posted on January 13th 2017 in Austin CFP Team Posts with 0 Comments /

Why can’t people release themselves from self-imposed constraints that hold them back from discovering the power of their personal future-selves in happiness, health, and wealth? Well, now we know.

Because financial planning sucks.

Here’s how I know.

A recent consumer survey conducted by Voya Financial, found among other things that 37% of the respondents would rather spend their time waiting in line at the DMV than review their retirement plans! Since there is nothing much worse than standing in line at the DMV, it stands to reason that people really have an aversion to financial planning.

Rather than cite all the percentages and responses in the survey, let me just relate a typical consumer profile:

  • They readily admit to not spending enough time on planning for their future. Whether male, female, Gen Xer, Millennial, or Boomer, things were pretty even across the board.
  • They did not make adjustments to investments, wills, or insurance in the last year, but of course were twice as likely to have reviewed or changed their phone, cable, or Internet service
  • They are more likely to update and review their social media profiles than their financial plan.

To summarize: many Americans will be broke, but still have very cool and up-to-date social media, cool phones, and fast Internet.

Ok. I get it and I get why. Historically, financial planning has been a process stuck in the dark ages with little collaborative capabilities or appeal. It’s not surprising people might be more willing to waste time in the DMV line.

But things have changed and here’s my bold opinion: many folks think financial planning sucks because they don’t have the right advisor with the right tools.

WorthPointe has invested in a collaborative financial planning tool, WP360, that clients have described as being “very cool,” “awesome,” “extremely helpful” and “easy to use.” Some of these clients were very skeptical and even scared of financial planning prior to taking the plunge.

Here’s a WP360 demo if you’re interested:

Is planning even necessary? I consider it essential.

Investors are always looking for answers to questions, including “Should I invest in…?” “What should I do about…?” and “What if I do…?” The bottom line is you will get much better answers and thus results if these questions are answered within the context of a plan.

After all this, if you still have a burning desire to stand in line at the DMV then go right ahead and enjoy it, knowing you can also conveniently review your WP360 financial plan on your smartphone while you are waiting for your number to be called; it’s that easy.

2016 Q4 Index Review


(Table disclosures and performance for periods greater than one year are annualized. Selection of funds, indices and time periods presented are chosen by the client’s advisor. Indices are not available for direct investment and performance does not reflect expenses of an actual portfolio. Past performance is not a guarantee of future results. Russell data copyright © Russell Investment Group 1995-2013, all rights reserved. The S&P data are provided by Standard & Poor’s Index Services Group. MSCI data copyright © MSCI 2013, all rights reserved. Barclays Capital data provided by Barclays Bank PLC.)

The main contributors of return for the listed indexes in the 4th quarter were U.S. small cap and value stocks. The return for these asset classes was so strong that they would have overcome any headwinds from other asset classes in a diversified portfolio typically used by WorthPointe clients, resulting in an overall positive return for the quarter. Those headwinds were found across the board in international and emerging markets, REITs, and bonds.

The best indicated asset class for the quarter was the Russell 2000 at 8.83% and the worst was Bloomberg Barclays Global Aggregate Bond Index at -7.07%.

As most of you know, interest rates increased in the 4th quarter. The yield on the 5-year Treasury note rose 79 basis points (bps), ending at 1.93%. The 10-year T-note yield climbed 85 bps to 2.45%. The 30-year Treasury bond yield added 74 bps to close at 3.06%.

Some Perspective On The Year

Both the science of investing and the experiential data from investors tell us it is very difficult to consistently predict when investments will do well and when they will do poorly. At the beginning of 2016, I don’t recall anyone predicting the Russell 2000 would return 21.31%. I don’t recall anyone predicting with conviction that equity and bond asset classes would provide investors with robust positive returns. So my advice is simple: don’t take advice from people who are making predictions.

For true all-weather non-speculative investment strategies, you must focus on the things you can control from both an analytical and behavioral perspective, not the things you can’t control, like timing. This is a fundamental principle I have focused on for years with my clients and will continue to do so in the coming year.

Happiness, health and wealth in 2017!

about the author: Morgan H. Smith Jr. IMBA CFP®

Morgan Smith Jr. IMBA, CFPMorgan H. Smith Jr. IMBA CFP, who has been a fee-only financial planner for over 12 years, specializes in wealth management for successful families, business owners, retirement plans and institutions requiring a disciplined fiduciary process.

An Assistant Professor at the University of San Diego, Morgan has been a frequent speaker to many professional organizations and has appeared on CNBC, Fox Business New Live and is a founding member of the Strategic Trusted Advisors Roundtable.

Learn More and/or Contact Morgan

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