Garbage In, Garbage Out. I feel that way about 95% of the financial plans I see people bring to me for review. I don’t mean that 95% of the plans are garbage, I mean that 95% of what is contained in the financial plan is garbage. I say this because when I ask clients about the plan someone wrote for them and as we review it together it is clear that either
a) They don’t understand the substance of what is written
b) They don’t know why all those charts and graphs are there
c) Most critically, they never use any of it to help make financial decisions
Sometimes I think that financial plans are written and printed to try and make the advisor look good. If the plan is 100 pages long and looks very complicated and is full of numbers and charts then that helps reinforce the message that the advisor is smarter than you and that you should listen to whatever they tell you.
Barf. Look again at your financial plan. Go through it and mark every page that helps you make a financial decision. If you found more than 5% of the pages helpful to you, then you’re better than most. If not, demand that your plan be written simply and succinctly enough so that you can actually use it. If you feel you need your advisor to show you all of their homework and research before you trust their recommendations, maybe you need a new advisor.
