#10. Financial Planning is only for the wealthy. If taking control of your financial life is NOT for you, then you’re probably right. However, regardless of your income or the amount of assets you have, financial planning applies to all stages of one’s life—from the stages of accumulation of assets and investing to the latter stages of retirement and the distribution of your assets.
#9. Financial Planning only involves investments. Totally false! Financial planning considers your entire financial picture including your investments, but also your tax situation, insurance needs, retirement strategy, and estate planning, to name a few.
#8. Financial Planning only needs to be done once or on an occasional basis. Again, this is false. The purpose of financial planning is to help you achieve your goals and monitor your progress toward them as your personal circumstances change—birth, marriage, divorce, death, college planning, job change, inheritances, etc.
#7. Financial Planning only needs to be done just prior to retirement. This couldn’t be farther from the truth. Financial planning should begin long before retirement. The sooner you start understanding and taking control of your financial life, the higher the likelihood of success and the more options you are likely to have. In other words, “Don’t just stand there, do something!!!” before it’s too late.
#6. Financial Planning entails the same cookie-cutter approach for everyone. No one person’s situation is identical. All financial planning should be personalized and customized matching each person’s specific goals, objectives and challenges to their required solutions.
#5. Financial Planners’ background, disciplinary history, and educational credentials are difficult to obtain and are not regulated. False! In fact, as a CFP® professional, not only are we regulated by our own Board of Directors, we are required to abide by a Code of Ethics and receive ongoing ethics training. We are also regulated and overseen by state and/or federal securities’ agencies, making our background and disciplinary history available for public review.
#4. Financial Planners are legally allowed to guarantee investment results. We are not permitted to guarantee a rate of return on your investments. Doing so, would be against the law.
#3. Financial Planners are the same as stockbrokers. Stockbrokers sell investments and make money based on the number of transactions YOU make. As a CFP® professional, we are not compensated based on the number of transactions you make or by the product you purchase. This allows us to remain as objective as possible REGARDLESS of the number of transactions made or the investment product selected.
#2. Financial Planners will not keep my sensitive information private. Wrong again. Our company has a strict Privacy Policy. In fact, unless required by law or in order to conduct business, your information will not be disclosed without your express, written consent.
And the number one misconception about financial planning…
#1. Financial Planning is something I can do on my own. This is the most dangerous misconception of them all. A 2006 study by the Consumer Federation of America and NationsBank found that households with incomes of less than $100,000—the majority of Americans—reported saving and investing double the amount when they had a financial plan in place than when they didn’t.
