A Financial Jam

I recently read that only 32% of all households have a relationship with a financial planner. (Journal of Financial Planning, Sept 2017) Let’s be clear, we’re not talking about a relationship with a financial advisor that just makes investment decisions; we’re talking about a qualified financial “planner” that collaborates with you on areas you need help with, such as budgeting, cashflow, college planning, retirement, estate documents, taxes, insurance, charitable giving, and investments. Real life stuff!

There are many factors that play in your financial picture, it can seem overwhelming at times. That’s why I’m surprised that only 32% of households have someone to help them with their financial decisions. What worries me is, does that mean most households are avoiding these decisions until they are in dire straits?

It reminds me of Harvard’s “Jam” study which was made famous in 2000.

Briefly, the experiment consisted of two psychologists who went to an upscale food market and set up a display with 24 varieties of gourmet jam. Then, on another day shoppers saw a similar display, but with only 6 varieties of the jam. The end result was that the large display attracted more attention, but consumers were only one-tenth as likely to buy from the large display compared to those who saw the small display. Meaning “less choice does mean more sales”.

The point is, there are as many varieties of jam as there are financial choices. Many people become paralyzed with all the choices and end up doing nothing. However, when you do nothing, your chance of succeeding is greatly reduced because it’s the culmination of all these small financial decisions taken together that make someone financially secure.

Some people have financially-savvy parents, or a friend to help them through the decision process; and that’s great! But for those of us who don’t, a financial planner is your next best resource. Finding one you trust who is able to zero in on your history, family needs, and life goals can help you to live the best life possible based on your earning potential and nest egg.

You can visit our website to see more about the financial planning services offered through Worley Erhart-Graves Financial Advisors.

-       Written by CERTIFIED FINANCIAL PLANNER™ Gail Gill, Worley Erhart-Graves Financial Advisors