There seem to be myths in every profession.
One great example, not related to financial planning, is entrepreneurs.
Entrepreneurs are surrounded by myths. A few are once you start a business you have more freedom and successful entrepreneurs go it alone.
Both are false.
Entrepreneurs are busy with little freedom in the early years of building a business and they need a solid team of experts they can rely upon.
Financial Planners are not immune to myths either. We know that there is some confusion and misunderstanding around our value proposition.
So our team at Clear Creek decided to debunk 6 common myths about financial planning.
MYTH 1: All advisors are only out for their own gain
BUSTED:
Many financial planners are fiduciary.
Clear Creeks’ Answer:
While not all financial advisors and planners are fiduciary, there are certainly many who are. A fiduciary is legally and ethically bound to put their client’s interest before their own. And here is the important part…they must do this to preserve good faith and trust! This means that fiduciary advisors must put their client’s best interests before their own and not sell high-commission products.
At Clear Creek, we are fee-based financial planners and not commission based. If you have read our bio you will see that Clear Creek was founded so that we could use the fiduciary model and always put our clients first. We strive to carry out the golden rule, “do unto others as you would have them do unto you”, Luke 6:31.
MYTH 2: All Financial Planners are the same
BUSTED:
Certifications, experience, qualifications, and affiliations bring differentiation.
Clear Creeks’ Answer:
Just as no entrepreneurs are the same, no Financial Planner is the same. Like entrepreneurs, Financial Planners can have a wide variety of certifications, experiences, and qualifications that make them extremely specialized and suited for a specific client.
Clear Creek focuses on working with entrepreneurs and their families because most of our staff have built, run, or are still running multiple companies. We know the challenges of limited time and the need for hyper-focus on a company. Ben, in addition to being an entrepreneur also holds his CFP® meaning he has obtained specific work and education criteria, passed a rigorous exam, and meets continuing education requirements.
MYTH 3: I don’t need a financial planner, I can do it myself
BUSTED:
It becomes a question of opportunity cost.
Clear Creeks’ Answer:
It has never been easier to take control of your finances and do it yourself. There are thousands of resources available online that empower you to manage your finances. The question is not could you do this yourself, we believe you are capable of doing it. The question is, should you do it yourself?
Clear Creek believes that while entrepreneurs can manage their own finances, they need to carefully consider where their limited time should be spent. Where does the entrepreneur want to focus their time? Building their business, spending time with family, or managing their finances? A financial planner has specialized skills and carefully crafted infrastructure to efficiently manage your family’s finances. With the right financial planner, an entrepreneur could send a quick email that said, “Hey Jason, please work with my accountant, income this year will break $1M, need to rethink tax strategy. Let’s meet next week.” and the financial planner would get to work while you keep growing your business and your income.
MYTH 4: I will lose control of my money
BUSTED:
At Clear Creek, your financial future and money never leave your control.
Clear Creeks’ Answer:
A fiduciary financial planner and advisor are bound by a legal and ethical responsibility to put your interests first. A financial planner should never make the final decisions regarding your finances. You are entrusting the financial planner to help you steward your finances. They should spend the necessary time to educate you and advise you on what to do but ultimately the final decision is always in your hands.
MYTH 5: I don’t need a financial planner until retirement
BUSTED:
The right financial planner is like compound interest, the sooner you begin leveraging it, the greater the impact.
Clear Creeks’ Answer:
Financial planning is a lot more than just creating a tax-efficient drawdown strategy for retired couples. Financial planners help you direct your financial resources in ways that enhance your current life and prepare you for retirement.
An example would be helping an entrepreneur navigate advanced tax planning when their income grows. CPAs often do not know about or understand things like setting up defined benefit plans, securities-based lines of credit, and entrepreneur-specific insurance strategies.
Financial planners can bring a portfolio of services and a diverse professional council to an entrepreneur’s business. For example, if a small business owner has a few employees, they might consider creating a deferred compensation plan, Clear Creek has a number of experts in this space to give you options.
MYTH 6: I don’t have the capacity to work with a financial planner
BUSTED:
Financial Planners will ultimately save you time and stress.
Clear Creeks’ Answer:
We discussed time a little already but to reiterate, financial planners will save you time through the law of specialization. Financial planners have the specialization and the infrastructure to quickly execute tasks related to an entrepreneur’s financial life.
Let’s say you need to create a 529 account for your newborn, instead of having to research it, do the paperwork, open the account, transfer money, invest, and continually contribute and rebalance; a financial planner can set it up and then work with you on the plan and establish a contribution schedule. A financial planner can save you hundreds of hours a year and a lot of stress.
Financial Planner can set it up and work with you on the plan and how often you’d like to contribute
At Clear Creek, we believe that partnering with us should free up the capacity for you to use and grow your business, spend time with your family, or finally read that book that’s been on your desk for 2 months.
Clear Creek Conclusion
These are just some of the most common myths that we hear about. We have seen the valuable impact a financial planner and advisor can have on business owners, their families, and their businesses. Entrepreneurism runs deep in the culture of Clear Creek and because of that, we can anticipate the needs of our clients and help solve problems related to their finances and their businesses.
You didn’t let myths stop you from becoming a successful business owner, don’t let myths hinder the synergies of partnering with a group of financial planners and advisors.