Two-Thirds of Investors Don’t Have a Financial Plan

Despite increasing pressure to slash debt and rebuild retirement funds, two-thirds of consumers do not have a written financial plan, according to the 2009 National Consumer Survey on Personal Finance.

The survey, released today by the Certified Financial Planner Board of Standards, found that 64% of respondents do not have a written financial plan in place, despite studies conducted by the SEC that indicate that on average, investors with a financial plan have twice as much cash and investable assets as investors without a plan.

Investors with a college degree, higher household incomes and more assets to invest are more likely to have a plan. Of the 284 respondents who have a written financial plan in place, 62% were motivated to develop one because of retirement goals and planning. Meanwhile, 48% wanted advice on a broad range of financial matters, 41% were focused on savings goals and planning and 36% were concerned with investment goals and planning. The CFP Board of Standards spoke to 1,742 respondents in total.

“Those in the know who are using financial planning are finding it a valuable experience,” Eleanor Blayney, consumer advocate for the CFP Board, said in an interview. “There are just too many people who are not using it. It’s important to develop a healthy baseline [financial plan] and not just use it in times of crisis,” Blayney says.

When developing a financial plan, be sure to speak with an financial planner that can be objective and focus on your best interest. Unfortunately, many financial advisors develop a financial plan after only a 10 minute conversation with their client, and the plan functions more like a sales presentation than a comprehensive financial guide. It’s best to speak with an independent fee-only financial advisor who has achieved the Certified Financial Planner designation to ensure your plan is holistic, comprehensive, and functional.