When we discuss topics of building wealth you will always hear or read from me about the need for more financial literacy. In all honesty, most of my job is about providing education and behavioral support. According to recent study (link below to full article) young adults with financial education carry less credit card debt, while less than 17% of high school students were required to take a semester with a personal finance based class. Mac Gardner, CFP and I have a discussion on today’s podcast around financial literacy. He comes to our conversation with over 20 + year in the financial industry, an array of accreditations, and author of Motivate Your Money and The Four Money Bears.
Three key pieces I walked away from our conversation with:
How we can start conversations with our young people around money
Why it is so critical to engage in these conversations before our kids are seven! Yes seven!
How our industry can and needs to do a better job of diverse representation
When we tackle these topics at a young age – it provides a solid foundation. Imagine if we had an entire generation and generations to come that have knowledge of the basics and even 102 type topics of finances — how to save, what credit is and how to use it responsibly, how to build an investment strategy, what you need to understand before you buy your first home, etc. Perhaps we wouldn’t have 55% of adults in the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom with financial literacy. Do you find yourself wishing that you had a better understanding of money and how it works?
We also discussed the need for more representation of women and people of color in our industry. It is a highly concentrated industry employed by white men older than 55. While we are not the only industry with this same concentration we have an interesting transformation coming. There are 10,000 baby boomers over the age of 65 retiring every day, which means we are expected to see a vacancy in our industry allowing for a level of transformation. Often in the past our industry was driven by sales rather than planning and you are starting to see a shift into the fiduciary and planning focuses — which have you as the client at the center and not driven by high commissions.
In addition, to the shift in advisors, we also have a shift in the transfer of wealth. Approximately, $30 trillion in wealth will transition to women over the next decade according to a 2020 research study by McKinsley & Company. Not only that, according to the same study, $10 trillion of the financial household in the United States is woman are the primary or only decision makers on. Men and women who follow a traditional way of gender thinking, usually think about money, finances, and wealth differently. Men tend to be more adventure seekers, willing to take the risks of investing even if they lose, they have the tendency to focus more on investment growth and rate of return than the overall financial planning principles – goal setting, insurance planning, estate planning, and tax planning. On the flip side those that have more of a feminine thought process focus on a strong foundation, educating themselves, what are they getting for the fees that they are paying, what are the specific companies that they are invested in and the values/impacts of those companies to the greater good, finding an advisor that aligns with their values, and how their money and the decision they make with it will impact them and those around them.
When we think about the power shifts of the financial industry and those that are in control of wealth I think of three big areas that we can transform and empower this shift:
Financial empowerment, education, and literacy – give people the knowledge to soar!
Focus on financial planning and what you will experience and be able to impact with your wealth
Stay conscious of the companies and where our funds are invested – how are they aligned with our values and making a difference in the world.
As I continue on this year these will be the three key focuses on information I bring to you. I encourage you to subscribe to the podcast as I bring other resources and professionals to discuss these topics and others that will be related. If you are currently exploring a relationship with a financial profession I would be honored to walk in that space with you. There are links below to subscribe to our podcast and to schedule time with me — there is no time like the present.
FIND OUT MORE ABOUT MAC GARDNER, CFP and The Four Money Bears:
Securities offered through LPL Financial, a member of FINRA/SIPC. Advisory services offered through Advisors’ Pride, a SEC registered investment advisor. LPL Financial, Advisors’ Pride, Forethought Planning and the guests of Thrive For[e]ward podcast are separate and unaffiliated parties. Any of the parties listed above are not affiliated with Forethought Planning, Advisor’s Pride, or LPL Financial. The views expressed here are those of the participants, and not those of Forethought Planning, Advisor’s Pride, or LPL financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. LPL Financial and Forethought Planning do not offer legal services.