8 out of 10 people without an adviser only plan short-term finances
82 per cent of people who do not work with a financial adviser only plan their finances for the short term – and this trend cuts across income brackets, ages and nationalities, a global survey carried out by our company has recently revealed.
When some of our teams asked potential clients – who did not at the time have an adviser – “Do you typically plan your finances one year ahead, one to three years ahead, or three years or more ahead?” more than eight out of 10 responded with the first option.
654 people, aged between 25 and 75 years old, ranging from middle income earners to high net worth individuals, and based in various countries, participated in the survey.
Our survey joins a growing bank of international data that highlights the trend of a short-term outlook in individuals’ financial planning. For example, in Japan 40 per cent of all share trades are now day trades, whilst in Britain a growing number of divorcing parents are reportedly raiding their pension pots.
In my opinion, it’s extremely concerning that the vast majority of people without a financial adviser are exclusively thinking about their finances in the short-term.
It’s alarming as longer term planning gives people more opportunities and more time to reach their ultimate financial objectives – which for most of us is financial freedom. The earlier you start your financial strategy, the easier the journey to your financial goals will typically be.
In addition, as we have seen across the world, governments are being forced to continually cut age-related benefits, meaning that older people will not be able to count on outside support to the extent they have done in the past, so we have to be more financially self-reliant in retirement. Plus, we’re all living longer, and as such the money we accumulate throughout our lives has to go further than it ever has done before.
It’s time to stop thinking short-term, if personal circumstances allow, as longer-term financial planning can bring those lifestyle-enhancing benefits most of us desire sooner rather than later.
Nigel Green deVere Group
Blog written 26th June