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Financial Planning: Welcome to a New Generation of Investing

Financial Planning: Welcome to a New Generation of Investing

November 13, 2019

When our parents’ generation was in the workforce, financial planning wasn’t the necessity it is today. In fact, the International Board of Standards and Practices for Certified Financial Planners, Inc. wasn’t even created until 1985 (Source, 10/29/19).

That’s because most workers received pensions that they didn’t even have to think about – it was just part of having a job. But today’s worker needs to be more proactive when it comes to their retirement planning; 401(k)s are not always a given and not all benefits packages are created equal. It’s no longer an invest-it-and-let-it-ride world.

And investments aren’t just about the numbers – if that were the case, everyone could use the same plan. Creating a sound financial plan also means considering your present and future goals and developing a strategy that fits your current lifestyle while saving for retirement.

But is it worth the money?

Does it feel counterintuitive when you hear someone advise you that you might have to spend some of the money you might put in your portfolio in order to possibly reach your goals when it comes to investing? I get that. It’s the old, “Spend money to make money” cliché.

However, when it comes to financial planning, there is some research to support this concept.

Based on research, analysis, and testing, Vanguard has concluded that, yes, there is a quantifiable increase in return from working with a financial advisor. Vanguard calls this advantage the Advisor’s Alpha. When certain best practices are followed, the result can be an Alpha in the 3 percent per year range.

A separate study by Russell Investments, a large money management firm, came to a similar conclusion. Russell estimates a good financial advisor can increase investor returns by 3.75 percent. (Source, 10/29/19)

Avoid the stress of investing alone

As if the possibility of a solid financial plan isn’t incentive enough, there are other benefits to working with a professional as well, including knowing you have someone to help you make decisions when you’re not sure about your next steps.

According to John Hancock Investments, “Participants that work with a professional say they’re less worried about their financial condition than those that manage investments on their own. This is true for all participants surveyed, even if they’ve saved less toward retirement. Advisors can make a real difference in lowering stress: 35% of participants that don’t work with a financial advisor say they worry a lot or a great deal, nearly twice the amount of the 18% that do work with one.” (Source, 10/29/19)


That’s because working with a financial advisor can give you peace of mind that you might not have as a solo investor. A professional financial planner can help you:

  • Save time
  • Stay financially organized
  • Assist with behavioral and emotional decisions
  • Keep you accountable
  • Help you establish your values and goals
  • Educate you so that you’re more comfortable making financial decisions.

Not only that, but working with a comprehensive financial advisor means that you’re still in the driver’s seat when it comes to your investment plan – we’re there to advise you on your options and help you make decisions based on our knowledge of your goals and your life.

Not all advisors are the same

With all of this in mind, it’s important to remember that not all financial advisors are the same. Just as you might research and interview several contractors before a major home remodel, it’s important to find someone who understands your unique needs.

Here are some things I recommend you look for:

  1. Find someone who has a passion for and truly enjoys creating life-long relationships with their clients.
  2. Look for someone who is going to personalize your plan based on your goals.
  3. Make sure this person makes you feel comfortable and really listens to you.
  4. Find someone who is willing to educate you about the process and isn’t just there to sell you products.
  5. Ensure this person can set up choices where future income streams could come from and educate you on how today’s financial products can all work together to reach your goals.


Melissa Thompson is an Investment Advisor Representative holding a ChFC® designation in the Castle Rock, CO and Denver, CO areas who focuses on educating individuals and small businesses about the importance of protecting and growing their financial assets. “My preliminary meeting process is a chance for us to talk about where you are and where you’d like to go. You’ll have the opportunity to make sure that my services fit your unique needs before you commit to moving forward. I look forward to creating life-long relationships with my clients and taking the fear out of financial planning.” To schedule a consultation with Melissa, CLICK HERE.