In my more than 15 years of financial advisory practice, I noticed that many successful people still handle money in an informal way. Instead of working with a trained Certified Financial Planner, they approach friends who work in the finance field. It sounds perfectly logical but this (misguided) belief has led people down the wrong path. 

Why do I say so? Finance work and financial planning are two distinct disciplines. The former studies corporate numbers while the latter dives deep into wealth protection, wealth accumulation and wealth distribution strategies for an individual. 

Finance Work and Personal Financial Planning Are Different

Finance professionals focus on corporate tasks such as preparing company budgets, reviewing financial statements, managing corporate cash flow, handling audit or compliance work, and forecasting revenue and expenses. These skills serve companies well. 

On the other hand, personal financial planning focuses on questions such as: 

• How much protection do you and your family need?
• What is adequate income replacement when you cannot work?
• When will you achieve financial independence? 
• What is your target retirement nestegg?
• What do you need to implement now to supplement your retirement income beyond the CPF LIFE payouts? 
• Are your investment portfolios optimised? 
• Do your investments align with your risk tolerance? 
• Do you have a framework for rebalancing your portfolios?
• How are healthcare costs going to affect your retirement cash flow? 
• How would you like your assets to be transferred to your children?
• Have you considered the ‘what ifs’ that life can bring? 

Most finance professionals do not study these areas or if they do, it will be on a more superficial level than what a financial planner will go through. Personal financial planning studies a person’s life goals, obligations, and long term financial security.

A Story From Real Life

A lawyer in her early forties came to see me. High income, steady career. No shortage of financial opinions around her. She relied on advice from a university friend who worked in investment banking. The friend suggested placing most savings into growth stocks. The advice, at that point in time, sounded reasonable.

Then one day she realised that she did not take into consideration her large financial commitments. Two children in international school, a mortgage on a condominium, and parents who depended on her. Her portfolio was heavily exposed to market volatility while her wealth protection i.e. insurance coverage stood at just 6 months of income replacement. What if a market downturn happens? This would undoubtedly create stress across her finances. Her friend understood markets but her friend did not study protection planning. 

This difference matters. Warren Buffett said, “Risk comes from not knowing what you are doing.”

The Problem With Informal Advice

Another example appeared last year. Vanessa, a senior marketing manager in the tech sector relied on investment suggestions from a colleague in the accounting department. The colleague loved spreadsheets and numbers. Each year he recommended buying different unit trusts. After ten years, Vanessa owned twenty four funds.

All these were absent from her investments:

• There was no strategy to guide the buy transactions
• There was no framework to determine asset allocation
• There was no rebalancing discipline i.e. no realignment done, no optimisation  
• There was no review and very little monitoring of the portfolio year on year. 

As a Certified Financial Planner, we are trained to ask a different set of questions – where do you stand today; where do you want to go; what is your risk tolerance level; what is your investment time horizon; what risks stand in the way. These ‘Know Your Client’ questions are key to helping us recommend suitable investments.

Financial Planning is Holistic

Financial planning ought to be approached from a holistic perspective, and not in a piecemeal fashion. A well thought through financial plan encompasses all vital aspects of planning. This includes protection planning, investment strategy, retirement projections, cash flow management, and estate planning. Each area affects the others. 

And this is why a casual suggestion from a friend rarely considers the full picture.

A proper financial plan connects your income, your expenses, your assets and liabilities, and your long term goals. Without this structure, many people commit to financial products without understanding how each one supports their future goals.

Friends Avoid Difficult Money Conversations

Let’s face it – money talk can be tricky. It is a sensitive topic and even good friends struggle with such conversations. On the other hand, a financial planner is in a position to ask uncomfortable questions. 

Do you spend more than your income supports? Does your insurance structure protect your dependents? Do you carry unnecessary financial risk? Does your current lifestyle delay retirement security?

Friends would avoid these topics because they fear sounding critical. Professional financial planners do not avoid these questions. Our duty is to gather the relevant data as accurately as possible because the outcome of the data analysis will guide us to recommend appropriate solutions. 

Professional Planning Requires Training and Accountability

Financial planning requires continuous study. Regulations change. CPF policies evolve. New investment products are introduced. Professional planners study areas such as insurance design, retirement modelling, portfolio construction, taxation and estate planning. A friend who works in finance rarely studies all these fields together.

Another difference lies in accountability. A friend offers casual advice. A Certified Financial Planner carries responsibility for the advice given. Clients expect structured recommendations, regular reviews, and monitoring of progress.

A Structured Plan Brings Clarity

People who rely on scattered advice often end up with overlapping insurance policies, investments with no clear strategy, unclear retirement numbers, unsuitable estate arrangements, and rising financial stress despite strong income.

A structured financial plan gives clarity. Clear goals. Clear strategy. Clear numbers. 

The right financial planner studies your unique circumstance. From there, a strategy is drawn up based on your needs, preferences and goals. Your financial plan should be built around your life, not someone else’s. 

A Practical Step Forward

Benjamin Franklin said, “An investment in knowledge pays the best interest.”

If you have been getting informal advice from friends or colleagues, pause for a moment and review the structure behind your financial decisions. 

Clarity often begins with a structured conversation. A qualified financial planner studies your full financial picture and helps you organise the moving parts into one coherent plan. When your finances follow a clear structure, decisions become calmer and more confident.

If you would like a clearer view of where you stand today and where your finances are heading, reach out for a conversation. A structured plan often brings the clarity and direction many people seek.