Bob’s yer uncle, not a financial adviser

WE’VE all been there. You might be thinking of buying a property or investing in shares or even asking for more money at work.

Bring the topic up at a family barbecue and someone will pipe up: “Why don’t you talk to uncle Doug about it? He knows a bit about property. He was a real estate agent back in 1987.”

What follows is mostly the worst piece of financial advice you will ever receive. Accept it at your peril. New Mortgage Choice research has revealed 68 per cent of Australians admit they have made a “regrettable” financial decision.

And the mortgage firm’s chief executive officer, John Flavell (above) said, many people were quick to put family and friends in the firing line.

“Of those who admitted to regretting at least one of their financial decisions, almost one third said they made the decision off the back of information they gathered from friends, family members or strangers,” he said.

“Less than 5 per cent of Australians said they regretted a decision that they made in connection with advice they had received from a finance professional, such as a mortgage broker or financial adviser.”

So why do people continue to take advice from pals and not from the professionals?

It could be they crave the approval of those around them, rather than the stand-offish advice of the guy in the suit behind the desk whom they suspect doesn’t care about their financial wellbeing.

“Those who don’t do their due diligence can often be swayed by what they hear or even how a question is posed,” Mr Flavell said.

Behavioural economist Dr Lionel Page said studies show people will react to a particular choice differently, depending on how it is presented.

“We conducted a field study and asked Australians the same question in two different ways,” he said. “As anticipated, people reacted to the choice in different ways.

“When it comes to making good financial decisions, it is important to look at your options from all angles.

“That way you can be content with your choice.”

For Mr Flavell, that translates into making sure you do wide-ranging research, considering multiple pieces of independent advice, before making financial decisions.

“If you take the time to speak to a professional who will help you research all of your options, you will be less likely to regret the financial decision down the track.”