By Michael Ross
This article was published by ComputorEdge, issue #2312, 2005-03-25, as a feature article, in both their print edition (on pages 24 and 26) and their website.
With the proliferation of personal computers and specialized software applications, Americans are increasingly choosing to prepare their personal income tax forms on their computers. The tax programs not only facilitate calculation of past taxes, but allow future tax planning. At the same time, there has emerged a small but noticeable number of websites that allow the user to enter in all needed tax data on secure web pages, and have the website generate the required forms or file the tax forms electronically.
In general, Americans are becoming more comfortable with utilizing the Internet for several types of money management, such as trading stocks, choosing mutual fund investments, and banking online. Thus it seems only natural that there would be a growing use of online financial planning services. After all, comprehensive financial planning includes money management and tax planning. One would expect to see a large number of Web-based financial planning services, catering to a variety of needs, features, and budgets.
As a result, this author was astonished at the dearth of websites that encompass all of the areas commonly acknowledged to be part of complete financial planning: personal budgeting, tax planning, investment management, retirement planning, loans and mortgages, estate planning, and insurance. It should be noted that this list is probably not exhaustive, nor meant to be, and that each of these topics is a substantial field in its own right.
In what ways do the bulk of the current financial planning websites fail to address the needs of the typical individual? Some firms, such as AdviceAmerica, can be touted by online articles as being available to individuals for self-service use, independent of any professional financial planner. But further digging reveals that they only offer their products to financial service firms and advisors. The matter is further confused by the occasional reference to "online customers working… independently".
Other financial websites employ keywords on their Web pages to gain rank within search engine results, so the average Internet user will be directed to those websites, when searching for online financial planners. But then the trusting individual may eventually discover that the websites found are substantially limited, such as being geared only towards 401(k) planning, or restricted to participants in the retirement plans of particular employers (including some big names, whose pension plans are essentially bankrupt!).
Fortunately, there are a few Web-based resources that could be more than sufficient for the needs of most people looking to do their financial planning by themselves, and avoiding the additional expenses of going through a professional financial planner. The options that best suit your own particular needs and interests, really depend upon what types of planning you need done, how much you want to do it by yourself, how much of the rules and money-saving procedures you would like to learn, and how much money you are willing to spend to get some assistance online.
Of the planning services that are designed for the individual, TMF Money Advisor seems to be the most promising. It is offered by The Motley Fool, an investment website that years ago quickly gained a reputation for focusing on what tools and knowledge the "little guy" needs when competing against Wall Street pros to keep as much of his or her hard-earned money as possible, while accessing investment vehicles such as stocks and mutual funds.
The TMF Money Advisor allows the subscriber to access the financial planning tools (via the Internet) and financial advisers (via telephone) of The Ayco Company, which is owned by Goldman Sachs. By using this service, you can create a personal financial plan, ask questions of the advisers (who are not motivated by any commissions), access self-paced seminars on cash management and retirement, read Motley Fool planning guides, and receive monthly e-mail and online updates.
You can try out the service during a 30-day free trial run, after which time a one-year subscription would cost $199. A two-year subscription goes for $329, and confers some additional benefits, in addition to the savings on the subscription cost over a two-year period. The latter offer comes with a 60-day money-back guarantee. In either case, anyone can at least try out the service for a month or two, and see if it meets their needs.
In addition to, or instead of, the aforesaid service, the individual who is interested in learning more about what is involved in wise financial planning, could take a look at MSN Money, a financial and investment website run by Microsoft. It has sections on banking, loans, investments, taxes, and planning — including retirement, savings, insurance, and college. Moreover, they have online message boards and chat rooms. For readers outside of the U.S., this might be the most promising website to use, because it has sections geared towards nine other major industrial countries.
CNN Money's free Retirement Planner takes into account your age, life expectancy, salary, raises, current savings, and other factors that will affect how early you can retire, and how dependent you will be upon Social Security (i.e., the U.S. government's ability to tax the next generation of workers).
Last but not least, the AARP's Financial Planning page has numerous articles, with advice on such matters as creating financial plans, planning your estate, working with financial advisers, and selecting insurance policies, as well as investing and banking online.
Help from the Pros
If you are a little less than comfortable with the thought of planning your financial future with no assistance beyond that discussed above, then you can always use the Internet to locate a professional financial planner. This approach would undoubtedly be best suited for anyone who prefers dealing with a known and dedicated person for any sort of planning and filing of one's money matters. This could be best for you if you are the sort of person who prefers talking with a bank officer than interacting with an ATM machine.
In this case, your first stop might be the website of the Certified Financial Planner (CFP) Board of Standards, which is a membership and regulatory organization. Their search page can help you locate a professional financial planner in your area. Another organization is the Financial Planning Association, which has standards of education, ethics, and experience to which its members must adhere.
Whether you decide to go it alone, or get some in-person help, the Internet can be a useful tool in your planning a stress-free financial future. Knowledge is power, and the financial knowledge you gain will likely pay off as greater buying power in your future.
Copyright © 2005 Michael J. Ross. All rights reserved.