Almost half of over 1,000 adults who said they have a financial plan said theirs hasn't moved beyond the idea stage, 42% have committed their plan to paper and just 11% have basic notes or ideas, such as thoughts scribbled on the back of a cocktail napkin, a recent survey has found.
There are financial plans — and then there is actually having a financial plan, apparently.
According to a recent survey, of those who say they have a plan in place, 46% say it hasn't moved beyond the idea stage, 42% have a written document and 11% just have notes or ideas, such as thoughts scribbled on the back of a cocktail napkin. The study, which polled 1,011 adults by phone, was conducted by KRC Research for the Certified Financial Planner Board of Standards Inc. June 2-6.
About 86% of those polled, meanwhile, agreed that everyone should have a financial plan.
“It's good to see the awareness that planning is the way to go,” said Eleanor Blayney, the board's consumer advocate. “People know it's worth doing, but they haven't really done it, so now it's a matter of transforming attitudes into getting-it-done behavior.”
People with financial plans in their heads and on cocktail napkins are good targets for advisers, she said.
Concern about the expense to develop a financial plan is one barrier that stops people from preparing official written documents, Ms. Blayney said. Advisers should better communicate the value of having a trusted professional coordinate and monitor the many aspects of a consumer's financial life, including retirement planning, tax and estate considerations, and many other issues, she said.
In the survey, older people were more likely to have an official document, with 59% of those 65 and older having an official financial plan compared with just a quarter of those 18 to 34.
“We especially need to move younger people along,” Ms. Blayney said. “We need to introduce them to the profession and move them into beginning to plan in writing.”
The survey showed also that the financial crisis hurt the reputation of financial planners, with 40% of adults reporting that they are less trusting of advisers than they were three years ago. Half, however, said their feelings about advisers hadn't changed.
Only 36% of those surveyed said they had ever worked with a financial adviser or planner, according to the study.
Americans are apparently still skeptical about whether the economy is on the mend. About 59% of respondents said they are not confident that the economy will rebound during the next 12 months.
