The Ultimate Guide to Understanding the 12 Tribes of Financial Planning

Introduction

Financial planning is essential for everyone who wishes to achieve their long-term and short-term financial goals. However, different people have different financial needs, and there is no one-size-fits-all approach to financial planning. To cater to this need, financial planners have classified potential clients into twelve different tribes based on their financial goals and needs. In this article, we will discuss the twelve tribes of financial planning in detail.

The 12 Tribes of Financial Planning

The twelve tribes of financial planning are divided into three overarching categories:

Accumulators

Accumulators are individuals who are focused on accumulating wealth over a long period. They are prepared to take risks and have a high appetite for investment risk. Accumulators are generally younger people who have a high earning potential and are not bogged down by financial responsibilities.

The Entrepreneur (or Business Owner)

The entrepreneur is someone who owns and operates a business. They have significant financial responsibilities and are focused on growing their business. They have a high appetite for risk and are prepared to invest money back into their business.

The Professional (or Executive)

The professional or executive is someone who is highly educated and has a high earning potential. They have a secure income and are focused on growing their wealth over the long term.

Consolidators

Consolidators are individuals who have already accumulated significant wealth and are focused on consolidating their position. They have a low appetite for investment risk and are looking for ways to preserve their wealth over the long term.

The Retiree

The retiree is someone who has retired from work and is focused on generating income from their accumulated wealth. They have a low appetite for investment risk and are looking to preserve their wealth over the long term.

The Independent Woman

The independent woman is someone who is focused on managing her wealth independently. She has accumulated wealth through her own efforts and is looking for ways to preserve it over the long term.

Transactors

Transactors are individuals who are focused on achieving specific financial goals over a short period. They have a low appetite for investment risk and are happy to rely on regular income streams, such as their salary.

The Saver

The saver is someone who is focused on saving money. They have a low appetite for investment risk and are happy to rely on regular income streams, such as their salary, to achieve their financial goals.

The Inheritor

The inheritor is someone who has inherited wealth. They have a low appetite for investment risk and are looking for ways to preserve their wealth over the long term.

The Trader

The trader is someone who is focused on generating wealth through short-term trades and investments. They have a high appetite for investment risk and are prepared to take risks to achieve their financial goals.

The Importance of Understanding Your Tribe

By understanding which tribe you belong to, you can work with a financial planner to create a financial plan that is tailored to your needs and goals. For example, if you are an accumulator, your financial planner may recommend investments that have higher risk but offer higher potential returns. On the other hand, if you are a consolidator, your financial planner may recommend investments that are more conservative and focused on preserving your wealth.

Conclusion

Understanding the twelve tribes of financial planning is essential when it comes to creating a personalized financial plan. By identifying which tribe you belong to, you can work with a financial planner to create a plan that meets your specific financial goals and needs. Remember, there is no one-size-fits-all approach to financial planning, so take the time to work with a financial planner to create a plan that is tailored to your unique situation.