If you work with a financial advisor, it always helps to remember what they exist for. A financial advisor exists to help you with your financial circumstances and decisions – whatever they may be.

It may seem strange to state that, but sometimes the clients of financial advisers don’t want to tell their financial advisors about their financial decisions, circumstances, or more specifically financial “opportunities” they’ve been offered.

Financial advisers eventually do hear about those “opportunities”, but unfortunately for the client, only sometime after the client has acted on that opportunity – the time when it’s too late to get some unbiased advice. We’re talking about a second opinion, something that definitely would have saved clients significant sums of money.

A study from US financial advisory group Securican has looked into why their clients didn’t give a full picture to their advisors and there were some interesting contradictions.

While 95% of clients rated working with their advisor to save for a secure retirement as very important, a significant number of clients also admitted to having not shared important aspects of their financial situation with their advisor.

36% of clients didn’t share health concerns with their advisor. This is concerning due to the possibility of being underinsured and increasing the possibility of a financial setback from illness – two things that a person would never want combined.

32% of clients had not disclosed other investments they’d made, 29% had not disclosed loans to friends or family and 25% had not disclosed debt they’d incurred. Given all three of these reasons have a significant impact on any financial strategy, it seems odd to pay an advisor for advice that’s not based on a complete financial picture.

As for the reasons why – 51% thought the information was too personal, 44% felt it was outside of their financial strategy and 20% were too embarrassed to share. Clients also understood what they hadn’t disclosed may affect the advice their financial advisor would give. 28% thought their advisor would suggest they increase their saving, while 25% thought their advisor would suggest a new financial plan.

The combination of some of these responses seems to indicate clients know they’ve made decisions that may not be in their best interests, but they don’t want their advisor to confirm it. Many financial advisers have seen the aftermath of clients not asking for a second opinion, it can be an expensive lesson. Often it’s only the cost of a phone call that can save substantial amounts of money.

See these “opportunities” are often not really opportunities at all, at least not for the client. They’re often slickly marketed, too good to be true ruses. Stock picking software, forex trading and off the plan properties are usually pushed by salespeople encouraging you to make fast decisions and commit to something without considering it.

When it comes to your finances, if you avoid getting a second opinion because you suspect you would be given an answer you don’t want to hear, then maybe there’s something in that.

This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.

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