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The Importance of Financial Clarity

People often view financial planning and investing as overwhelming, intimidating, and scary, especially if they must tackle these tasks on their own. They are fearful of making costly mistakes that could influence both their present and future financial well-being. Their trepidation often stems from a lack of background, education, or experience to help them adequately cope with the financial side of living. In reality, the world of financial planning and investing can be highly complex and difficult. What should investors do?

Investors sometimes find themselves in a similar position as Alice in Lewis Carroll’s Alice’s Adventures in Wonderland who, when coming to a fork in the road, asks the Cheshire cat:

Alice: “Would you tell me, please, which way I ought to go from here?”
Cat: “That depends a good deal on where you want to get to.”
Alice: “I don’t much care where.”
Cat: “Then it doesn’t matter which way you go.”

Unlike Alice, investors should make decisions based on their goals and then determine the appropriate path to get there. Advisers should assist individuals in developing a financial plan that incorporates the client’s values, needs, and wants in order to reach their financial goals.  Assuming investors have well-defined goals, they can take one of two major paths to achieve them.

  • One is to acquire the knowledge needed to do one’s own financial planning and investing…
  • Another is to use the services of an investment professional such as a financial planner or adviser who already has the requisite knowledge, skills, and abilities to carry out these important tasks.

Prism believes that these two paths are not necessarily mutually exclusive, and advocates for a partnership approach to investing. Through this more engaging and educational approach, we aim to harnessing the best of the Investor and Advisors knowledge, resources and ideas.

[1] H. Kent Baker, Ph.D., CFA, CMA and Victor Ricciardi, APC