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Financial Choices- When More Can Mean Less

December 3, 2014

Most of the time, I love choice. But honestly, some of the time, I wish there was less!too many choices

That’s how I feel when I walk into my neighbourhood paint store hoping to choose the perfect new colour for my living room. That’s how I feel when given a 10 page menu of healthy, delicious entrees in a trendy restaurant. Funny how these are two activities I typically enjoy. Not so funny how the endless choices make me want to escape before I decide!

I will hazard a guess that this is how many of us feel when it comes to finances.

In the wonderful world of finance, there’s an overwhelming array of choices; bank accounts, credit cards, mortgage options, financial advisors, institutions, investment products etc. Better yet, everyone (even the experts) have opinions that are all over the map. Yikes; no wonder people don’t know where to begin!

Here’s what’s wrong with our financial environment today;

____________Financial Industry______________                         ___Consumers___

Too Much Choice + Different Opinions + Lack of Trust       =         NO PROGRESS

There’s hope!

Being smart with money is more about getting the basics right than getting the products right, especially when we’re young. Is our choice of credit card, bank account or financial institution really going to impact our nest eggs over the long run? It’s not that products don’t matter. It’s just far more important to find a good strategy, stick to it and choose simple solutions to grow/protect our wealth. Paying attention to our behaviour around money is equally (or more) important than watching the progress of our investments. Taken together, these things are a very powerful force.

When you’re up for it and at your best, the power of choice is a wonderful thing. When you’re not, it’s completely daunting. When the subject matter is not popular or interesting, it’s even worse!

For more on the research behind choice and decision-making, here’s a great article from Business Insider (an easy and enlightening read);

Cutting Down On Choice Is The Best Way To Make Better Decisions

Maybe the financial industry will begin to listen? I continue to be amazed by the ever-expanding list of financial products and services available. This strategy is certainly keeping us financial experts well-employed! However, I’m not sure it’s doing much for our industry to improve the public’s trust?

Instead of introducing yet another suite of ETF’s or mutual funds, maybe the industry could help facilitate and simplify consumer decisions. Make people want to take action on their finances, not run away! Narrow the choices, bundle the options, make products and decision-making easier? There must be a better way? A smarter route to industry profits is to keep customers happy, educated and growing their wealth through wise and simple decisions.

Your thoughts are always welcome!

Related Posts:

Building Wealth One Step At A Time

Paying Attention To Your Money Makes A World Of Difference

Investing- 4 Tips To See The Forest Through The Trees

Proud founder of this blog Let’s Talk About Money, Patricia Gass, CPA, CA, provides personal finance coaching and education to improve your money skills. Follow her on linkedin, twitter or pinterest.

 

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One Comment
  1. iThinker permalink

    Reblogged this on INVEST-O-MONEY.

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