Why, Why Not Have A Financial Plan



Spectrem research shows that 74 percent of affluent investors have a personal financial plan.

That means 26 percent of investors with a net worth over $100,000 do not have a financial plan.

Spectrem’s new study Defining Financial Planning looks at the reasons investors set up a financial plan, as well as the reasons investors do not have a financial plan.

Among the 74 percent of investors who have a financial plan, 83 percent arranged for the plan to be established in order to prepare for the financial needs of their retirement. That is the overwhelming reason investors request a financial plan.

That makes you wonder about the 26 percent who do not have a financial plan. Are they just winging their retirement plans?

The next most popular reason for setting up a financial plan was that investors felt it was an important step to plan for all future financial needs. Forty-two percent of investors set up a financial plan for that purpose.

The only other response given by at least 10 percent of investors surveyed was that they set up the financial plan on the advice of their financial advisor. Seventeen percent set up their financial plan with that as a basis for doing so, and it would be interesting to know how many investors receive that advice and do not heed it.

Only 9 percent of investors who have a financial plan had college planning in mind when they created the plan. Paying for college is on the minds of nearly every investor who has children, and those investors are often looking for the proper way to fund that future need.

Of the 26 percent of investors who do not have a financial plan, there seem to be multiple reasons given. Forty-one percent claim to be able to create their own financial plan, and that may or may not be true, depending on the complexity of their financial status and accounts.

Nineteen percent said the cost associated with the time spent with an advisor to create the financial plan was prohibitive. Thirteen percent said they did not have the assets necessary to require a financial plan, while 11 percent said a financial plan is not useful since there is no way to predict one’s financial future.

But, interestingly, 31 percent said they “just haven’t gotten around to it”, while 16 percent admitted they have no interest in having a financial plan.

An advisor should consider making a suggestion to the investors who do not have a financial plan since it seems an advisor’s suggestion often works.   



©2019 Spectrem Group


Keywords:  financial plan, investors, advisors, Spectrem, assets, full service broker, financial planner