Fin-fluencer or financial adviser 

By Ali Roshan

Celebrity Kim Kardashian recently came to the notice of the US Securities and Exchange Commission which fined her over $2 million. She had encouraged followers to invest in cryptocurrency without disclosing she had been paid almost $400,000 for doing so. 

The case highlights the problem for people making investment decisions based on ‘fin-fluencers’, who post-investment advice online without a licence. 

While it’s tempting not to seek professional advice, research suggests do-it-yourself investors are significantly less successful than those who obtain quality advice, tailored to their particular situation.  

According to a study conducted in 2016 by the US-based Vanguard Investments, financial planners have the potential to add up to three per cent to the net returns for their clients. Compounded over a lifetime of the investment, this can make a huge difference to lifestyle. 

The study found qualified advisors embraced various complex strategies including locating lower-cost investments, better managing the investments and assisting clients in developing and sticking to financial plans. 

These findings were also supported by research from the Queensland University of Technology. Clients of financial planners were surveyed twice, 15 months apart, to assess the impact of financial advice over time. It found clients’ satisfaction with their financial situation grew 12 per cent on average during this period. Additionally, clients who had been using a financial planning service for longer than this, believed they were in a much better financial position due to this advice. 

What are the key advantages of using a financial adviser? 

Financial planners are highly qualified and experienced professionals who spend their 5professional lives working in and around financial markets.  

Professionals are not influenced by Kim Kardashian or others who certainly don’t know if a particular investment is the most appropriate option for each individual investor. 

Importantly, financial planners determine exactly what clients are hoping to achieve in managing their finances and their life goals and develop a strategy that is tailored to each client’s specific needs.  

Professionals understand how much risk you are comfortable with, in addition to deciding which investments are most appropriate given your risk tolerance.  

Planners bring a thorough understanding of how financial markets work and strategies suited to meeting short, medium and long-term client outcomes, and so are able to better protect clients’ financial positions over time. 

Advisers support their clients through challenging times when clients are undecided about what to do with their money or how they should be responding to one-off events, such as falling markets or a spike in interest rates. It’s during these times that investors without professional support are most likely to make decisions that will negatively impact their financial future. 

Qualified and experienced advisors help give clients the financial peace of mind to enjoy their lives. 

So, when it comes to investing your hard-earned savings, it’s best to rely on professionals who know what they are doing and have your best interests at heart. 

Ali Roshan is an Authorised Representative (ASIC No. 000378611) of Lifespan Financial Planning  

ABN 23 005 921 735 AFSL Number 229892 

No Advice Warning / General Advice 

The purpose of this article is to provide general information only and its contents do not purport to provide personal financial advice. EQ8 strongly recommends that investors consult a financial adviser prior to making any investment decision. 

The contents of this EQ8 article does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions. 

The information is selective and may not be complete or accurate for your purposes and should not be construed as a recommendation to invest in any particular product, investment or security. The information provided on this article is given in good faith and is believed to be accurate at the time of compilation.