomic picture such as sustained high inflation as we are seeing at present.
The much needed support
Financial planners not only help investors plan their long term investment strategy, but they also provide the emotional guardrails most investors need to remain on track to achieve their goals. The value of this service can’t be understated.
When DIY investors are faced with volatile emotional market conditions, it’s all too easy in the digital age to press a button and sell investments at exactly the wrong moment. Financial planners are there to guide investors through the ups and downs of markets toward their long term goals. That means being a champion of their financial success.
So quality financial planners are expected to remain in high demand. As Landen’s Head of Financial Services Malcolm Strain explains: ‘The pandemic and the impacts of inflation have highlighted the value of quality professional financial planning and guidance to many Australians. As an industry, we’re here to help ensure our clients navigate the challenges of financial markets to reach their long term financial goals. Most of our long term clients would agree that working with a financial planner is a game-changer for their investment management, and also for their stress levels. We’re an investment in their future.’
Visit Landen Wealth to find out more about our financial services.