NAPFA Illustrates Dire State of Americans’ Finances

Trade group suggests that ‘money difficulties people are facing can be reversed by following the advice of a qualified professional planner’

NAPFA infographicThe National Association of Personal Financial Advisors released on Friday an infographic to depict the dire state of personal finance in the United States in 2012 and the important role financial planning can have in reversing the negative trends.

NAPFA cites several 2012 studies that show Americans are lacking in basic financial knowledge and processes resulting in an overall lack of confidence in their financial futures. “From budgeting and saving to proper estate planning and investment management, Americans are missing the mark when it comes to managing their finances,” NAPFA says.

The trade group for fee-only advisors says that recent research shows the following reality:

  • 56% of U.S. adults lack a budget (CUNA 2012 Financial Literacy Survey);
  • 40% of U.S. adults are saving less than in 2011 (NFCC and NBPCA 2012 Consumer Financial Literacy Survey);
  • 39% of U.S. adults have ZERO nonretirement savings (NFCC and NBPCA 2012 Consumer Financial Literacy Survey);
  • 39% of U.S. adults carry credit card debt from month to month (NFCC and NBPCA 2012 Consumer Financial Literacy Survey);
  • 31.4% of all mortgage borrowers are underwater (Zillow).

“These statistics show there is a dire situation in the U.S. when it comes to basic financial knowledge and preparedness,” said NAPFA National Chairwoman Lauren Locker, in a statement. “What people need to understand is that a true professional, independent financial planner is capable of addressing the full spectrum of financial challenges people face today, from the simple to the complex.”

The infographic goes on to help answer the question everyone has about financial planning–‘What does the financial planning process entail?’

“Real financial planning is not simply looking at someone’s investment holdings and providing a new asset allocation. It is a much more detailed process that addresses every aspect of an individual’s financial well-being, including budgeting and saving, insurance, college funding, estate planning, tax strategies and more,” Locker said.

Finally, the infographic goes on to pose a series of questions every financial planner must ask of their clients. “Only by asking the right questions can a planner gather the needed information to develop a sound, all-encompassing plan to help people not become part of the negative statistics,” Locker said.

Said Locker: “Many of the money difficulties people are facing can be reversed by following the advice that a qualified professional planner can provide.”

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