Financial Planning Isn’t Just For The Wealthy
This noted Generation X money adviser explains how financial planning is changing to be more accessible fellow members of Generation X, I bear some good news. Financial advisers are not just reserved for the wealthy anymore.
That’s timely, and I think heartening, considering this finding from a recent study by the financial services research firm Hearts & Wallets: “By generation, Gen X exhibits the highest anxiety with concerns about ‘making ends meet this year and inflation.'”
But at this stage in life, we Gen Xers should be laser-focused on what we want and how to achieve it.
So, how do we move forward, conquer our money fears head on and start the new year with fresh resolve?
Get to Know the Financial Planner of Today
For some, one answer might be working with a Certified Financial Planner— an all-in-one financial adviser. Competent financial planners have expertise in budgeting and cash flow, debt management, investments, taxes, insurance, retirement planning, estate planning, and college planning. They may partner with specialists such as CPAs and estate planning attorneys to implement aspects of the comprehensive plans in partnership with their clients.
The goal is to put all aspects of your vision and your financial desires on the table — with no shame, guilt, or fear — to formulate a plan that will enrich your life. A financial planner can empower you to learn about finances, without leaving you feeling insecure about what you don’t know.
Understand the Basics Before Hiring an Expert
Yet only a paltry 24% of Gen Xers use financial planning professionals, according to a March 2021 survey by the personal finance site MagnifyMoney.
Why so few? Many Gen Xers believe they don’t have enough assets or income to qualify for financial planning services and that they can’t afford planners’ fees.
Luckily, there is a sea change underway in the profession.
Registered investment advisers or RIAs are moving away from a minimum asset requirement and towards flat fees and subscription-based fees.
In traditional assets under management models, advisers charge a percentage of your overall annual investable assets to pay for their services. Flat fee and subscription-based models, by contrast, allow for services to be paid from a client’s income.
That option works well for people who are just starting to build their investment portfolio.
The annual fee typically ranges from $3,000 to $10,000 for middle-income households. That may sound steep, but it’s often the cost of one family vacation. And when financial advisers do their jobs well, the fees will more than pay for themselves over time as clients become able to reach their financial goals.
Some financial advisers also take on clients pro bono when those people are in a serious money bind. And some charge hourly fees, which can be helpful if you’re looking for an adviser to help you with one particular financial concern, such as how to pay for college or how to save and invest wisely for retirement.
Getting the Financial Guidance You Desire and Deserve
As you begin your journey interviewing potential financial planners to find the right one, it’s useful to first understand what you’re mostly looking for. Help with investing? Advice to manage debt better? Ideas that could let you retire early?
When you start meeting with prospective planners, ask about the types of clients they are passionate about working with and why. The goal is to find a financial planner with experience helping other people like you and who has a similar philosophy to you about investing risk and achieving money goals.
And there must be chemistry!
You have to feel the good vibes — an alignment with your energy, values, mindset, and culture. You want to feel like your financial planner is in it to win it together with you, anchored in joy, peace, and clarity, and committed to doing the work together.
It’s All About You
Remember: At the center of this journey are you. Don’t let anyone tell you otherwise.
Make sure your financial adviser has the emotional and intellectual capacity to listen, understand and embrace you; to provide clarity on the tradeoffs for making informed decisions; to have the courage to say that something you’re considering doesn’t align with your vision and values and to show wisdom in navigating the next steps.
It might sound strange, but ideally, you’ll want to search for a financial planner to spend your life with. This relationship should be a partnership, a marriage, a covenant between parties, anchored in respect, honesty, transparency, and care, recognizing the economic exchange of time, energy, and money for all parties involved.
Financial planning is a lifelong exploration that lets you examine, with a trusted financial partner, what matters to you, how to fund it and how to pivot when changes occur. The pandemic and social unrest have been great tests.
Looking for this type of partnership? Put your goals at the forefront, ask the tough questions and place your trust in someone who can help enrich your life not just financially, but holistically.