Thinking about Financial Planning

Our decades of work as fee-only practitioners recognize that a fee-only financial plan must value each individual and couple when crafting the financial plan with the unique and personal objectives the client brings to the table. Much of the established economic theory pre-Thaler is based on the notion that people are rational and all economic choices are, in fact, rational.

This week Richard Thaler was announced as the 2017 Nobel Laureate in Economics based on his work identifying how in many times and situations, we as individuals are, in fact, irrational. His work has been instructive in how we interact with clients in creating financial plans. To be clear, irrationality is not to be construed as a negative, but a unique and special perspective that is part of the broader universe, especially in building a personal financial plan. While the whole universe of individuals maybe is rational, the parts of the whole have unique and likely positive issues to be considered. His books on the subject, Nudge, and Misbehaving are enlightening and I highly recommend them.  Personally, I had the opportunity to meet Professor Thaler and share a meal with him at a conference years ago. I join with many others in congratulating Professor Thaler in his long overdue accomplishment!

In a previous post entitled “Wealth Management: Averages?, Really” the idea of looking at averages and how they can mislead and misinform was explored. At White Oaks, working as fee-only financial advisors, we know each client, whether individual or family, each client bring their own unique experiences and beliefs to the financial planning table. As individuals, we are part of a larger picture, but not necessarily, representative of the “the average”.

Professor Thayer’s work has been instructive in our work as financial advisors over the years. Working with each client, one at a time, we appreciated the unique and special perspective that is needed to craft an effective and ultimately successful financial strategy to meet long-term goals and dreams. Coupled with our fee-only compensation methodology, to assure objectivity, the specialness that each client brings to the financial plan is honored and respected.

The foregoing content reflects the opinions of White Oaks Wealth Advisors and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.

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