Personal Finance Advice Could Help in Avoiding Financial Crisis

Kimberly Watson, Editor in Chief
May 11, 2012 /

Better than expected earnings results have prompted a tentative return to the stock markets, following significant losses during the second half of last year.

Various issues have been raised regarding whether the lack of good financial advice helped create the credit crisis. A further aspect, was the genuineness of independent financial advisors and if they could influence the averting of another financial crisis.

Issues relating to the current situation regarding financial advisors have been compared to that of receiving medical advice from a salesperson, representing a specific drugs producer. Many classified financial advisors, are paid commissions of the products they influence clients into placing their investments.

Relating to personal finance, it is advisable for a potential investor to determine whether a professional advisor is dedicated to their clients and do not receive commission from product providers.

Failure in avoiding financial crisis is reportedly caused by many the population not being financially aware and incurring excessive debt. This is compounded by purchasing large houses and over extending credit facilities and not obtaining proper personal finance advice.

Although there has been a large surge in earnings from this recession, it could be regarded as being of such a high degree, as not to be trusted and maintained. Caution has been advised relative to historical performances, which will provide a return of about 4 % when high. If compared with available alternatives it could be viewed as favorable, but still subject to a risk factor.

 

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