Financial Plans: Don’t Have ‘Em, Don’t Need ‘Em

One in 5 without a financial plan say they don’t need one

More than a quarter of Americans don’t have a financial plan, but what’s really troubling is that 38% of those don’t have any intention of creating one, according to a survey released Tuesday by Nationwide Funds.

Nationwide broke those numbers down a little more and found that at least some people may just need a little help. More than 30% of people without a plan just haven’t gotten around to it, and 16% said they weren’t sure how to get started. Unfortunately, 20% of respondents said they didn’t have a plan because they didn’t need one, and 15% said they have all the information they need in their head.

Harris Interactive surveyed 783 adults with at least $100,000 in investable assets for Nationwide’s survey. Nationwide Funds is the mutual fund business of Nationwide Financial Services.

Mike Spangler, president of Nationwide Funds, told ThinkAdvisor that 13% of respondents who don’t have a financial plan said they don’t need one because they don’t plan to retire for a long time.

“That calls into question how they feel about retirement,” Spangler said. “Eight percent don’t think they’ll ever retire. They’re saying, ‘The traditional definition of retirement may not be a reality for me.’”

Nationwide identified an independent streak in the survey respondents. Forty percent of people who didn’t work with a financial advisor said they didn’t need professional help.

Spangler noted that especially among Generation X and Y respondents, investors are forgoing professional help in favor of their own research online and on social media. For advisors to reach those people, they can’t try to sell advice.

“The big thing is to acknowledge their fears,” Spangler said. “What are their objectives? What is their destination?”

However, some respondents don’t work with an advisor for financial reasons. Twenty percent didn’t want to pay for financial advice and 11% don’t think they have enough assets to justify working with an advisor.

Investors who are attempting to plan on their own are clearly better off than those who aren’t planning at all. However, Spangler pointed out the complex nature of planning could make it difficult for many investors to be successful.

“It’s great that there are tools out there, but something as complex as financial planning is hard to do online,” Spangler said. “It’s so much more than just investing in a 401(k) or mutual fund. It’s asking, ‘What are my real goals? How am I going to get there?’”

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