Guiding your life’s biggest financial moments

Personal Finance

Financial Planning We Can Afford

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COVID-19 has been a huge blow to everyone’s finances, but millennials have been hit particularly hard. In an August 2020 Vanguard poll, 57% of millennials said COVID-19 was having a negative effect on their finances. Now millennials, myself included, are ready for a financial reset, and for some that means finding a financial planner. More than 50% of millennials haven’t received any professional financial advice, but they are increasingly interested in talking to a planner, according to the same survey. However, good help can be hard to find.

All financial planners agree that a lack of financial assets is one of the biggest barriers millennials face when seeking help. A traditional fund management company may require its clients to have at least $ 250,000 (or more) in investments and generally base their fees on assets under management. And while online brokers and robot advisers may have low-cost and low-cost options, they tend to focus on investing rather than advising on issues like how to pay off your loans. students. (See more on robo advisers.)

Additionally, the internet, including social media, has created confusion over what constitutes financial planning. “Millennials are exposed to apps that focus solely on investing as opposed to holistic financial planning,” says Marsha Barnes, founder of The Finance Bar, a website that offers financial coaching and education. “These apps seem to help you build wealth, but they are missing some areas of financial planning, such as living on a budget, net worth, and taxes.” Worse yet, social media influencers can promote risky investments without revealing conflicts of interest, says Chris Struckhoff, Chartered Investment Advisor and Founder of Lionheart Capital Management.

Subscribe and prosper. To provide true financial planning at an affordable price for millennials, planners look to services like Netflix and Hulu for inspiration: Customers pay a set amount each month to receive a certain level of service. Since 2014, XY Planning Network has provided a platform for financial advisors to use this model to provide affordable financial planning services to young adults. Monthly subscriptions vary, with some advisors basing their price on your income. (Some network planners also offer pro bono financial planning services to people who have been affected by the pandemic.)

“I originally wanted to follow the asset under management model, but that’s not practical for most younger clients,” says Jovan Johnson, certified financial planner and founder of Piece of Wealth Planning, which offers subscription services. “With the subscription model, customers can include the monthly fee in their budget,” he says. Johnson begins with a free 45-minute consultation to determine your goals and see if his services are right for you. Services cost $ 200 per month and customers can cancel at any time.

A few planners are tinkering with the idea of ​​small financial communities. Lori Atwood, CFP and founder of Atwood Financial Planning (AFP), found that millennials often want confirmation that their finances are on the right track, and many thrive in a group. With AFP’s small group planning classes, participants are encouraged to exchange ideas with their peers while a financial planner guides each of the five sessions. The cost is $ 250, without further commitment.

Whether you work best in a group or one-on-one, it’s important to make financial planning a priority. For my part, I know that I can devote some of my shopping energy to finding and paying for a financial planner. If you want to hire a planner (someone you’ve met through your parents, for example), ask if the advisor offers a payment plan you can afford.

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