While Kim Kardashian attracts attention everywhere she goes, she recently caught the eye of the US Securities and Exchange Commission and was fined over $2 million for making one of her popular posts.
Her offence? Encouraging followers to invest in cryptocurrency without disclosing she had been paid almost $400,000 for doing so.
The case highlights the problem for people trying to make their own investment decisions and possibly being influenced by a raft of newly emerging so-called ‘fin-fluencers’. People who post investment advice online without a licence.
While it’s tempting to go it alone and not seek out professional advice, research suggests do-it-yourself investors are significantly worse off than those who do take the time to obtain quality advice, tailored to their particular situation.
According to a study conducted in 2016 by the US-based Vanguard Investments, financial planners have the potential to add up to three percent to the net returns they achieve for their clients. This compounded over your lifetime of investment can make a huge difference to your lifestyle.
The study found they did this by embracing various complex strategies including locating lower-cost investments, better managing the investments, and assisting clients in developing and sticking to financial plans.
These findings were also supported by research from the Queensland University of Technology. Clients of financial planners were surveyed twice, 15 months apart, to assess the impact of financial advice over time. It found clients’ satisfaction with their financial situation grew 12 per cent on average during this period. Additionally, clients who had been using a financial planning service for longer than this, believed they were in a much better financial position as a result of this advice.
As financial planners, we are highly qualified and experienced professionals who spend their professional lives working in and around financial markets.
We are not influenced by Kim Kardashian or other would-be influencers, who may or may not know what they are talking about and who certainly don’t know if a certain investment is suitable let alone the most appropriate option for each individual investor.
Importantly, as a financial planner, we spend time determining exactly what clients are hoping to achieve in managing their finances and their life goals, and we work to develop a strategy that is tailored to each client’s specific needs.
We understand your attitude to risk and how much risk you are comfortable with, in addition to determining which investments are most appropriate given your risk tolerance.
We bring a thorough understanding of how financial markets work and strategies suited to meeting short-, medium- and long-term client outcomes, and so are able to better protect our client’s financial positions over time.
Advisers support their clients through challenging times when clients may not know exactly what they should be doing with their money or how they should be responding to one-off events, such as falling markets or a spike in interest rates. It’s during these times that unadvised investors are most likely to make decisions that will negatively impact their financial future.
So, while Kim Kardashian might be a great source of advice next time you want fashion or beauty tips, when it comes to investing your hard earnt savings, it’s best to rely on professionals who know what they are doing and have your best interests at heart.
The purpose of this website is to provide general information only and the contents of this website do not purport to provide personal financial advice. Denaro Wealth strongly recommends that investors consult a financial adviser prior to making any investment decision. The contents of the Denaro Wealth website does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions. The information is selective and may not be complete or accurate for your particular purposes and should not be construed as a recommendation to invest in any particular product, investment or security. The information provided on this website is given in good faith and is believed to be accurate at the time of compilation.