As inflation has climbed during the past few years, wreaking havoc on even apparently well - organized finances, it also has contributed to huge growth in the demand for professional or semiprofessional help in budgeting and investing.
Clearly, one of the major reasons for saving is to provide for retirement. Investing to ensure a certain standard of living for years to come is vastly more complicated when inflation is running so high it erodes the purchasing power of a fixed income.
The past few years also have seen a general increase in uncertainty about economic prospects and living standards. The decade of the 1970s marked a change from widespread expectations of continued prosperity to fears about the economic future, even among the well-off middle classes.
Inflation also has contributed to a rise in the tax burden among middle-income groups. It has pushed them into higher tax brackets and made many more aware of the bite that tax takes out of their income and keener to keep this to a minimum.
It is small wonder that a new breed of financial advice, which is supposed to take an overall view of a person's or company's finances, has had such success in the past few years.
There are now more than 2,400 "Certified Financial Planners" in the United States, according to William Anthes who runs the Denver course that trained them in financial planning. Most of those who enroll for the course, Anthes explaines, are working professionals in particular branches of the financial services who officially want to add financial planning to their qualifications.
Many other people who have not got CFP (certified financial planner) after their names also practice as financial planners. Some of them do financial planning as a sideline to their main business as insurance dealers, stock brokers, real estate entrepreneurs or purveyors of some other financial service, "So many people call themselves financial planners," said Paul Galanek of the International Association of Financial Planners in Atlanta.
"about 25 percent of our members are what i would consider conceptual financial planners -- people who sit down and gather the financial and emotional data" of their clients and then recommend an overall plan, Galanek commented.
Others may be stockbrokers, real estate agents, insurance brokers or dealers in gold, silver or other commodities. Their job is to work out an overall plan for their client's finances which will include advice on how to maximize their estate, providefor retirement, save to put their children through college, arrange their affairs for after their death and so on.
"retirement is one of the leading goals that most people have. Probably four out of every five plans put as one of their top two or three goals being able to retire without worry or loss of living standards," according to Anthes.
Most plans also involve taxes in someway, said Harry Lister, partner of the Washington financial firm Johnston Lemon Co. Inc.
Lister is a certified financial planner, a board member of the College for Financial Planners in Denver and now does consulting for firms with operations in areas related to financial planning.
The industry is developing in two ways, Lister said. Some large firms, such as brokerage houses in New York are moving into financial planning. Dean Witter, Merrill Lynch, E.F. Hutton are all "putting people through our courses," Anthes said. It is mostusual for them to charge on a commission basis, Lister said. Typically the plan worked out for the client will involve buying securities orinsurance, on which the planner will then charge commission.
There is some tension between the financial planners who work on a commission basis and those, in the minority, who charge fees for the service of preparing the plan, but then usually expect the the client to go elsewhere for its implementation.
Individual financial planners, still a majority among those enrolled at the Denver college, says Anthes, usually charge by fees alone or by a mixture of fee and commisssion, Lister said. Some of those who work for a fee believe that this is the only way to prepare an objective plan, which is not biased towards encouraging individuals to invest in particular securities, commodities or insurance.
On the other hand, Lister pointed out that many clients want to be advised on the implementation of a plan once it has been drawn up. Anthes was clearly unwilling to favor either method. "The field of financial planning is so broad," he said "that I don't know that 'fee only' makes that person better."
Increasingly, firms are offering financial planning as one aspect of fringe benefits given to their employes, Anthes said. Some advice on pensions is likely to be part of the package because"obviously it's a concern to everybody" how they will be provided for in retirement, Galanek said.
Those people who are concerned solelywith retirement, and with converting some of their present income into a formwhich will provide a secure future income, may prefer to get advice on pensions from someone who deals with that and that alone. But clearly the market for all-round financial advice -- including help on pensions with other advice on tax, investments, wills, etc. - is going to continue to grow.
As it does there may be more pressureon the financial planners themselves to organize further.