The other day, I contacted one of our clients to let her know her insurance policy premium was overdue and that the policy would lapse if it remained unpaid.
For privacy reasons I will name her Sandra. Sandra said that upon the advice of her “trusted” accountant, she will allow this policy to lapse as her circumstances have now changed.
What were her new circumstances? Very sadly, her husband had been diagnosed with a terminal brain illness. What was the accountant’s advice? To allow her Income Protection policy to lapse and redirect the “saved premiums” to mortgage repayments.
On several levels, the accountant has not acted in the best interests of his own client Sandra.
- What happens to Sandra should she find herself in a position to be unable to work and earn an income to pay for her living expenses?
- Has Sandra’s overall position (financial and her own health) been taken into account when advised to cancel her insurance policy, which Sandra has had for 7 years (health can often change in that period of time…)
- Just as importantly, the accountant has advised in an area in which he is not qualified to advise in.
The above scenarios happen all too often and the following needs to be kept at the forefront when acting on such advice:
- Is the person providing me with advice, qualified to do so? We are often tempted to act quickly and irrationally on forecast information obtained over the fence or at the barbers when it comes to investments…
- What is the person providing me with advice’s underlying basis for such advice, it is you, the client’s, best interest?
So in summary, ensure when you share your financial circumstances when seeking advice, you speak to an expert in that area, ensure the expert knows the full picture and overall, you will not be worse off as a result.
For an appointment with a qualified Wealth Adviser, contact us
Written by Maria Yankos – Practice Manager, Odyssey Financial Management