Today's Wall Street Journal had a refreshing article on how financial planners are actively pursuing both Gen Y and Gen X accounts "banking on their ability to help today's young investor become tomorrow's "big" client." This is great news for Gen Y because it means that certified financial planners - those with the official CFP designation - will continue to offer services to us at attractive rates. Since millennials are just beginning to receive steady streams of income from their first jobs/careers, CFPs are looking at us as attractive targets because they realize how much wealth we have the potential to accumulate over a lifetime. By becoming our advisor early on in life, the CFP realizes that they more wealth they help us build, the greater advisory fee they will earn when our assets grow.
CFPs are a great resource because it's very difficult for most investors with little time or energy to manage their assets appropriately. Investors should stick with fee-only advisors - those who are paid a flat-rate rather than via commission like a stockbroker may be. This helps align the CFP's interest in formulating an investment policy with your own interest in building wealth because it eliminates potential conflicts of interest arising from commission-based advisors who prefer to see you more active as that activity helps generate revenue for them (but not necessarily for you).
The only disconcerting part of the article came when I read the following, "Young investors tend to be focused on their immediate financial needs, he says, such as buying a house for their growing family or booking their next vacation. Retirement is important, too, but it's not foremost in these clients' minds."
It's never too early to think about retirement, and by saving and planning for it today, you eliminate any potential problems or headaches you may experience down the road if you decide to wait too long to get started.
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