Download Importance of Financial Planning

FOR IMMEDIATE RELEASE
Contact: Ben Lewis
NAPFA
(301) 963-7555
[email protected]
Americans Need To Understand What Financial
Planning Is And How It Can Help:
NAPFA introduces new infographic on the important role of financial planning
ARLINGTON HEIGHTS, IL (October 5, 2012) – According to several 2012 studies, Americans are lacking
in basic financial knowledge and processes resulting in an overall lack of confidence in their financial
futures. From budgeting and saving to proper estate planning and investment management, Americans are
missing the mark when it comes to managing their finances.
The National Association of Personal Financial Advisors (NAPFA), the country’s leading professional
association of Fee-Only financial advisors, today introduced a new infographic to depict the state of personal
finance in the United States in 2012 and the important role financial planning can have in reversing the
negative trends. Recent research shows the following reality:
•
56% of U.S. adults lack a budget (CUNA 2012 Financial Literacy Survey)
•
40% of U.S. adults are savings less than in 2011 (NFCC and NBPCA 2012 Consumer Financial
Literacy Survey)
•
39% of U.S. adults have ZERO non-retirement savings (NFCC and NBPCA 2012 Consumer
Financial Literacy Survey)
•
39% of U.S. adults carry credit card debt from month to month (NFCC and NBPCA 2012 Consumer
Financial Literacy Survey)
•
31.4% of all mortgage borrowers are underwater (Zillow)
•
41% of Baby Boomers do not have a Will (RocketLawyer.com)
•
50% of Americans with children do not have a Will (RocketLawyer.com)
•
25 million of Americans are underinsured (The Commonwealth Fund)
•
16% of Americans are very confident that their investments will increase in value (EBRI 2012
Retirement Confidence Survey)
•
23% of Americans are not at all confident in having a comfortable retirement (EBRI 2012
Retirement Confidence Survey)
•
In 1991, 11% of workers expect to retire expect to retire after age 65, but in 2012, 37% of workers
expect to retire expect to retire after age 65 (EBRI 2012 Retirement Confidence Survey)
•
2 in 5 U.S. adults gave themselves a C, D, or F on their knowledge of personal finance (NFCC and
NBPCA 2012 Consumer Financial Literacy Survey)
“These statistics show there is a dire situation in the U.S. when it comes to basic financial knowledge and
preparedness,” said NAPFA National Chair Lauren Locker, CFP®. “What people need to understand is that a
true professional, independent financial planner is capable of addressing the full spectrum of financial
challenges people face today, from the simple to the complex.”
The infographic goes on to help answer the question everyone has about financial planning — What does the
financial planning process entail? The process is complex and includes much more than investments. It
includes:
•
Sharing your life goals, values and philosophies about money and finances with your planner.
•
Cultivating a relationship with your planner based upon mutual trust and respect.
•
Determining your net worth by identifying all of your assets and liabilities.
•
Gathering detailed information about your daily, monthly and yearly expenditures.
•
Constructing a cash flow statement based on your income and expenses.
•
Analyzing your spending habits and developing a workable budget that you can stick to.
•
Gathering and analyzing financial statements from banks and brokerages, estate documents,
insurance policies, real estate holdings and employee benefit plans.
•
Discussing various life planning assumptions (rate of return, inflation rate, savings ratios, etc.),
identifying long and short term goals, then mapping out various paths to take to realize those goals
based upon those assumptions.
•
At all times during this process, your planner will be acting as a fiduciary agent for you – your best
interest will always be the paramount.
“Real financial planning is not simply looking at someone’s investment holdings and providing a new asset
allocation. It is a much more detailed process that addresses every aspect of an individual’s financial wellbeing, including budgeting and saving, insurance, college funding, estate planning, tax strategies and more,”
said Ms. Locker.
Finally, the infographic goes on to pose a series of questions every financial planner must ask of their clients.
Only by asking the right questions can a planner gather the needed information to develop a sound, allencompassing plan to help people not become part of the negative statistics.
“Financial planning can benefit everybody. You don’t need to have a million dollars or have a complicated
situation to make use of the guidance and structure that financial planning offers. Many of the money
difficulties people are facing can be reversed by following the advice that a qualified professional planner
can provide,” concluded Ms. Locker.
The infographic can be accessed HERE (http://visual.ly/why-financial-planning-important).
If you are interested in speaking with Ms. Locker about the infographic and the role financial planning plays
in the lives of Americans, please contact Ben Lewis, NAPFA’s Communications and Marketing Manager, at
(301) 963-7555 or [email protected].
ABOUT NAPFA
Since 1983, The National Association of Personal Financial Advisors (NAPFA) has provided Fee-Only
financial planners across the country with some of the strictest guidelines possible for professional
competency, comprehensive financial planning, and Fee-Only compensation. With more than 2,400 members
across the country, NAPFA has become the leading professional association in the United States dedicated to
the advancement of Fee-Only financial planning.
For more information on NAPFA, please visit www.napfa.org.
###