“Do you have a financial plan?”
The question to affluent investors is almost a buzz phrase among financial advisors. It creates a need among client; those without a financial plan feel they are avoiding an important investment step, while those who have a financial plan wonder if theirs is sufficient and up-to-date.
The problem that exists with the term “financial plan’’ is that it is undefined in the industry. The elements of one provider’s “financial plan’’ might not correlate directly to the elements of another provider’s “financial plan”.
The confusion that exists over the term “financial plan” is the reason Spectrem conducted its current study titled Defining Financial Planning. The study examines why some investors have a financial plan, why others do not, and exactly what investors believe should be in a financial plan package of products and services.
The study also asked investors a set of specific questions surrounding the entire concept of a financial plan. These questions do not fit into a definite category of research, but examine some of the specific motivations that trigger the desire to have a set of financial goals and a process for working toward them.
Defining Financial Planning asked investors to respond “Yes” or “No” to the following statements, and found:
· 71 percent of investors prefer an ongoing financial plan instead of a static one. This shows that a sizable majority of investors want a regular process of updating their financial plan for their current household financial needs.
· 63 percent of investors have determined definite and specific financial objectives which they want their financial plan to address and work toward. This makes a relationship with such a client easier and more difficult at the same time; easier because details are spelled out, but more difficult because it is simple to see whether those goals are being properly met.
· 62 percent of investors prefer to deal with one financial advisor when discussing their financial plan, rather than hearing from a variety of financial “experts’’. These investors do not mind having their advisor consult with others on matters related to their portfolio, but prefer to have one voice to discuss all household financial matters with.
More details about the study Defining Financial Planning are available at spectrem.com.
©2019 Spectrem Group
Keywords: financial plan, investors, advisors, Spectrem, defining, expectations,