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Need Help with Financial Planning? See a Financial Consultant By Mark E. Dixon
Nearly two-thirds of Americans (63 percent) rely on themselves, friends, relatives or business associates for most information about financial planning decisions, according to a recent national survey conducted for the American society of Chartered Life Underwriters (CLU) & Chartered Financial Consultants (ChFC). In fact, nearly four in 10 people don't ask advice from anyone. Here are some further thumbnail facts and figures. Older people are the most confident of their own abilities; nearly half of those in their critical preretirement years (55 to 64) rely solely on their own financial knowledge. A third of those aged 35 to 44 do this. Fewer men than women request help. Of males, 43 percent manage their money without professional advice, compared with 35 percent of women. Some folks (26 percent) do seek the advice of professionals, such as accountants/CPAs, bankers, employee benefit specialists, stockbrokers, attorneys, and life insurance agents. Unfortunately, even those trusted advisers aren't necessarily qualified to do your total financial plan. So, consider consulting a qualified financial planner, one with a professional designation such as Chartered Financial Consultant (ChFC). These professionals approach your financial planning with a perspective similar to that which an orchestra conductor brings to a group of musicians. Just as a conductor isn't hired to play the violin, oboe or drum, a financial planner's primary role is not to sell you life insurance, write your will or recommend stocks. (Although a few planners might do some of these things.) Instead, a financial planner is a coordinator, bringing together various elements to produce a coherent whole. Financial planning cannot be done in a vacuum. too often, each area is turned over to separate advisers, each with little knowledge of what the others are doing or have already done.
It's far from a reasonable concern. Financial resources that for many years remained tried and true now seem less reliable. Many employers have shifted their retirement programs from company-funded pension funds to 401(k)s or other plans funded primarily by the employee. And while Social Security probably won't go away, it will supply a smaller proportion of needed income. At the same time, investment options have become more diverse and complicated. A 401(k) may have as many as 20 different investment options. Thirty years ago, mutual funds were few and far between. Now, there are thousands of them, each with its own investment strategy and goals. In addition, the new tax code, while delivering some breaks, has complicated financial planning for many people. For instance, the capital gains tax, while lower, includes multiple tax rates with many conditions, exceptions and exclusions. All this worsens the potential consequences of financial mismanagement, says Miller. Want to read the rest? Message me at mark.dixon@att.net, include your postal address and I'll send you a reprint of the entire supplement. Or send me your FAX number and I'll zap it right over.
 Mark
E. Dixon
757 Upper Gulph Road
Wayne, PA 19087-2022
USA
610-971-0649
dixon_mark@verizon.net
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When you need a
house, do you build it yourself? Do you service your own car? Grow
your own food? Make your own clothes? No, you rely on builders,
mechanics, farmers and tailors. From your own experience, you know that
experts are best able to provide these necessities -- and your time is best
spent managing your company, department or practice. this same logic also
applies to financial planning; unfortunately, most Americans don't get it.
"Comprehensive
financial planning is more complicated -- and more of a necessity -- than ever
before," says Indianapolis-based Edward H. Miller, III, CLU, ChFC,
president of the American Society of CLU & ChFC. "A number of
demographic trends show us that people are saving less and living
longer." The latest figures show that those who survive into their
sixties have a roughly 50 percent chance of living into their nineties!
Coupled with the increasingly common goal of early retirement -- sometimes in
the mid-fifties -- many people may live for 40 years after they've stopped
working. "We used to worry about dying too soon," says
Miller. "Now, we worry about living too long and running out of
money."