The Financial Industry Regulatory Authority (FINRA) is currently running a study on the financial savviness of the US population.  While a majority of people feel they have a good grasp of financial topics, the study shows that is not actually the case.

Below are a few of the study highlights:

  • 1 in 5 people are spending more than they earn
  • 1 in 2 people pay their credit card balances in full every month
  • 2 in 5 people can pass a basic financial literacy test (answering at least 4 of 5 questions correctly)

If you would like to review the entire study results, it can be found here: http://www.usfinancialcapability.org/results.php?region=US

If you would like to take the 5 question financial capability test yourself, the link can be found here: http://www.usfinancialcapability.org/quiz.php

 

Recently, I read a blog article by a Bob Seawright titled, “Financial Advice: A Top Ten List”.   The article describes how financial planners provide clients with a far greater benefit than just investment returns.   Bob provided an excellent list of ancillary benefits.  His list is spot-on and a worthy read by anyone considering a financial advisor.  Bob’s list is shown below and the full article can be found here.

1)      Goal Formation

2)      Investment Policy Statement

3)      Asset Allocation

4)      Persistence-Weighting

5)      Risk Management

6)      Behavioral Management

7)      Productive Simplicity

8)      Senior Protection

9)      Tax Efficiency

10)   Financial Planning

In fact, I would even add two additional items to round out a dozen.

11)   Time Savings – For many clients, having a financial advisor frees up time to spend with family and friends.

12)   Second Opinion – Peer review is commonplace in academia and most professions.  Why wouldn’t you want a second set of eyes on your retirement plan?