There are countless benefits to this new and bold online world. Learning is literally at peoples’ fingertips and connection, even during a pandemic, is merely a click away. Still, many industries are now faced with an influx of alleged experts – people who take to online forums and misguide others with misinformation.
Thanks to the internet, experts in a wide variety of industries are having to mitigate well-meaning but inaccurate advice. This is something the financial industry has been dealing with for decades. People make assumptions or have “wisdom” passed to them from other generations. Often, the limited thinking perpetuated by inaccurate beliefs is a subject of frustration for those trying to help people with their finances.
Certified Financial Planners have taken to social media and online avenues to try to alter misbeliefs about money management. They attempt to help clients using patience, good old fashioned logic, and a prevailing sentiment that doing something for your future is always better than doing nothing at all. They encourage people to take the first step and then the next step to secure financial stability.
Here, they tackle some of the biggest misconceptions in the industry and shine a light on ways that people can better prepare themselves and their families for the future and for the present.
Only the Wealthy Have Access to Financial Planners: FALSE
Financial planners want to help people. They are uniquely positioned to help everyone build wealth and create different approaches to saving money. They also, as Certified Financial Planner Nathan Garries points out, are some of the few people in the world who are working to get you out of debt rather than into it.
“There are so many people out there trying to get you into debt. I take pride in being part of a qualified group of people who are working to help you get out of debt. I’ve never had a client complain because I helped them come up with ideas on how to pay off their mortgage faster,” he says.
Financial Planners and Financial Advisors Are the Same: FALSE
Certified Financial Planners have years of education and often a slew of certifications as well as continuing education to earn and maintain those three letters after their names: CFP.
“The difference between a financial advisor and financial planner is a subject that’s debated in the financial services industry, but to little avail. Part of the problem is there’s no federal regulation over the titles advisors can use,” according to U.S. News & World Report reporting. “Unlike the legal or medical industry, anyone can call themselves anything in the financial industry, with the exception of industry certifications.”
The difference in the educational levels between financial advisors and certified financial planners is often vast.
“Beyond my collegiate studies, I have spent my entire adult life in continuing education and earning additional credentials so that I can better help my clients. That many people do not understand the differences between planners and advisors is often a topic of frustration for CFPs,” Nathan Garries adds.
You Only Need Approximately Three Months of Expenses in Your Emergency Fund: FALSE
Actually, if you are single, that number is more like nine months of expenses. It is at least six months if you have a dual income household. Basically, as Niv Persuad, CFP explains, you need to have enough money to be able to survive until you get another job.
“Peoples’ rainy day funds need to be bigger than they anticipate in this pandemic-influenced world,” Garries says.
It is Simply Too Late to Reach Financial Goals – What’s the Point? FALSE
Solid moves are solid moves, no matter your age. Trevor Harris, CFP for Sonas Financial Group in Kansas City explains that “it is never too late to make an impact on your financial life.”
“Yes, if you don’t start seriously saving for retirement until your mid-50s, you probably can’t retire at 55. However, you can always take steps to positively impact your goals. If you started saving late, start increasing that now. But also look at reducing debts, for example, downsizing your house. Or join a health club now to potentially decrease future medical expenses in retirement,” he says.