7 Excuses for Not Hiring a Financial Planner
Hiring a financial planner isn’t for everyone. However, it’s important to consider if the reasons you’ve decided not to consult a planner are truly serving you and your family’s financial future. You think you’re saving money, or you think you can do it yourself, so why bother, right?
The problem is you don’t know what you don’t know and those excuses could be costing you financially.
We’ve uncovered the 7 common excuses for not hiring a financial planner and why they could be harming your family’s financial future.
1. I’m Not Clear On What They Even Do
A holistic financial planner provides advice on all the areas of your financial life. What does this process look like? A rough idea might be…
Create Your Life Vision: Ask deep open ended questions to explore who you are (values, dreams, goals) and what you want out of life (i.e. the big picture). Create a Life Vision that inspires you today and gives you an exciting vision to work towards for the future.
Quantify That Life Vision: Determine how much that life vision would cost to bring to life (i.e. financial goals).
Assess: Review the pros and cons of different financial paths you can take, then identify one that gets you there as efficiently as possible (given your values, goals, income, etc).
The Financial Plan: Create a financial plan that acts as a road map of recommendations and next steps so you know what you need to do next to start making that vision a reality.
Be Your Guide Along the Way: From here it’s time to start implementing the financial plan. Having a planner means you always have someone to ask questions to, update the plan for inevitable life changes, act as a coach, accountability partner, a guide, someone who is proactively looking over your finances and looking out for potholes so you don’t have to, someone who genuinely wants to see you prosper. Someone you meet with regularly each year to ensure your financial plan stays on the train tracks.
2. It Costs Too Much
Financial planning is not a cost, it’s an investment. My parents squandered $600,000 by not working with an adviser. By this point my parents would likely have been millionaires instead of scraping by month to month on social security if they had worked with an adviser from the get go. Whatever a planner costs, they should be delivering some multiple of that cost in the value they provide to you over the long term (and that’s just in dollar terms, it doesn’t factor the emotional benefits, time saved, etc).
All people see is the cost of action (time or cost today to get their finances in order) and not the subtle but vastly larger cost of inaction (which compounds over time). A holistic financial planner helps educate you now, not later, on the moves you’re making and the tradeoffs of doing so. They can advise you on how a certain priced home can impact your ability to afford other things you value. Or, if you’re a young family, help you create a financial plan that acts as a road map to financial security, more time with your kids, paying for education, etc. Being able to see the pros and cons of each option now helps ensure you don’t make a decision that hamstrings you financially in the future.
There are financial planners out there for practically all budgets. Do your research and find a holistic “fiduciary” financial planner (i.e. a planner who does far more than just invest your money for you) that fits within your budget.
3. I’m Not Wealthy Enough
While some firms only work with wealthy individuals who have at least $1,000,000 to invest, many firms (my practice being one of them) works with people regardless of how much they have to invest (because real financial planning is so much more than just investing your money). Seek a planner that fits your life stage and financial situation. For instance, I work with young families & professionals in their 20’s, 30’s, and 40’s, other advisers may only work with folks are age 50+. Some work on a flat monthly fee, others a sliding income scale, and others a percentage of assets managed for example. Knowing what you need and finding a financial professional that fits those needs is what’s important, as this isn’t a one-size-fits-all approach.
4. I Can Do It Myself
I concede, this one is technically true. You probably can do it yourself with enough time, interest, and knowledge. You can also do all your own car repairs too with enough time, interest, or knowledge on the subject. But be honest with yourself, will you? Will you devote the time to set goals, educate yourself, evaluate important financial decisions, monitor your progress and adjust as needed? Most of us will not. It is too easy to get caught up in day-to-day life to think about our own future at the big picture level.
To those who do have the time, interest, or knowledge to manage their own finances, consider this. We all have blind spots, it’s important to remember we don’t know what we don’t know. When you’re dealing with your own finances, it’s easy to get emotionally involved and make rash decisions or stick to cognitive/behavioral biases that could end up costing you. Having an objective (& knowledgeable) third-party as a 2nd set of professional eyes to look over your entire situation, talk you off the ledge when your investments go down, and help you see options you otherwise might not have seen could end up being big difference makers for building wealth.
5. I Don’t Have the Time
You might think of dealing with a financial planner as a chore you don’t have time for. A good financial planner will save you time in the long run, increase confidence in your financial situation, and help you manage your finances intentionally and proactively, not reactively. A car mechanic will probably fix your car in less time and do it better, the same is true for a good financial planner.
Yes, you might have to spend some time talking to a planner upfront as they get to know you, your income, assets, liabilities, and financial goals. But once you get going, there’s little time commitment for you. That’s the benefit of working with a financial professional. You get a “financial coach” essentially to help you brainstorm and prioritize your goals and life vision, you provide all your financial data, then step back while your planner creates the plan and provides all the recommendations and next steps. Working with a financial planner not only saves you time in the long run, it helps you avoid mistakes, gain peace of mind, and feel confident your family’s financial future is being planned for thoroughly.
6. Financial Planners Are Too ‘Salesy’
Generally there are two sides of the adviser industry.
The Commission Based Adviser: Unfortunately, this side of the industry is still very common. These advisers tend to sell financial products that earn the adviser a hefty commission when people buy them.
“Fiduciary” financial planners: A “Fiduciary” means that the adviser is legally obligated to give advice that’s in your (the client’s) best interest, rather than giving advice just so it can lead to a sale. They generally charge a flat fee or percentage of assets rather than earn a commission. Think of this as paying for advice, not products.
No one likes to feel like they’re being “sold to” or pressured. They want to feel like the advice they receive is truly in their best interest and know the way their adviser is paid aligns with their own best interests. A holistic financial planner provides advice on all the areas of your financial life to help bring your financial goals to reality. It’s not about advising you on just one area (i.e. insurance) where they can earn a hefty commission selling a product to you without knowing the bigger picture (i.e. the other areas of your financial life).
7. There Are Too Many Choices
Some people avoid using a financial planner just for the sheer number of choices they are presented with. If you don’t like to make choices or don’t understand the options given to you, it’s easy to get overwhelmed. Consider the following steps:
Choose 2-3 “Fiduciary” Financial Planners to interview.
Set up a free introductory call with each planner to learn more about how they charge, what exactly they do and don’t do for you, etc.
Choose a planner that you feel comfortable with personally, they fit your budget, and you feel aligned with the services they’ll be providing.
Working with a Fiduciary financial planner is generally a more transparent “non-salesy” experience, the adviser is interviewing you at the same time! If it isn’t the right fit, a good planner will happily to refer you out to another adviser who is an appropriate fit for your situation. A good financial planner should explain their options to you clearly so you can make a choice that make the most sense for your financial situation.
Final Thoughts
If you use any of the excuses above for not hiring a financial planner, consider if those narratives are truly serving your family’s financial future. There are many options out there today for people of virtually all income and asset levels. You don’t have to be rich to use a financial planner and even if you think you can do it yourself, you might be surprised to learn how much better, easier, or more thorough it is with a professional by your side.
If you’re interested in learning more about what a “Fiduciary” financial planner can do for you and your family…
Schedule a free 30 minute introductory call with me here
Together we can explore “you” in a way that’s deeper than dollars and cents, and start a conversation to get you and your partner on the same page financially. I’m here to help you create a life vision, then make the money moves necessary to bring it to life. You can live for an epic life today, while still being on track for tomorrow.
Jonathan Grannick, CFP®
Wonder Wealth LLC
San Diego Financial Advisor | Fee-only Fiduciary
Disclosure:
None of the information provided is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement, of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. The content is provided ‘as is’ and without warranties, either expressed or implied. Wonder Wealth LLC does not promise or guarantee any income or particular result from your use of the information contained herein.