A Secure Path

A Secure Path

Being financially responsible is not always an easy task. We encounter financial decisions – like the following – on a regular basis, and it can be difficult to know which path will help us achieve our goals.

  • How do we invest our savings?
  • How much of our savings should we invest?
  • When is the right time to retire?
  • How are we going to put our kids through college?
  • How much life insurance should we carry?
Savings money for family life concepts.

Luckily in today’s age, we have a number of resources available to us to help us make sound decisions. In this space, we examine different sources individuals are using when faced with financial decisions, and one particular source that is making a positive impact on many households.

Per an article published by the Journal of Financial Planning, households turn to the following sources when faced with financial decisions: the internet, their friends, transactional advisers, or financial planners. According to their research, it was found that consulting a financial planner beat out the internet and friends in leading an individual to make the most grounded and sound decisions when faced with a financial matter.

How are financial planners adding value and guiding households to financial soundness and positive decision making? The article found that it is the holistic nature of financial planning that resulted in more robust, comprehensive financial decisions than those made when consulting with a transactional adviser, friend, or the internet. What is so special about a financial planner is that they practice uniquely for each client; a financial planner recognizes that no two pieces of advice work for the same household because everyone’s story and situation is different. In this vein, universal advice that often comes from a transactional adviser, friend, or the internet, can sometimes be damaging to a household’s financial decision-making process, because the advice does not take into consideration the small details that a financial planner would be aware of because of that personal connection.

As you may have heard us say, we believe financial advice is helpful, but financial planning is magic! Please don’t hesitate to connect us as you navigate life’s journey – you don’t have to face those financial decisions alone.

Sources

  1. Blanchett, David M. 2019. “Financially Sound Households Use Financial Planners, Not Transactional Advisers.” Journal of Financial Planning. Retrieved from https://www.onefpa.org/journal/Pages/APR19-Financially-Sound-Households-Use-Financial-Planners-Not-Transactional-Advisers.aspx
  2. Lusardi, Annamaria, and Olivia S. Mitchell. 2014. “The Economic Importance of Financial Literacy: Theory and Evidence.” Journal of Economic Literature 52 (1): 5–44.