Is Financial Planning Necessary for Successful People?

Financial planning may not seem necessary if you already have the income and assets needed to sustain your lifestyle. It seems far more important for those who have not yet achieved financial stability. Unfortunately, that’s not really true.

Once you’ve achieved success, your financial life usually becomes more complicated, not less. Busy lives mean that day-to-day priorities crowd out all the things you should be doing to secure your future and achieve your life goals. Every successful business has a strategic plan, setting goals which will lead to continued prosperity. This time-tested tool for business success can also be applied to your personal life.

Financial planning makes a difference because it provides a path that leads to your personal life goals. Instead of leaving things to chance, you’ll have a systematic, organized map of what you need to be doing to achieve the goals that are important to you. Along the way, you’ll feel organized and more in control.

In our six decades of experience working with successful individuals and families, we’ve helped a lot of people achieve their goals. But we’ve also seen many people who have the means, yet never get on track to doing what they really want to do.

Financial planning helps you other ways too. As you accumulate significant assets, it’s important to understand the investment risk you are taking compared to expected returns. Just because you can afford to take on risk, doesn’t mean you should. Many people learned that lesson in 2008 when taking too much risk resulted in large losses or painful drawdowns.

There are even more benefits from financial planning. It can help provide financial self-defense. Like it or not, we live in a litigious society. As your wealth grows, the unfortunate reality is that you might be targeted for a lawsuit. If you’re a business owner, that’s far more likely. A good estate planning strategy as part of your financial plan can help protect your assets while potentially saving you taxes too.

Putting off your financial planning can be a costly mistake. Another mistake is not thoroughly researching who you’re working with.

Sadly, not all financial advisors are equal. The industry is full of hidden fees and conflicts of interest that few people understand. If you go to see a doctor or hire a lawyer, you can be reasonably sure you are getting objective advice that’s in your best interest. Most people assume that the financial industry works the same way. Unfortunately, that is not the case. In finance, there are very few requirements to be met before an individual can call himself or herself a “financial advisor” or “wealth manager.” They may be an experienced and knowledgeable expert, or they may be a sales person hired by an insurance company or name-brand broker to sell the company’s products.


Talk with a financial advisor today. Contact Lucas Capital Management to see if we’re the right fit.


4 Traits to Look for in a Financial Advisor

Choosing the right financial advisor to entrust your financial future with can be intimidating and confusing. To make the task a little less daunting, here are 4 things to consider when making a decision:

1. Limit Your Search to Fiduciary Advisors

We recommend you only work with financial professionals who serve as your legal fiduciaries. Fiduciaries by law must always put your interests first. If they don’t, you have legal recourse. With non-fiduciary advisors, you have no such protections. Representatives at most of the big brand-name brokerage firms are not fiduciaries and are not held to this higher ethical and legal standard. Instead, they simply have to recommend something “suitable” to you, even if it costs you more and pays them a higher commission.

2. Look for Fee-Only Advisors

Commissioned “advisors” are really salespeople. While they might give you quality financial advice, they only get paid when they sell products, so there is a significant conflict of interest. To avoid those conflicts, look for fee-only financial advisors. Fee-only advisors only get paid by you, through fees, so they have no incentive to push you toward certain products. Your success is aligned with your advisor because the better you do, the better your advisor does. (You are in it together!) Be careful: “Fee-only” is different from “fee-based.” Fee-based advisors charge fees but can also get paid commission for selling you insurance or other products. This can also leave you wondering if you’re being recommended a product or a true solution that is in your best interest.

3. Look for Real Experience Working with Similar Clients

Since there are few regulations and restrictions on who can call themselves a “financial advisor,” it is up to you to determine how competent an advisor is. An advisor might state 15 years of financial services experience, but that experience could be selling life insurance. That’s very different from helping people plan their future and navigate complex financial markets. Be sure to find out a prospective advisor’s qualifications and most importantly, relevant experience, before engaging (or continuing to work) with anyone. You want a team that has hands-on experience helping people like you through all types of market cycles and economic climates. Otherwise, you could be at risk of becoming part of someone’s learning curve.

4. Use Independent Advisors

The large brokerage houses that offer wealth advisory services are usually publicly traded companies focused on generating profits for their shareholders. They will charge you an advisory fee to manage your account and will then fill your portfolio with their own branded mutual funds or investments for which they receive revenue-sharing payments. While the advisory fee is clear to you because you can see it on your quarterly statements, the other fees, which can add even more to the firm’s overall profits, are much more difficult to find and understand.

Bottom Line

Once you’ve achieved success, your financial life usually becomes more complicated, meaning that a financial plan becomes an essential tool for helping you navigate the future.

Financial planning can also help you make objective, non-emotional decisions about your finances.

Choose the right financial advisor to help you make a plan and you will be on your way to achieving your life goals.

So, is financial planning necessary for successful people? Absolutely!