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It would be perfectly natural if your reaction to the title of this blog post was something along the lines of, “A Certified Financial Planner telling me I need a comprehensive financial plan…surprise, surprise!” Maybe you’ve been told by other financial ‘professionals’ that you needed to buy their product only to find years later that you were sold a bag of goods you didn’t need.
Well, I ask that you keep an open mind because I really do believe that having a personalized comprehensive financial plan MUST become the norm in our society. Why?
Let’s look at this graph of what life tends to look like for many people. Everyone’s situation is going to be different, obviously, but this graph looks at major life events that result in a large financial commitment.
Source: Honey Lake Advisors
The higher the lines go, the bigger the financial need you have at that particular moment of your life. For example, getting married typically unleashes a number of new financial needs in a relatively short number of years.
What’s clear about the above graph is that there are a number of different financial needs we will face during our lifetimes. Those needs differ depending on what stage of life we are in, but no matter the age, there’s almost always some sort of life event happening that needs our financial resources.
The Need for Personalized Comprehensive Financial Planning
So why am I so passionate about the idea that everyone needs comprehensive financial planning? Look at these statistics about the current state of financial affairs in America:
- 70% of Americans live paycheck-to-paycheck, according to a number of studies
- There is nearly $1.5 trillion in student loans outstanding, more than double the amount just 10 years ago
- 1/3 of Americans have no retirement savings at all, according to the Federal Reserve
As a society we are not doing a good job of preparing for our major financial needs. The consequences of this go well beyond dollars and cents. Money problems are one of the leading causes of divorce in America. Likewise, young adults are entering adult life after college with crippling levels of student loan debt, which impacts their plans for getting married and buying a home.
There are any number of reasons why this is all happening, but I think the overriding issue is what we saw in the graphic on the previous page – there are a lot of moving parts in life and trying to manage our finances can be overwhelming and complex.
A Personalized & Comprehensive Approach to Financial Planning
“Personalized Comprehensive Financial Planning” is a mouthful to say but important to understand. There are two words that I’d like to focus on.
Personalized: Every person and family is different. While the general path of our lives may look similar, there are always nuances which make each family’s situation unique. Many big financial companies offer financial solutions to bits and pieces of our financial lives but not the whole picture, and oftentimes they take a cookie-cutter approach to solving our problems.
A Certified Financial Planner, on the other hand, works with you one-on-one to understand the big picture of your life. We take into account what life stage you are in, your family makeup and the financial resources you have. Your plan is tailored to your unique situation, and you get the attention to detail that you deserve so you can rest knowing that all of your unique needs are being addressed.
Comprehensive: Have you ever had a chance to vacation at an all-inclusive resort? You buy your airline ticket, reserve your room at the hotel, and you’re done. No worries about where you are going to eat or what you’re going to do. Just a truly relaxing vacation with everything taken care of for you while you’re at the resort.
Working with a Certified Financial Planner is like going to the all-inclusive resort. We take a comprehensive approach to identifying and prioritizing all of your life goals and look for ways to protect you in the event something unexpected happens. The plan you get equips you to start tackling your goals proactively. Best of all, we help you put your plan into action and monitor your progress for you, increasing your chances of success.
Bringing it all Together
As my crude graphic demonstrates below, working with a Certified Financial Planner helps you untangle all of the moving parts of your financial life and then organizes everything into a PLAN.
Ideally, the person you work with will explain everything to you in plain English. Managing your entire financial picture is complex but it’s not rocket science. Having a plan that is simple and easy to understand will help you stay committed to it over the course of your life.
About the Author
Robert Stoll is a CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Financial Analyst (CFA) serving the financial planning and investment needs of clients through his firm, Honey Lake Advisors, LLC (“HLA”). He has over two decades of investment management experience and is committed to helping people realize the full potential of their financial resources.
Do you know XYPN advisors provide virtual services? They can work with clients in any state! View Robert's profile