He said many Australians believe they can sufficiently educate themselves on money matters online, but likened this approach to using the Internet to self-diagnose medical conditions. Just as using Doctor Google rather than a real GP could be disastrous for one’s health, Loxton says investors making decisions guided by online advice could potentially cripple their financial health by putting their life savings at risk.
“The adage that too much knowledge can be a dangerous thing rings true when it comes to DIY investors who make decisions based on online recommendations and information, and yet the industry is starting to see a growing number of investors facing financial ruin by going down that very path,” he told Money Management Magazine.
He went on to explain that the easy access to online financial tools has convinced many Australians there is no longer a place for professional financial advice. However, he says this could not be further from the truth. He also added that making an investment mistake after receiving online advice can be much costlier than many other digital mishaps.
“This is not like spending time online to find that perfect holiday destination, only to discover it has no running water and backs onto a garbage dump when they arrive,” he explained. “The risk is far, far greater for DIY investors because a wrong decision can ruin their financial futures — and we already know that people are pre-disposed at badly investing their earnings because they are driven by emotion rather than logic.”
Loxton’s words are a timely reminder of the continued importance of professional advice in the digital age. If you need money advice, call the financial experts at Chase Edwards on 1300 854 833. With a decade of experience in the financial industry, we can guide you in making a well informed decision on how you can:
- Reduce your current home loan
- Potentially reduced the amount of tax pay
- Create wealth for a comfortable retirement