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Online Financial Planning: Easier Than You Think

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Doug Carey

Key Points

  • Online financial planning is here today. With our powerful planning software, you can now be your own financial planner.
  • You can be in control of you own financial and retirement plan forever.
  • Save thousands of dollars and change your plan whenever you want. You are now empowered.

It used to be that you could sort of tell when it was time to get professional help in managing your investments. You knew, for example, that in your 30s and making a decent salary and socking away a fair amount of money, you probably did not have enough in assets for it to make sense to have professional help--the costs would just be too high. But at some point, with a mortgage and a kid and maybe another one on the way, you might start paying closer attention to those financial planner advertisements on TV or in the local paper, and even give one a call. 

Technology To The Rescue

Technological advances have blown all of that up, at least theoretically. The old model still exists--you can still pay a lot of money for someone to manage your money. But you don't have to. Professional asset management can be had for bargain rates these days, no matter how much you have in assets. Companies like Vanguard have set new standards for how low such fees can be; other fund companies have had to cut fees just to keep up. And investors are paying closer attention to fees, too, more often than ever choosing cheaper offerings when deciding to go with actively managed funds. 

Asset management, banking, tracking your spending, buying a home--all of these aspects of personal finance have evolved dramatically in recent years thanks to technology and the Internet. But there is still an area of personal finance that has not been shaken up as much by technology as one might expect: Financial planning. 

Fees And Conflicts

Just about any basic article you read about investing in mutual funds will have a section about the effects of high fees on your returns over time. We have written about the effects of mutual fund fees ourselves. In short, you're giving up not only the money you're paying in fees, but the compound return you might have earned if that money had been invested. $100 in fees is actually a lot more than $100 over time. 

The same concept applies to financial advice. You're paying a professional for their services, and those services provide value and should not come for free. But how much is too much? A financial plan can cost $2,000 or more, and at least a portion of those costs will often recur every year. 

Then there's the potential for conflict of interest. An advisor paid on commissions when you buy or sell stocks or funds may have something different in mind besides your financial well-being. It's hard to see how a planner's commission-only-based compensation scheme can work in harmony with a cohesive investment strategy for clients. (The Labor Department just yesterday announced major changes to rules on advice from planners, but the conflict-of-interest issue still bears watching: The rules will likely be challenged in court, won't take effect for at least a year from now, and only apply to retirement accounts.) 

Change Has Come: Web-Based & Online Planning Is Here

The transition to online financial planning has been puzzlingly slow. Planning has traditionally been a face-to-face business, so that is surely part of the reason. But lots of other services that used to take place in person now take place online. Why not financial planning? 

The time has finally arrived. With WealthTrace, you can create your own plan, modify it, revisit it, run what-ifs on it, and have access to it 24 x 7. 

You can also get as much--or as little--help as you need from our in-house Chartered Financial Analyst (CFA®). For example, maybe you're comfortable making choices about life insurance for your family, but could really use some help with choosing mutual funds or asset classes. With WealthTrace, you can put together your plan online, and set up some time to go over it with our financial planning expert. We can look over your assumptions, provide financial advice, and answer any finance related questions you might have. 

No commissions, no ongoing annual fees based how much you have in assets. You pay for the services you need, and not for ones you don't. Isn't that how it should be? 

WealthTrace can help you get on track for retirement. Sign up now for a free trial subscription.




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Doug Carey