Many times, we require advice or recommendations from others in order to make a decision on some aspect of our life. We receive opinions based on others’ expertise and experience in order to help us decide a course of action. On many occasions, the person we ask advice from has professional expertise and a formal education, which then qualifies them to provide us with the advice. This is the case with personal finance as it is with our professions such as medicine. When accepting professional advice, a challenge is having a foundation of knowledge that provides enough data to process the information necessary to make a decision that is right for you and your unique situation, goals and priorities. This requires education, which is the general knowledge necessary for reasoning and judging, and for understanding the implications, pros, cons and consequences of a decision.

Why is it important to understand the difference? Because financial education was not formally taught to people who are already established financially today. We developed our knowledge on the job and, therefore, in many cases actually lack the foundation of knowledge necessary to confidently make a financial decision. Worse, however, is that most people who are established financially are not even aware that they don’t know what they don’t know. This means that the uncertainty and intimidation that creates skepticism from financial advice is really a clue that there is a knowledge gap. This is not necessarily in the product or service or advice being inappropriate, fraudulent or unrealistic. It is important to be aware that the financial marketplace has become more complicated and, therefore, requires more knowledge. Fear, uncertainty and doubt are good indicators that perhaps there are additional questions that need to be asked, not necessarily that the advice isn’t good for you.