FPA Experts and Survey Cite Reliance on Long-term Plans for Consumers

DENVER, CO -- The Financial Planning Association weighed in on the volatility of the recent shifts in the financial markets and the resulting effect on consumers, as well as the organization’s 23,800-member base. FPA is the largest membership organization for personal financial planning experts in the U.S.

“As advisors, we help our clients plan for the long run and counsel them to not overreact to fear-based market changes like the ones we are seeing now,” said Marty Kurtz, CFP®, AIFA®, 2011 FPA President and President of The Planning Center. “The stock market roller coaster of the past week and a half is being exacerbated by short-term thinking, as well as political and emotional reactions.”

Other FPA members echo Kurtz’s statement and are finding that while their clients certainly have a growing awareness of the “debt debates” in Washington DC and recognize the depth and severity of the nation’s financial situation, they are not exuding panic or reactive behavior. As one FPA member noted: “Investors hate uncertainty but a key aspect of investing is uncertainty and risk. When these moments of ‘economic reckoning’ occur, those who feel the calmest are those who work with advisors to offset risks with appropriate, prudent and balanced financial plans.”

Noted expert and former FPA national president Dr. Dave Yeske, CFP®, Managing Director of Yeske Buie, adds “The reason for having an investment plan is to make it easier to know what to do in times like these. It’s usually better to be resilient than nimble. The way to survive and thrive through all the inevitable ups and downs in the market is to save and invest, diversify and rebalance, and maintain prudent reserves.”

“FPA is in a unique position to take the pulse on both the advisors, and the advisees,” added FPA Executive Director and CEO Marvin W. Tuttle Jr., CAE. “America is confronting its ‘debt demons’, which bodes well for the long term. In the meantime, our constituents are facing uncertain times with great calm and confidence. Comprehensive, long-term planning is helping planners and their clients navigate the crisis with greater ease.”

What Kurtz, Yeske and other experts describe – the importance of having a long-term plan in uncertain times -- is exactly the sentiment expressed by consumers surveyed by FPA just prior to the 2008 recession. Seventy-four percent of those surveyed -- who described themselves as actively engaged in the financial planning process through an ongoing relationship with a professional financial planner -- were more likely to feel prepared during changing market conditions versus only 54 percent of those who were self-directed and not working with an advisor. When comparing the same groups, 82% of those “involved” individuals were more likely to have confidence in coping with the financial impact of unexpected events vs. 57 percent of those working alone.

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