When you hear the term “financial planner,” who comes to mind? Images of wealthy business professionals discussing their stock portfolios come to mind for many. Financial planning seems reserved for the rich and powerful. But let’s take a step back and examine a question on many minds: does the average person need professional financial planning services? The team at M Wealth Group is here to challenge some common misconceptions and state who requires financial advising.
Who is the “Everyday” Person?
The “every day” or “average” person refers to individuals or families navigating typical financial concerns, from managing household expenses and saving for education to planning dream vacations and ensuring a comfortable retirement. They might not have vast investments or complex assets, but they have aspirations, responsibilities, and financial goals like anyone else.
It’s important to note that while everyone benefits from financial planning, not everyone needs a financial planner.
Pursuing Financial Literacy First
Personal finance can seem complex, especially for the average person focused on making ends meet. But money management doesn’t have to be confusing. With some education and guidance, we can all improve our financial well-being.
Most average Americans have dreams of buying a home, saving for retirement, or providing for their families. And while professional financial planners can help optimize money management, you may not need their services if you’re still trying to learn the basics of wealth building. The good news is financial literacy is accessible to all if you make the effort to learn.
Here are positive ways to boost financial health without hiring a planner:
- Learn budgeting basics and spend intentionally
- Start saving small amounts even if you have debt
- Explore free tools to manage bills and track net worth
- Identify ways to reduce expenses and unnecessary costs
- Discuss shared money goals openly with family
- Make mindful decisions on major purchases
We can all gain greater clarity and control over our financial lives with some diligence. As your assets and needs grow in complexity, revisit whether professional guidance could be beneficial. But, improved financial literacy may be the ideal starting point for most average Americans.
Clarifying the Financial Planner’s Role
At the core, a financial planner is your strategic partner for achieving financial objectives. Contrary to popular opinion, they aren’t just stock pickers there to grow your investments. True financial planning is far more holistic, encompassing every aspect of your financial life—from budgeting to life insurance, retirement preparedness, and beyond. Financial planners provide advice and actionable steps tailored to your unique situation to help you save, invest, manage debt, and plan for the future wisely.
Who Benefits Most from Hiring a Financial Planner?
Financial planning can benefit people across different life stages and circumstances. Here are some examples of who may want to consider working with a financial planner:
- Families looking to build generational wealth: Financial planners can help develop strategies to grow assets over decades and transfer wealth across generations tax-efficiently. They can guide estate planning and setting up trusts.
- Those approaching retirement: As retirement nears, a financial planner can analyze income needs in retirement and develop a drawdown strategy for retirement savings. They can also advise on maximizing Social Security benefits and managing healthcare costs.
- High earners: For those with significant income, a financial planner can recommend advanced strategies to optimize savings and investments. This may include setting up tax-advantaged accounts, implementing tax-loss harvesting, and developing a customized investment policy.
- Business owners: Financial planners can work with business owners to build retirement savings through retirement accounts, develop business succession plans, and manage taxes. They can also help owners provide competitive benefits packages for employees.
- Families: Financial planners look at the full financial picture of families and provide advice on budgeting, managing debt, saving for education, and achieving other shared goals. They can help families have productive conversations about money and get on the same page financially.
- The right financial planner can provide tailored guidance to help individuals and families at different life stages achieve their financial goals. Their insight and expertise can be invaluable in navigating major life events and transitions.
Debunking Financial Planner Myths
When it comes to personal finance, there are misconceptions. Let’s tackle some of the top money myths that create confusion around hiring a financial advisor:
Myth 1: You Need to Be Rich to Use a Financial Advisor
Reality: Financial advisors are not just for the uber-wealthy; An advisor is a useful tool for many people with financial goals. Families, individuals planning for retirement, high-income earners, business owners, and more – All can benefit from expert strategic guidance.
Myth 2: Managing Money Yourself with Apps and Tools is Enough
Reality: While apps and tools are helpful, they lack personal customization. A human financial planner provides tailored guidance based on your unique situation and goals. The software cannot replicate this personalized approach.
Myth 3: Financial Planners Are Too Expensive
Reality: View professional guidance as an investment, not a cost. A planner’s strategies and optimized advice can lead to greater long-term savings and portfolio gains compared to a DIY approach. The value derived is well worth the investment.
Myth 4: All Financial Planners Are Salespeople
Reality: Ethical financial planners put your best interests first. They take a goals-based approach to recommend appropriate financial products and services to improve your financial health.
Myth 5: Once You Build a Financial Plan, You’re Set
Reality: Financial planning requires regular reviews and adjustments as life circumstances and market conditions evolve. A good planner helps you adapt your plan accordingly.
The bottom line? Don’t let myths deter you. Knowledge is power when it comes to finances. With the right guidance tailored to your needs, you can take control of your money and build wealth.
While financial literacy is crucial, certain life stages and financial situations benefit from professional guidance to optimize and grow wealth. Financial planners provide customized, ongoing strategies for people across income levels and life phases. With the right advice tailored to your goals, you can take control of your finances and build long-term prosperity.
At M Wealth Group, we’re committed to ensuring every client—no matter their financial status—feels valued, understood, and set up for success.
Ready to redefine your financial future? Chart a course towards prosperity with M Wealth Group. Request an introductory call today, and let us be your compass in financial planning.