AsiaLIFE

When it comes to personal finance, going it alone has never been easier. Planning, budgeting, trading and monitoring of investments have all been brought home to the individual through the internet, the mobile phone and even TV. Thousands of books are on the subject, not to mention scores of software applications – and they are all designed to enrich our bank balances and ultimately our lives. But are they really a good thing?

Going It Alone

During the 90s online brokers appeared to be all the rage. There were even those who traded in their day jobs for day-trading – buying and then selling stocks, currencies, commodities and other financial products, all in the same day in the hope of making a quick profit. Do-it-yourself investors used the internet to research, pick and trade their own stocks. Drawn in by the ease and accessibility of online trading, many of them lost their shirts.

Living in an age when real time stock prices, affordable online brokers and accessible research are all available at the touch of a button, there is no doubt that such hi-tec convenience can be tempting. If you are thinking of going it alone, I advise caution. Remember you know you need a personal financial adviser when you:

• Lost a lot of money in the dot com boom and bust in the 1990s;
• Think day-trading is an easy and quick way to make money;
• Start believing every analyst and every pundit you see on financial news programmes on television – and you are willing to invest in every stock they talk about;
• Think you've discovered the next big thing – another Microsoft – and you are tempted to spend every cent you own buying the company's shares;
• Think that if you invest in the stock market for a few months you can make a quick 'killing';
• Think picking successful stocks and winning investments requires little work and is easy.
 
Do You Need Professional Help?

All joking aside there are some serious signals that might indicate you need a hand when it comes to sorting out your personal finances.

You are surviving on credit
If you are reliant on your credit cards to make ends meet and are unable to save or pay bills on time then it might be time to hand over your financial planning to someone else.

You live from wage-cheque to wage-cheque
If you are totally reliant on your wage-check to meet all your monthly costs, and have no financial contingency plan to fall back on if you lost your job, then it might be time to seek financial advice.

You have no retirement plan
If you have absolutely no idea what your retirement will be like and what you would need to live on after you retire, then you might need to engage a financial adviser.

You have just experienced a major change
If you have just had children, got married or started your own business, then you might need a financial planner to prepare for the future.

You are undisciplined
You find it impossible to save and you find it very easy to 'blow' all your money without any thought of your plans for the future. You might need a financial adviser to keep yourself and your plans on track.

Be Realistic

Remember that financial advisers are not magicians. They are there to protect you from yourself and your wild financial impulses. They should come up with a comprehensive financial plan that dictates what you will do with your money, help you to define your financial objectives, and suggest ways and means to achieve them. Finally if your financial adviser uses the phrase “you can bet your house on it” – look for either another adviser or a new house.