With professional financial advisors deemed to be out of reach, too expensive, or unknown to the majority, many turn to those close and dear for advice on big financial problems: saving for children’s education, to buy or build a house, planning for retirement, etc.

Despite their best intentions, these people may not be the best choice to offer financial advice, and here’s why.

  1. Your Family members, Close friends, and Co-workers

In our times of need, we always turn to family and close friends for advice. We spend over 8 hours daily with co-workers, some of whom become friends, and we turn to for solace. However, financial advice from family and friends can sometimes be a recipe for disaster. Despite their best intentions, friends are not experts, making their advice subjective not quantitative. Plus, what may have worked financially for a friend may not necessarily work for you. And even if they are actual experts in the financial field, there is loss of objectivity due to proximity.

  1. People with more money than you

With a lot of time spent on social media, there is a temptation to take financial advice from those who appear to be doing financially better than you. The thinking being that if they appear to be successful then they must know what they are talking about. However, in this age of social media perception is king and appearances are queen. Meaning that most are concerned with projection than reality. The fancy lifestyle they showcase may be propped up with debt, illegal earnings or a massive inheritance. So, beware.

  1. People Who Sell Financial Products

Those who earn on commission may have reason to push for a financial product as it helps them earn a living, and not because it is what is best for the person seeking advice. You should be wary of anyone who only seems to be interested in closing a sale rather than taking account of your overall financial situation. Financial advisors make their money by charging fees for their services rather than taking commissions for selling products.