Whether it is school examinations, work performance reviews or health check-ups, most of us are used to assessments in our daily lives. Yet, few of us are so conscientious about our financial health. Yes, we may have good financial habits like paying off our bills on time and saving a portion of our pay check every month but do we really have a full picture of our financial health?Why Review Our Personal Finances?
Everyone has their own individual financial situation and different motivation to review their financial health. For parents, it may be the birth of a baby; for seniors, the passing of a close friend that reminds us of our mortality; for young people, it may be the first job and the first significant income from their annual and performance bonus; or for couples, it may be a union of marriage.
Even if we are very health conscious and knowledgeable about nutrition and fitness, most of us will still seek a doctor’s advice when it comes to any health issues. Yet, we tend to minimise the role of expert advice for our finances.This may partly be due to the mistrust we have of financial advisors. If our first instance of “financial advice” is through an insurance agent who is out to fulfil their sales quota and commission, it’s no surprise that we prefer to withhold information. Even if we have the most well-meaning financial advisors/ insurance agents who would not hard-sell us their products, they may not be familiar with products outside of their own company offerings or we may still feel obliged to buy a token product to compensate them for their hard work and advice.
This is where paying for financial advice makes sense to me. I chose to go with MoneyOwl. As their advisors are fully salaried, I didn’t feel obliged to buy a product to compensate them. They also represent multiple products across multiple insurers which relieves me of the need to check with multiple agents representing different companies. I also later found out that MoneyOwl is one of the first two organisations to receive the inaugural Centre of Excellence Star Award which recognises strong advocates of CFP® Certification training, which assures me of their advisors’ training and expertise.
Even The Financial Savvy Should Consider Paying For Financial Advice
Even as a personal finance editor, I can find it overwhelming to deal with my own finances at times. There are new products constantly being launched that often seem similar but different. Even if we are financially savvy, we may not be savvy or up to date in all areas of personal finance, including CPF, insurance, investments.
A good financial review can provide a comprehensive overview of all the different areas while booking an appointment with an advisor is a way of committing myself to set aside time to look at my finances instead of being distracted by everything else in life.
My Comprehensive Financial Planning (CFP) Showed Me That I Was On Track But Also Lacking In Some Areas
The process was easy. After I signed up and filled in my financial details that was used to generate my report, I then booked an appointment with my advisor, Anton, to go through the report together.
Report clarity: The advisor session was more useful than just reading the report. For example, Anton asked some questions that helped me to recall some additional sources of income or assets that I could have included (i.e. dividends, side hustles, gold jewellery). I was also able to make changes to the report later to incorporate these new additions.
Humanises my finances: For example, the report noted that I had significant cash savings that can be invested. Talking to Anton made me realise that 1) the cash savings were built up for my housing purchase which has already been chompleted, 2) I was holding on to the cash partly out of fear and uncertainty, and 3) there are other avenues where I can hold my idle cash while still retaining the cash liquidity.
Affirmation and blind spots: Anton also helped affirm some of my financial decisions I had made earlier like reducing my insurance coverage when my personal situation changed while also highlighting some gaps I had. For example, while I had good hospitalisation and surgery coverage through my Integrated Shield Plan, I had neglected to purchase CareShield Life supplement to maintain a similar level of care if I was disabled.
Expert knowledge: When it comes to product recommendations, Anton was knowledgeable when I mentioned using other platforms for dollar cost averaging. When I questioned him about the various insurers’ offerings for CareShield Life supplements, he was also able to articulate the differences and recommend one based on the criteria that was important to me.
Commissions rebates: This will not apply if you have no insurance gaps or choose to buy your insurance policies through other agents. As one of my gaps is in disability insurance, I chose to take up their recommendation and purchase an insurance policy through MoneyOwl. This qualifies me for commission rebates where MoneyOwl will rebate up to 50% of the first-year basic commissions directly to my bank account.
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