Americans are financially stressed out. But very few are actually paying for financial help. Many of these people could benefit from hiring a quality fee-only financial planner.
Think it’s not affordable? Think again. Basic financial planning services run about the same cost as cable TV – and 50 million+ people have cable TV. Which service do you think Americans need more?
What is Financial Planning?
When I talk about hiring a financial planner, I am talking about hiring someone that you pay directly in exchange for financial planning services. Their job is to help you create your financial plan and stick to it. They help identify and correct inefficiencies along the way. The planner’s incentive is to provide advice that’s worth more than the fees you’re paying so that you will continue paying them.
The “free financial planner” does not count. Although it may appear this way, this financial planner does not really work for free… they work for the product manufacturer and their job and incentive is to sell more of that product.
If you don’t already work with a planner, here are eight reasons you should consider hiring one in 2016:
1. A financial planner will work on your side of the table and fight for your best interests – aka they’ll act as a fiduciary. Unfortunately, only a fraction of planners promise to work in your best interest – make sure to ask if he/she is a fiduciary before you hire! In a world where everybody is selling everything and transparency is rare, you need more people fighting for your best interests.
2. A financial planner will save you time instead of wasting it. Have you ever sat down and figured out what your time is worth? Or how much time would it take you to figure all this stuff out? And then create your own financial plan? It took us thousands of hours to learn the academic side… and a typical financial plan takes at least 10 hours per year (and I suspect we are much faster at preparing them than you are).
3. A good financial planner will pay for themselves. We often find it easy to quantify our value > than our costs within the first few meetings with a new client. That’s not even considering the values that are harder to quantify, such as that of long term planning, time savings, accountability, etc. How many of your monthly expenses pay for themselves?
4. A financial planner will reduce your financial stress and increase your financial confidence. Most Americans are struggling here and desperately need help. Wouldn’t it feel nice to wake up in the morning and know you’re on the right track to financial peace?
5. A financial planner provides rational and objective advice. They are able to remove the emotional aspect of financial decision making. Most people I know get emotional and irrational about their own money and could use a little objectivity.
6. A certified financial planner has spent thousands of hours studying finance and planning. They have thousands of hours of experience working with people and their money. You can leverage this powerful resource for near the same amount as your cable bill.
7. A financial planner will provide accountability. You may have a general idea of the direction you need to be moving and the choices you need to be making, but who is encouraging you to get them done? Who is reminding you of the importance of these decisions and actions? Who is checking up on you to make sure you’re making progress? For many, the answer is “no one”…
8. A financial planner will allow you to focus more on the most important things in your life. I’m sure there are countless things you’d rather be doing than dealing with your finances. Whether it be spending time with your family, traveling, going to sporting events.. let a planner take some things off your plate and free up room for you to do what you enjoy.
I believe everyone could benefit from hiring a fee-only financial planner – even financial planners themselves. I am taking this advice to heart. One of my 2016 goals is to hire a financial planner to work with my wife and I. For me, it’s not about the knowledge – it’s about the accountability, objectivity, and emotional aspects. Just like every doctor should have his/her own doctor, every financial planner should hire a financial planner.