A few years ago I can honestly say I had given zero thought to what constituted a ‘financial planner’.
I honestly didn’t care.
A financial planner seemed like something for other people. People with tons of money and complicated financial situations.
They were for people who actually used the other 90% of every bank, not just the teller window.
They were not for me.
What the shit?
Does financial planning really matter to people like me? (people who aren’t making a ton above the poverty line….)
Or are they just another way for the financial world to favour the rich, and sell those of us who are living on less a bunch of overpriced, high-fee ‘tools’ that make the rich richer and life for the rest of us just that much harder..
From farming … to opera singing… to financial planning….
I grew up with farmers, and became the person I am among artists… but even though I've had the most wonderful people in my life … the financial lessons they imparted were few and far between.
And so when I started to try to figure out the challenges of being self-employed, and living on … not a lot of money… I had no tools. I had no idea how to make taxes work for me instead of against me, how to use insurance to help me sleep better at night, and whenever I thought about the future.. it wasn’t about saving for retirement.
But I was lucky. I was lucky because when I finally stepped into the world of personal finance… I really liked it.
I loved how empowered it made me feel. I didn’t mind budgeting. I got a thrill out of saving.
All I needed was information and I was able to run with it.
But that isn’t the story for everyone.
What’s the REAL financial problem?
As I moved from the world of never talking about money into the one where financial nerds reigned supreme I realized that there's an insane amount of information out there.
People have written every possible thing there is to write about money. You can read ‘getting out of debt stories’ from every possible angle, you can find a billion budget templates or dive into the tax minutia of claiming Capital Cost Allowance on your family cottage.
It’s all one Google search away.
And yet, we still have a giant financial literacy problem in Canada and North America.
People in the personal finance community complain about the lack of education in schools. They complain about the need for more resources and simpler communication… but the truth is that every possible financial fact is right at your beck and call.
So what’s the real problem here?
To me that’s one of the most interesting questions in finance right now…
Why, when there are so many people who are struggling with money, struggling to make ends meet, struggling to save and manage their debt… is there so little engagement with the tools that could help?
Well, there’s one thing that I can rule out with certainty (although I’m sure that some financial ‘experts’ will disagree):
It’s not because people are stupid.
As much as it’s fun for people who naturally understand cash flow and finances to say it… those of us who don’t have brains that innately understand the benefits of compound interest aren’t less than them.
When I sit down and look at a piece of sheet music I can hear how it sounds, I can imagine what I would do with it, I can picture standing on the stage and telling that story.
… that’s how my brain works.
When I see a spreadsheet my brain just becomes blank static.
The difference of course is that you can easily get through life without learning to read music, but we all have to learn how to deal with money…
So how do we fix that problem?
Why financial planning is essential…
Some people just need help.
They need help understanding their money. They need help organizing their money. They need help taking whatever amount they earn and making sure that it goes exactly where they want it to go.
They need help to understand what I never knew about finance… that it’s not about making the ‘right’ choice, but instead about making a deliberate choice. A choice that’s made armed with all the options and information that you can gather.
That’s how I see financial planning.
Look. I know there’s going to be some argument about definitions here, because many financial planners seem more like salespeople than truly objective advisors. And in my opinion, the melding of those two worlds has done a lot of damage to what I think is an essential societal role.
To me, the role of a financial planner is to serve as a guide for people trying to navigate the crazy world of money.
A financial planner is someone who understands all the different tools that you could use: debt, budget, insurance, taxes, businesses, retirement.. and helps you pick the right ones to build your life, whatever you want that life to be.
Some people can do that on their own.
But other people need some help.
And the real problem in the world of money… is that they can’t always afford to get that help….
How do we provide high quality financial services to lower income people?
This is the question that I’ve been struggling with for the last year, ever since becoming a financial planner turned into my goal.
It’s abundantly clear from the material that I’ve been forced to study in order to gain a certification that they’re not training me for that work.. working to help lower earners, that is.
They’re training me to work for the same people that most of the other financial planners work for.
But here’s the thing…
They don’t need any more help.
Financial services for the rich are important, but they’re covered. My services really aren’t needed there.
The need I see is in the community that I’ve grown up in, and in my beloved arts community.
But those people, the ones I would love to help… can’t afford to pay thousands of dollars for a financial plan.
And so I’m sure they, like I did, never really gave it much thought.
Financial planning doesn’t seem like it’s for them, and the internet agrees…
Go to Reddit and you'll see people talk about how ‘all you need is a few ETFs in the right places and you don’t need professional advice'….
Dear ‘internet experts’ … do you know how little that sentence means to most people???
Do you know how misguided it is to limit financial planning down to one of its, admittedly sexiest, spokes: investing?
Financial planning isn’t ‘just’ anything. Financial planning is everything.
It’s coming up with a plan for your kid's education and future.
It’s putting the pieces in place to cover you and your family if something unexpected happens.
It’s using your money to build a life that you absolutely love.
And some people could use some help with that.
Which honestly sounds like a pretty damn reasonable request….
The solution to the financial literacy problem isn’t making people feel ashamed for needing help, it’s making sure that they can afford to get some.
Affordable help from a professional planner who can give advice that isn’t tainted by the big players in the financial services industry.
So what do we do…? cause I really don’t know…
I know I’m biased.
I know that some industry professionals have chosen to solve the question of price by offering ‘free’ financial planning… and gaining their salaries by taking commissions on products sold.
I realize that’s a way to do things, and I’m sure there are some wonderful people who have managed to strike a balance between good advice and product sales.
But personally I don’t trust that you can be a guide and a sales person.
I sure couldn’t do it.
And I have a big problem with financial advice being bank rolled by the big banks and insurance companies.
I don’t trust it, and I don’t think I’m alone in feeling that way.
But that doesn’t mean that I hate the industry.
I believe passionately in the ability of financial planning/coaching/guiding to change peoples lives, especially people who live with limited resources.
I believe that we can find a way to create stability on both sides of the table, both for financial planners and for the people they help.
I believe that this kind of one-on-one help is a key piece to solving the literacy problem that the personal finance community keeps complaining about.
Because there’s nothing wrong with needing help.
But there’s definitely something wrong with help that is priced way beyond the means of the people who need it the most.
I don’t know how to fix that right now… but I can’t wait to figure it out….