The financial services industry has had a terrible reputation over the past few decades due to the lack of ethics of some financial services professionals.
Anything from the Bernie Madoff scandal to the 2008 housing market recession are some examples that have tarnished financial professional's reputation.
People are often hesitant to use financial advisors, asset managers and other financial professionals due to lack of trust and previous events in the past. Even worse, people are hesitant to even invest their money into the financial markets at all.
I agree that one should be selective as to who they hire to help manage their money and proceed with caution when choosing to make an investment or a financial decision.
This is why I believe it is important to attain strong financial literacy and an understanding of the financial markets and our economy in general.
Having a general understanding of financial jargon and a well rounded education when it comes to finance, investments and business is crucial when interacting with financial professionals.
This will enable you to understand if there is a conflict of interest in your relationship with your financial manager and ensure they are making decisions suitable for your financial situation.
For those that are self starters, seek the further financial education and create more time to manage your personal finances properly. If you can do this I would suggest that you do not need a financial advisor for basic financial management, but still seek out various professional services and products when needed.
For those that aren't as educated in the financial world and lack the time to manage their personal finances properly, then I would suggest that you do seek the services of a financial advisor, asset manager and other financial services.
If you decide to use a financial advisor, do not sit back and let them make all the decisions for you.
You need to be educated on all the recommendations your advisor makes and be engaged in your conversations with them.
While I do believe that there are many honest advisors, there are definitely a few shady advisors that will encourage you to purchase financial products that are not your best interest because they are seeking a commission.
A benefit of using a financial advisor is that you could utilize their expertise and resources that you do not have access to you.
You also can gain a different perspective that you have never considered before.
Another benefit is that you also can have the piece of mind that your finances are in order if you have a strong relationship with an advisor because they are delivering consistent results and you don't have to spend hours of research to ensure you investment portfolio managed properly.
No matter what path you decide to take you should always be active and educated in your personal finance situation. The reason why I started NOW Economics was to educate people and become financially literate and live better lives. I believe that financial education is not encouraged enough in our society and I want to help people make better decisions.
So I encourage you to take your financial education serious and enhance your relationship with your financial advisor, investment advisor, retirement planner, estate planner, accountant and any other professional you will use.