Granite guidance

Financial Planning Myths

Financial planning done properly can dramatically improve people’s lives and in some cases, can be truly life changing. But what is it?

The term “financial planning” has been hijacked and many use the term without understanding it and many myths have been perpetuated.

Financial Planning is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it's not just about buying products like a pension or an ISA.

Some of the common myths are:

It is only for rich people

This is simply not the case and those with modest means can arguably benefit even more from the process.  

Financial planning is for anyone who wants to organise their finances, has goals to achieve and wants to make a plan to help achieve those goals.

An investment portfolio is a financial plan

An investment portfolio is not a financial plan. The financial plan must come first as it informs the investment strategy. Some clients will need to take some investment risk to achieve their objectives whilst others may be able to reach their goals by using cash deposits.  Without undergoing the planning process an investment portfolio may take more risk than is required.  It is a one-off event

There is undoubtedly value in preparing a one-off plan but the real value is to be found in regularly re-visiting the plan and reviewing what has happened in real life.  Progress against the plan should be monitored on a regular basis and changes can be made in line with real life events.

Too many assumptions make it pointless

The use of assumptions does form an integral part of a financial plan particularly as the plan is forward looking into an uncertain future.

Assumptions should be reasoned, reasonable and adequate for the plan and should be reviewed on a regular basis in line with other elements of the plan.

It’s expensive

Financial planning does take some initial investment. Avoiding that investment today means you could be spending a lot more down the line. There are some simple and preventable mistakes that a Financial Planner can help you avoid, and by avoiding just a few costly slip-ups, your plan will pay off quickly.

Anyone can prepare a financial plan

Whilst this is technically true only a Certified Financial Planner holds an internationally recognised qualification which provides a robust testing of financial planning. This qualification is only held by a small number of practitioners in the UK.

The New Year normally heralds several resolutions for the year ahead and getting your finances in order and building a financial plan should be on your list.

Paul Gibson is a Chartered and Certified Financial Planner and can be contacted on 01224 781280. 

Granite Financial Planning Ltd is Authorised and Regulated by the Financial Conduct Authority | FCA No. 734432.
Registered in Scotland | Registered no. SC522812 | Registered address: Banchory Business Centre, Burn O’Bennie Road, Banchory, Aberdeenshire AB31 5ZU | Telephone: 01330 826544 | Email This email address is being protected from spambots. You need JavaScript enabled to view it.

Connect with us:
Paul Gibson on Linkedin Paul Gibson on Twitter


The general financial planning guidance provided in this website is based on our understanding of current law and HM Revenue & Customs practice, which are subject to change in the future. Whilst every effort is made to ensure the content of this website is correct, it does not constitute personal financial advice and Granite Financial Planning Ltd cannot accept any responsibility for it. There is a risk that investment returns may not achieve the desired result. Investments can go down as well as up. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at Cookies are used on this website to record visitor numbers for analytics purposes.