What is Not Financial Advise?
If you’ve been running in the cryptocurrency space for a while, you’ve probably seen people giving tips or insights about certain crypto assets but end their post with “Not financial advice”. The post seems like financial advice on digital assets, but they choose not to claim it as such – what’s up with that?
Read on to learn what exactly “not financial advice” means in crypto!
What Does “Not Financial Advice” Mean?
The term “not financial advice” simply means that whatever post that precedes this disclaimer isn’t financial advice. This is typically used as a disclaimer because these individual investors don’t mean to provide financial advice – even if their post reads like it.
This disclaimer is usually used by three types of people:
- The person is simply posting their opinion on certain crypto investments, not intending for anything they say to be taken as advice.
- The person has made an investing mistake in the past, and they don’t want people to repeat it – which is why they tell people how to avoid making these mistakes.
- The person is actually dispensing investment advice on crypto assets and is just trying to avoid responsibility in case they make misleading statements.
Are These Disclaimers Important?
When you sign a contract with a lawyer, they’re responsible for any action you take under their advice. The same goes with legitimate financial planners and advisors who may have a clause in their contract that makes them responsible for any financial decisions taken under their advice.
However, most people who say “not financial advice” are strangers on the Internet saying their piece about certain digital assets. Generally, there are no legal consequences to giving out advice that doesn’t work out well as an outsider. That said, there may be other consequences like the person being angry at you or other personal sanctions.
What Do Real Financial Advisors Do?
So, how do real financial and investment advisors help you, anyway? Here are four ways that advisors from financial institutions can help build your finances:
Create A Roadmap For Your Financial Goals
First and foremost, a financial advisor helps you achieve your financial goals. The first meeting with a financial advisor usually entails defining a financial goal so they can plan out steps on how you can achieve that.
Assess Your Financial Situation
As part of reaching your financial goal, an advisor usually takes a look at your financial statements. This means they’ll examine your asset allocations, recent financial transactions, outstanding debts, and expenditures. Analyzing your records helps them build a financial profile of you: how much you’re worth, your spending habits, and other factors related to money.
Recommend The Right Investments
Your financial goals and risk tolerance are usually linked to your investment portfolio. Financial advisors can recommend the best investment vehicles to help you reach those goals. They can tell you all about the relevant risks and rewards you get by choosing a certain investment vehicle.
For instance, if you’re planning to save for retirement, you may get recommendations for low-risk long-term conventional investments. Conversely, if you have a high-risk appetite and need short-term gains, you’ll be directed to more volatile stocks or crypto.
DYOR: Be Your Own Financial Advisor
The disclaimer “not financial advice” used in the crypto space doesn’t exactly inspire trust in a reader. However, professional financial advisors also cost money.
So, what do you need to do to get good financial advice? Be your own financial advisor, of course! The key to making your own financial decisions is to DYOR – research all you need to know so you can make informed, well-reasoned calls through a real understanding of the topic.
Here are three things to do if you want to DYOR before putting money in cryptocurrencies:
Know Who To Trust
You can get information on thousands of cryptocurrencies from everyone in the crypto community these days. However, you can’t trust a vast majority of them. To ensure you only get the most relevant information, you need to know who to listen to in the first place.
Some factors that make up a good source include:
- A track record of giving reliable information
- A solid following and an active community on social media platforms
- Provides unbiased information – this usually means no sponsored or paid information
Find Different Angles
Even if you’ve found a source for crypto information that you trust, it’s not a good idea to limit your horizons. Look into more trusted people or websites that provide a different opinion on your favorite digital coins and get a balanced perspective on things.
Dive Deep Into The Coin’s Facts And Figures
Buying a coin simply because of hype generally results in disappointment. Before buying, always look into the coin’s white paper and find out how seriously the developers take this project. Projects with a wider utility and a more experienced team usually have the best fundamentals and make for a good investment choice.
Crypto investors typically use “not financial advice” because they just wanted to voice an opinion or help people avoid the mistakes they made. If you’re looking for legitimate financial advice, hire a financial advisor or DYOR.
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