Kay Allen with Aspen Wealth Management Issues Commentary on Recent Household Financial Planning Survey

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"Now more than ever, there is a real need for comprehensive financial planning," reports Kay Allen with Aspen Wealth Management. Several studies in 2012 indicate that Americans lack basic financial knowledge and processes which results in an overall lack of confidence in their financial future.

Kay Allen, CFP® http://www.aspenwealthmgmt.com supports the release of the Consumer Federation of America and Certified Financial Planner Board of Standards, Inc. national Household Financial Planning Survey.

  •     Only 31 percent of household financial decision makers have a comprehensive financial plan, but nearly two-thirds follow a plan to save for at least one of their financial goals.
  •     More families with college-bound children were saving for higher education in 1997 than in 2012.
  •     The percentage of household financial decision makers with a retirement investment plan has largely remained steady over the last 15 years at about 50%.
  •     In light of the financial crisis and its aftermath, financial decision makers’ comfort level with financial matters is low. 55% report not knowing whom to trust for financial advice. And 52% find investing complicated.
  •     50% of financial decision makers who planned to retire before 65 have had to significantly reevaluate their expectations for retirement.
  •     38% of financial decision makers felt behind on retirement savings in 1997 while 51% in 2012 feel behind.

“There is no doubt that the recession and the slowly recovering economy has left many Americans struggling more in recent times than in the past,” says Kay Allen, CFP®, “but it doesn’t have to be that way.”

The survey indicates that those who have prepared a personal financial plan feel more confident and report more success managing money, savings and investments than those who have not.

A comprehensive plan is accomplished when a professional financial planner and client develop a relationship built on mutual trust and respect. At a minimum, the plan needs to include the following:

  •     A shared understanding of the clients’ goals, values, and philosophy with regard to their financial situation.
  •     A thorough review of the clients’ assets and liabilities.
  •     A comprehensive understanding of the clients’ income and expenses so that a cash flow and/or budget can be constructed.
  •     Gathering and analyzing statements from banks and brokerages, real estate holdings, employee benefit plans, insurance policies, and estate documents.
  •     With all the information, a plan can be created helping the client meet their goals and desires for the future.

“As you can see, real financial planning is not simply investment planning. It involves looking at all aspects of the clients financial environment and making sure the pieces work together rather than against each other,” says Ms. Allen. “Also, a financial planner should have your best interest at heart and act as a fiduciary agent for you.”

“This is a process that is beneficial to everyone especially those with more complicated situations. Seeking the advice of a qualified professional financial planner can positively alter the course of those facing financial difficulties,“ concludes Kay Allen, CFP® at Aspenwealthmgmt.com.

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