What’s the difference between general and personal financial advice? And how do you know which kind to seek out?
You think you need financial help, but reckon you can go it alone. After all, there’s so many podcasts, blog posts 🙋♂️, YouTube videos and books that can help you do it all without a financial adviser, right?
It’s true that there are a lot of resources out there on money matters, investment tips and all sorts! But like with everything on the internet (and beyond), read and research with a bit of caution. One of many benefits of working with a financial adviser like Wealthy Self, is that they know your personal situation inside out. Which means a financial adviser can give you the best advice for your individual situation.
It’s the important difference between general and personal advice. So, let’s break it down…
General financial advice
Essentially, general financial advice is just that. It’s general and non-specific to the people that are reading, watching or hearing it.
- Doesn’t consider your personal goals, personal or financial situation: General financial advice is broad-reaching advice that generally sounds good, but may or may not work for you individually. Because every life is different!
- Is generally low cost or even free: like buying a book on budgeting, following advisers on social media or signing up for a newsletter.
- Will often have a disclaimer stating that the advice is general: the article, book, podcast or video will usually recommend seeing a financial adviser for your individual financial needs.
- Can also be provided directly by a financial adviser: general advice can be given before and throughout an agreement if you approach a financial adviser in person or online with a few general questions.
Risks of taking general advice
- No liability: If you follow general advice and suffer a negative outcome, there is likely to be no liability against the provider of the general advice. This is because there is usually a disclaimer covering them.
- The advice may not be correct: the information provider doesn’t have to be qualified to give general financial advice. While the advice might sound good, you’ll need to do your own due diligence on what is best for you. No matter how well-intentioned the advice, general advice might not give you the best outcome. It doesn’t take into consideration your unique situation or background. So it’s best to do some research, not just take the general information as being appropriate for you. Seek professional financial advice to ensure it’s the best strategy.
- Personal finance isn’t a one size fits all: Mass general advice can be misconstrued as being the ‘best’ option for everyone, which it isn’t. One size doesn’t fit all!
Personal financial advice
Personal financial advice is the complete opposite. An adviser will ask you a lot of questions and ask you to provide plenty of paperwork. That way they can work out the best possible strategy is for you and your unique situation. Personal financial advice recognises that no two people are the same.
- Can only be given by a qualified professional, unlike general advice.
- Considers your personal situation before making a specific recommendation.
- The cost of advice is generally higher than general advice because it factors in your personal details which takes time and expertise. The cost of personal advice depends on many factors. These include the scope of your strategy, the time it takes to implement, and the type of advice provided.
- Incorporates the legal responsibility for the advice in meeting the client’s goals and objectives, which can give you peace of mind!
- Provides information relevant to you, your goals and objectives based on your actual data and situation.
- A qualified professional does the due diligence to ensure the advice you receive is accurate and in your best interests.
Risks of personal advice
- It’s only as good as the information you share: If you don’t give all the details your adviser asks for, you can’t expect the best advice for situation. So be honest, supply all the details and paperwork, because they’re working in your best interest. Trust us, we’ve seen and heard it all so nothing will surprise us!
- You get what you pay for: the cheapest option can often reflect the time spent on the advice and can affect the overall quality.
- It takes time: Like everything in life, getting the results you want can take time. Personal advice might not be the “quick fix” you’re looking for, but it can help you get short-term results. While building your long-term financial future, too.
This is an edited version of an article that was originally published on Wealthy Self. It contains general information only. It should not be relied on as finance or tax advice. You should obtain specific, independent professional advice from Wealthy Self or another registered financial adviser in relation to your particular circumstances and issues.