What Does Financial Freedom Mean To You? 3 Financial Freedoms You Should Consider


It’s that time of the year when we celebrate the many freedoms we enjoy as Americans. Hopefully, as you enjoy a parade, watch some fireworks or grill our favorite food, you’ll get a chance think a bit about this remarkable country we live in.

The long weekend may also provide a few extra minutes to consider what financial freedom means to you. Everyone will have a different idea of the term, but here are our thoughts on what financial freedom should mean to you:


1. Financial freedom is knowing you have a plan

Gallup reports [i]that over half (54%) of Americans are worried about having enough money for retirement. Often what fuels worry is the unknown – the uncertainty of how you’ll manage events or circumstances beyond your control.

Financial plans are built to enable you to set goals and have a more refined picture of the future, and how you’d achieve it, even in the face of the unknown.

Good financial planners will chart a course based on your personal goals, your risk tolerance, and then run thousands of scenarios to stress-test your plan against a wide range of outcomes.  The result – a plan that could set you free from fear of the unknown.


2. Financial freedom is knowing you’ve been offered investments that are in your best interests, not your adviser’s

A recent survey [ii]shows that more than 7 in ten Americans say they are scared of talking to a financial advisor, with their chief fear being that it may “end up costing me a lot of money.”

That reaction might sound like irrational fear. It actually outpaces our fear of an IRS audit[iii]. But those fears may be validated once you discover what financial professionals think of their own field.

A CFA institute survey [iv]of over one thousand investment industry leaders asked them to react to a simple statement: “Clients are often sold inappropriate financial products.”

Of the over one thousand investment industry leaders, only 22 percent disagreed or strongly disagreed. Your fears may be well-placed after all.

The simplest way to move from the fear of being sold inappropriate financial products to financial freedom is to seek out an advisor committed to fiduciary care. A fiduciary is obligated to act in your best interest while disclosing and avoiding conflicts of interest. There’s a freedom in knowing the advice you’re receiving isn’t based solely on enriching your advisor.


3. Financial freedom is knowing what your costs are

Your quarterly financial statement may be so dense and lengthy that you might not catch the many different ways your financial professional is being compensated.

The fine print can contain descriptions of compensation from the product the person is selling you, fees to back-end costs, and then the opaque compensation structure of a proprietary product – a product created by your salesperson or his firm.

Sometimes, proprietary products will be described as having no fees or commissions, but the truth is even a savvy investor might not catch invisible fees[v].

Freedom often starts with trust. Find an advisor who doesn’t sell proprietary products, and who can present you with a clear, straightforward cost structure.

Financial freedom can often begin with honesty – honesty to yourself about your goals and future, honesty between your advisor and you, and honesty in how your advisor is compensated. Here’s hoping you can enjoy that type of financial freedom soon.


If you’re interested in discussing financial freedom with a professional at Annex Wealth Management, click the “get started” button on our newsletter or website, or give us a call at 262-786-6363.


[i] http://www.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx

[ii] http://www.marketwired.com/press-release/financial-advisor-phobia-71-percent-americans-say-they-are-scared-talking-financial-2067524.htm

[iii] http://www.bizjournals.com/washington/news/2017/03/29/most-taxpayers-fear-irs-audits-but-taxpayers-mor.html

[iv] https://www.bloomberg.com/news/features/2017-06-07/fiduciary-rule-fight-brews-while-bad-financial-advisers-multiply

[v] http://money.usnews.com/investing/articles/2017-04-13/financial-advisor-fees-rarely-clear-cut-occasionally-invisible