10 Debunked Myths of Financial Planning

By Amanda L. Williams

Navigating the white noise of financial planning can be challenging. We’ve taken some time to debunk some of the most common myths you’ll come across. Creating and managing a financial plan efficiently is easily one of the most impactful things someone can implement into their lives. Money is a staple in today’s society and access to information is unlimited, which can make it even more difficult to weed through what is true and false.

We hope that you will gain some clarity after reading through the following misconceptions. With that being said, let’s jump right in …

Myth #1: I Don’t Need to Have a Plan Until… or I Don’t Need a Plan Because Too Much Changes Anyway

Truth: Procrastination is the action of delaying or postponing something. We too often procrastinate on some of life’s more important planning. We’ve witnessed firsthand the negative impact waiting to plan or even worse, failing to plan, can have on a family or business.

It is so crucial to plan for the many “what ifs” in life as well as the unavoidable such as death. Planning is not always fun or instantly gratifying; it takes work. It may be easier to continue to avoid reality and the “what ifs” of tomorrow, however. “Why are you waiting? Tomorrow isn’t guaranteed.” -Anonymous

A plan in fact simplifies your life by keeping you, your family, and your financial goals on track. It establishes clear and actionable steps to keep you moving from Point A to Point B, ultimately helping you reach your destination. Just as you may need to take a detour on a trip, you adjust your plan as your family and financial circumstances change over time.

Myth #2: Financial Planning is Really Just About Investment Management

Truth: As times have changed, the word investing has become interchangeable with financial planning in many people’s minds. When you discuss investment management, it is important to address your asset allocation and rebalancing your portfolio, however, that is not all. Taking charge of your investments is only one piece of the puzzle. Experiencing a true financial planning process will help you navigate and coordinate an overall strategy that will incorporate all aspects of your world. Your financial road map should address your income, assets, liabilities, cash flow and how you protect what you own. It will coordinate all the pieces to make sure you’re on track towards your financial goals.

Myth #3: I Don’t Need a Formal Financial Plan If I Always Make Good Financial Decisions

Truth: Have you heard “Hindsight is 20-20?” Yes, we have too. If we all knew the right financial decisions to make and when to make them then no one would need a financial plan. The truth of the matter is that’s not possible. We all strive to make good financial decisions but without a well-thought-out plan, it’s almost impossible to make the headway necessary to meet our goals. Financial planning requires coordination of retirement planning, investment management, cash flow evaluation, tax strategies, estate planning and asset and income protection.

Many people think that buying a product will be a “magic fix” for their money problems and provide for their loved ones. In actuality, financial planning is complex and requires planning, not just making decisions on a wing and a prayer.

Myth #4: Financial Planning is the Same as Retirement Planning

Truth: Creating a financial road map does indeed help you save for retirement; however, retirement is a goal within a plan. We’ve heard repeatedly that folks are “all set” because they’re saving, even maxing out, their retirement plans. Financial planning is so much more. What happens if you

haven’t created a balance of savings across various buckets and find yourself in a financial pickle during a crisis? If you’ve only saved in your 401(k), IRA or other retirement accounts, you may need to dip into your retirement savings because you don’t have other savings plans in place. This can create unnecessary penalties or expenses that could have been avoided or could limit your options of where to pull money, especially when the market is down, and you need to take money out. Did I mention the tax planning that should be considered when saving towards retirement?

Myth #5: Once You Have a Plan, You’re All Set

Truth: Financial planning is always a work in progress. Just as the weather changes, so do your circumstances. Depending on your situation, you may experience small, mild changes while at other times you’ll experience more turbulent times. Some examples are, income levels, big expenses come and go like purchasing a home or paying for college, risk tolerance decreases as you approach and enter retirement and tax rates across the spectrum are constantly fluctuating. To have the best chance of financial success, your financial plan shouldn’t be a “set it and forget it” model. Instead, it should require frequent review, monitoring, and maintenance to ensure that you’re staying the course.

Myth #6: My Advisor Will Take Care of Everything

Truth: Your advisor and their planning platform are not a magic solution. While they are tasked with managing and helping guide you in the right direction, it is ultimately your responsibility to follow through. They should work alongside you as part of your team of professionals to help increase your financial literacy, make it as easy as possible to get things over the finish line and make sure you stay on track. It is important to understand that the planning process starts and ends with YOU.

Myth #7: All Financial Advisors are the Same, so I Can Just Pick One at Random

Truth: Just as no two days are the same, neither are financial advisors. Each financial advisor team will differ in their planning strategies, philosophies, and the advice they deem appropriate. The industry is heavily regulated to help protect people from receiving bad or inappropriate advice. Transparency, honesty, and integrity are all crucial values that the Financial Advisor you choose should live by. It is important to choose a professional who is openminded and works diligently towards putting together a financial road map that aligns with what YOU need, not what the advisor wants.

Myth #8: Financial Advisors All Charge the Same Way

Truth: There are many ways a financial advisor can charge for their services. From earning a commission on a product they sell, to charging a percentage of the money under their management or charging a flat or hourly fee based on the complexity of your planning. There isn’t a right or wrong answer, what is important is that they are upfront about how they get paid and what you can expect to pay for the services you receive.

Myth #9: I Need Someone Local to Me and I’ll Have to Drive to Their Office All the Time to Meet

Truth: In today’s world, technology has created more options when it comes to meeting. The ability to meet via a video conference has become a convenience that most enjoy. It allows you to meet from the comfort of your home or work and eliminates the extra travel time. In addition, many advisors have clients throughout the country and technology has made it possible to still meet “face-to-face” even from thousands of miles away.

Myth #10: I Can Do It All On My Own

Truth: This may be the biggest misconception out there. Just as a surgeon cannot handle all aspects of a surgery nor a foreman all the moving pieces of a construction project, it is impossible for one to handle their entire financial world on their own. Even though you should be involved with every decision regarding your financial road map, it is important to rely on others in their field of expertise so they can provide additional support, tools, and advice to help you reach your financial potential.

Financial advisors work day in and day out servicing their clients, creating plans, reviewing benchmarks and investment performance and monitoring progress in an efficient manner. They can see the bigger picture and have access to more resources and potential strategies than someone who doesn’t do planning as his or her full-time job.

Take Charge of YOUR Financial Future

The benefit of taking action today is to avoid unforeseen or undesirable outcomes tomorrow. We help business owners, independent women and career professionals design their dream future, build a plan to set them on the right path and avoid life’s uncertainties through foresight.

To discover any blind spots or unforeseen issues in your financial plan, call us at 585-899-1227 or go to

www.ChamplinandAssociates.com to schedule a Financial Road Map Assessment.

Securities offered through J.W. Cole Financial (JWC) member FINRA / SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). Champlin & Associates and JWC/JWCA are unaffiliated entities.