Switching on the Light

Opiela, Nancy
September 2003
Journal of Financial Planning;Sep2003, Vol. 16 Issue 9, p38
Academic Journal
This article provides information on the experiences of financial planners in dealing with situations when clients do not understand basic money concepts. Samuel P. Hull, certified financial planner of Northstar Financial Planning in Bedford, New Hampshire, stating his views about misunderstandings surrounding cash flow, said that people have no money saved and are borrowing to pay off big expenses, like insurance bills. Hull's response is to stress the need to put in the significant time required to get a handle on where the money goes because, as he notes, cash flow is the foundation of the financial plan. On the other hand, just as clients fail to grasp where their money goes, Nancy Langdon Jones, certified financial planner, ATA, of NLJones Inc. in Upland, California, notes that it is also difficult for planners to get across how the client's income needs will be met in retirement. She explains that unsophisticated investors do not understand total return. They will look only at the dividends produced by their portfolio and insist that they cannot retire, that there is not enough money. Additionally, Donald Ray Haas, certified financial planner, ChFC, CLU, of Haas Financial Services in Southfield, Michigan, says clients have a bard time understanding how long they have to make their money last.


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