If you think financial planning is a simple matter of buying life insurance policies, unit trusts and equities then it’s time for a rethink. Without proper guidance a ‘do-it-yourself’ approach can be bad for your financial health.

Ask yourself if your investments are financially sound, and whether you are on track for building a comfortable retirement nest egg. The ease with which one can invest in equities, for example, often gets investors hooked on speculating until a downtrend catches them out. Then there are the unit trusts that come with distracting free gifts, and the insurance agents making recommendations driven by commissions and not their client’s needs.

Paying premiums over the course of 35 to 40 years is a huge commitment, but because people pay annually they often do not realise it – choosing the right product could save you hundreds or even tens of thousands of dollars a year.

The Financial Advisers Act that came into effect in 2002 changed Singapore’s financial-planning landscape. The barriers between banking, stockbroking and insurance were removed, creating a much more level playing field and encouraging financial planners to promote more products and greater choice.

So, make sure you are not blinded by the lure of ‘goodie bags’ and other ‘irresistible’ perks. Shop around and consider all the alternatives, not only when it comes to your investments but also when it comes to choosing your financial adviser.

ARTICLE REPRODUCED WITH THE KIND PERMISSION OF SMART INVESTOR.