70 per cent of people without a financial adviser only plan for the near future
Over 70 per cent of individuals only plan for their finances focused on the short-term, according to a recent deVere Group poll.
We asked a cross section of potential clients (who at the time of the poll did not work with an independent financial adviser), aged between 25 and 70, varying from middle-income earners to high net worth individuals: “Do you plan your finances one year ahead, one to three years ahead, or three years or more ahead?” 71 per cent of those questioned replied with the first option.
This same survey was undertaken in 2013, when it was revealed that 82 per cent of individuals claimed to plan their finances a year ahead, showing that an increasing number of people are now taking a longer-term perspective.
It is somewhat encouraging to see that this recent poll shows how more and more people are planning for their finances for the longer-term. Although it is extremely concerning that seven out of ten individuals, of all ages, nationalities and wealth brackets, who do not consult a financial adviser, are just thinking about the near future when it comes to their finances.
It is almost universally recognised now that longer-term financial planning is crucial in order for people to reach their objectives more easily, as this allows for more time and opportunities to achieve their goals.
A long-term strategy, in effect, acts as a roadmap to enable individuals’ financial affairs to grow and develop. However a large number of people are of the perception that long-term planning is more difficult.
This is not the case.
The earlier a plan is implemented, the easier the road to fulfilling financial ambitions will be. Plans can be modified over the years, so it’s far better to put one in place sooner, rather than waiting for the ‘right time’ down the line.
Furthermore, planning for the longer-term has never been more essential, considering the fact that governments are cutting age-related benefits, so people will be unable to rely on this support in the future, meaning being self-reliant in retirement is more critical than ever before.
Additionally, we’re all living longer so retirement funds have to last longer too.
Consequently, in order to reach, perhaps exceed, long-term goals, individuals must focus on a financial plan of longer than a year.
It’s up to us an as industry to drive this message home!