What Do You Offer In A Financial Plan?



Spectrem research shows that three-quarters of all investors with a net worth over $100,000 have a financial plan.


Does that mean the 74 percent all receive a statement of net worth? Do they all receive estate planning?


The answer is a resounding “No”. The services and products offered in financial plans is different based on which firm provides the plan, and when a client asks for his or her plan to be customized in any way, that plan becomes unique onto itself.


Spectrem’s new study Defining Financial Planning takes advisors and providers through the laundry list of services and products wealthy investors receive in their financial plan, but also delineates those services and products those investors do not receive but wish they did. The list of services desired is almost always longer than the list of services received.


“The purpose of the study is to determine what the words ‘financial planning’ means to investors and to allow advisors and providers to determine just how closely they are hewing to the investor definitions in the plans they offer,’’ said Spectrem president George H. Walper Jr.


According to Defining Financial Planning, the component most investors receive in their financial plan is retirement planning (81 percent), followed by investments (75 percent). Note the converse of those points: 19 percent of investors who have a financial plan do not receive retirement planning, and 25 percent do not receive investment strategies.


However, 95 percent of all investors believe they should receive retirement planning as part of their financial plan, and almost all (96 percent) investors believe they should receive investment strategies in their financial plan.


Perhaps the most telling research findings come in comparing the services received versus the services desired and determining which components advisors and providers are most frequently disappointing investors.


Keep in mind that investors believe their financial plan should include everything that matters regarding the progress and complexity of their financial intentions. Of 12 possible components in a financial plan, at least 90 percent of investors want eight of those components in their plan, and no component is offered or provided to 90 percent of investors.


For example, 93 percent of investors believe their financial plan should include estate planning recommendations. But only 41 percent of those same investors say they receive such services in their current financial plan.


A factor in the services and products received in a financial plan is the cost of that financial plan to investors. Are investors willing to pay for a plan that includes all 12 suggested components? That is a negotiation that must occur between the investor and the advisor as a financial plan is devised or reviewed.



©2019 Spectrem Group

Keywords: financial plan, Spectrem, investor, advisors, estate, investments,