CFI Blog

Do You Really Need a Financial Planner?

“If you don’t know where you are going, you’ll end up someplace else.”
― Yogi Berra

As many of you know, I arrived at this point on the heels of co-founding and then selling a software development company. Throughout my time there, we had a website (and they still do). We figured that since we were software developers, we could handle our own website. During times when we had someone on the bench, we’d turn that person loose on our website to gussie it up, put a little shine on there, whatever. However, as time passed, and we became more popular, we didn’t have those free hours to dedicate to the website, and, to be honest, there were more interesting projects for our geeks to tackle (by the way, if you’re not in the software industry, I need to tell you that “geek” is a term of endearment in that business).

Thus, we muddled along with an adequate, but not great website for many years. Traffic had slowly but surely been declining, and we didn’t really look into the cause of the problem. We had enough work; we had enough leads. There was no real pressing issue that caused us to look at the website.

Eventually, we started to hear scuttlebutt about government budget constraints causing the potential closure of one of the big projects we had, and the leadership team decided to finally do something about the website. We hired a crack web designer to take a look at our online properties and actually make them useful and valuable again.

She discovered a very basic rookie error that had been in our website for at least a couple of years. Our website was telling Google that there was nothing there and it didn’t need to incorporate all of our pages/blog posts/whatever into search results. It was the Google equivalent of abandoned property. It was also something which any remotely competent developer should know about and avoid.

Yet, we’d made this simple error. When she fixed it, traffic started pouring into the website, as, suddenly, to Google, there was a ton of new and interesting content about Solr, which is a very popular open source search engine.

The cobbler’s kids had been going for years without shoes.

When we were a startup, hiring an outside web designer didn’t make any sense. Three founders had each pitched in $400 to start the company. That went to rent. There was no money for anything else, so we had to use hustle.

However, when we were a much bigger company with sufficient revenues, we were still thinking like that initial seed capital startup and weren’t willing to spend money to keep basic maintenance up on the nuts and bolts of our company – the things which enabled the rest of our geeks to go off and do geeky things. Instead, we continued to scrimp and use bailing wire and duct tape to hold everything else together.

Yet, we see this happen in our lives over and over. How many of us refuse to go to the doctor unless we’re truly sick?


We know that preventive medicine costs much less than reactive medicine, but because it’s a cost that we have to pay now rather than later, we don’t pay it. We don’t want a little pain, such as vaccines or prostate exams, and so we roll the dice and hope that there’s no huge cost (shingles, prostate cancer, you name it) later. We also think that little pains will last for a shorter time than bigger pains.

With our company, things looked fine on the outside. The website was up. You could look for OpenSource Connections on Google and the site would show up. Nothing appeared overtly wrong.

Yet, since the purpose of the website was to allow people to find us through searching for terms like Solr and Hadoop, it was sick as a dog. It had the website equivalent of cancer; at first glance, though, everything seemed just fine.

We thought everything was fine and that the traffic problem was just a phase that Google was going through, and soon enough, we’d feel the Google love again. It wasn’t until we hired an expert that we discovered the underlying issues. The cure was simple (change noindex to doindex in robots.txt for you techies), but since we were wallowing in self-attribution bias, it’s unlikely that we would have ever found the issue on our own.

Am I about to turn this analogy into a justification that everyone needs to see a financial planner just like everyone needs to see the doctor and the dentist?


Let’s face it. The reality is that most people manage to do pretty well, despite having varying sizes of Monkey Brains rattling cages inside of their heads. There’s no point in hiring a financial planner to do the equivalent of taking someone’s watch and telling them what time it is.

Who doesn’t need a financial planner?

does not Need a Financial Planner

  • People who make plans and stick to them. Make a budget every month and don’t deviate even to a penny? Then you are your own financial planner. If you’re spending less than you make every month, growing your assets, won’t be subjected to estate taxes, and have a strong plan in place already, there’s no need unless you just want a sanity check, which, in reality, shouldn’t take more than a few hours to provide.
  • People who are DIYers. If you spend every weekend watching how-to Youtube videos, browsing forums, reading every book you can get your hands on, and self-educate yourself in every subject known to man, then there isn’t going to be that much that a financial planner can teach you. Instead of going to a professional, you’ll seek crowdsourced wisdom from forums that have semi-skilled people who read and respond. 90% of the time, they’ll be right, too.
  • People who pass the “Dave Ramsey” test. If your situation is covered by what the personal finance gurus talk about, you live within your means, and you are going to work 40 years for an employer and get a reasonable pension, then you’re probably in pretty good shape. While I don’t agree with everything that gurus talk about, most of it is good enough for most people, so there’s no need to pay a couple of grand to get the advice you could get for free by checking out a couple of books at the library.

That still leaves a reasonable part of the population who could use a planner.

  • You think you know what to do, but you’re not making the progress you want to make. This was like our situation with our website. We were software developers, for goodness sake, but we were befuddled at why it didn’t do what we wanted. We needed a professional who specialized in something that we didn’t specialize in. If the signs are there that there’s just that something missing which you can’t put your finger on, a professional can help you find the source of the problem.
  • You’re not really a planner. Monkey Brain doesn’t like it when you make his cage smaller, so he goes all out to make sure that you always leave the cage door open for him to roam as he wishes. Sure, you probably have the sense that you shouldn’t go out and finance that yacht, but you probably wind up with lots of smallish purchases which you justify to yourself. At the end of each month, you’re left wondering where the heck your money went. You could have sworn you make enough money, so why isn’t there any left over?
  • You make plans, but you don’t stick to them. If you’re the type of person who wants to go on a diet, goes so far as to buy only chicken, fish, and fresh vegetables from the store, and then goes out to eat all of the time, defeating the benefits of healthy nutrition, then you probably have similar behaviors in your financial life. You probably actually do plan on saving money, and might even go so far as to create automatic drafts, withdrawals, and investments for yourself, but then you go raid the kitty with a very loose definition of an “emergency” to justify tapping into the emergency fund.
  • You have a situation that isn’t covered by the “gurus.” Have a special needs family member? Chronic illness? Large estate? Large income? Own a small business? Want to get into real estate investing? Own a bunch of incentive stock options and don’t know how that will affect your plan? Think you’ll have enough to retire, but aren’t quite sure? Don’t know how much you need to have in assets at age 53, 54, 55, 56, etc.? Want to make sure that you’re managing your withdrawals in retirement in a tax-advantaged manner? Aren’t sure which 529 plan is right for your kids? Don’t know if you should save for your retirement or save for college? Make plenty of money but have a debt that just…doesn’t…seem…to…go…away? I think you get the point. There’s something in your financial life which is causing you angst. You can’t quite sleep soundly at night. You think you’re doing most of the right things, but, despite your best efforts at Googling or finding the book with the answers at Barnes and Noble, you can’t quite get there. That’s when it’s time to get off the hamster wheel and consult a professional.
  • You understand the difference between cost and value. For most people, paying a couple of thousand dollars up front to go through the process of financial planning is not an easy decision. It’s an investment in yourself and your future. However, it comes at a tradeoff. If you’re spending on a financial planner, you’re probably not spending on something else. The way I like to frame up the decision is spend some now to probably be able to spend more in the future versus not spending now and not being sure how much you could spend in the future. 65% of people who use financial planners say their financial security is high or very high and people who have a written plan are 57% more satisfied with how they plan and manage their financial affairs.

Not everyone needs a planner. Any planner who tells you that everyone needs a planner is only looking to line his own pockets. According to the previously cited CFP® Board research, only about 14% of Americans use financial planners. That seems like a reasonable number to me.

I suspect most of you who are reading this are of the DIY variety. For those who are not, what would make you think you needed to use a planner? What would cause you to finally make that decision? Let’s talk about it in the comments below!

Around a year ago, I wrote about how having someone holding you accountable can help with your financial goals. If you haven’t read it, go check it out!

Author Profile

John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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