When we rolled out eFinPLAN in 2007 offering financial planning to everyone, some financial planners reacted a little negatively. They feared that online financial planning was competing for their clients, or might miss some things. However, the current system of financial planning delivery, has its own gaps in service. And since online planning provides a much needed service, online planning working with advisors, is a great way to serve people.
Some planners and financial coaches have embraced online do-it-yourself planning, for some of these key reasons.
- The cost of financial planning is a barrier to some. The cost of getting a comprehensive financial plan from a professional, is in the thousands of dollars, and is unaffordable to many people that really need planning. Most financial planners and wealth managers only help those with around $500,000 and up in investments. Planners tell me the cost of running their practice is very expensive. They are under a lot of regulatory paperwork and oversight, so they can’t afford to serve the masses, therefore they welcome do-it-yourself planners because…
- People need help: Most people don’t have adequate funds for retirement, live paycheck-to-paycheck, and have high debt. They need help not only with these things, but an overall plan too. Many financial planners welcome people taking the initiative to do-it-themselves. These are potential clients for them in the future, when they have accumulated a lot of investments. We want people to need financial professionals in the future, because they have done a good job getting their financial house in order and accumulated a lot of money.
- Many financial planners have backed away from planning. Financial planning services offered by professionals is very time intensive. Planner software takes hours to operate, and usually requires a support staff to help manage. Most financial firms have only a few planners on staff, and only one administrative person helping them. Therefore, they may devote a bulk of their time doing two things: investing and communicating with clients. It’s no surprise that many financial planners don’t provide the full planning service anymore. However, they welcome people doing some of their own planning; they come along side and enhance it, without having to do all the work.
- Financial planning and product sales: In the eyes of some planners and clients, these two things have always been in conflict. Some planners offer free or discounted planning, along with a financial product that pays them a commission or a fee. When there is an agenda, software can be used to position products more positively. Many planners don’t do this, so you will want to get to know them really well, if going in that direction. Some do-it-yourself websites offer no products and accept no advertising.
- Ease of use and client interaction: These newer online do-it-yourself financial planning apps are designed to be easy for consumers to use. Therefore, many professional planners use them with their own clients too. Some professional planners don’t have the time to use planning systems out there today, some are just too complex, and love these new more simple apps.