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Day 15 – Hiring Financial Help
By JLP | April 12, 2006
I don’t think anything can be more confusing or intimidating to people than hiring financial help. We have all heard stories of how people were taken advantage of by financial planners, advisors, and insurance agents. For this post, I will concentrate on hiring a financial planner.
Now, before we go any further, I want you to know that I am a financial planner. I am a fee-only planner, which means I get paid directly by my client rather than a third party (like an insurance company or mutual fund company). I like this arrangement because my clients know exactly how much I am getting paid, which I think is the way it should be. There are other ways to pay for advice. I discussed them in Day 5 – Investing in Mutual Funds.
Although I think the commission-based planning model is flawed, there are honest financial planners/advisors who work from this model. Two of them are blogger-friends of mine. I’m talking about The Happy Capitalist and RarelyRight. I can tell from conversations with these two guys that they have their client’s best interest at heart. Therefore, I wouldn’t hesitate to recommend them to my friends.
The National Association of Personal Financial Advisors (NAPFA) offers a checklist as well as an extensive review form that you can work off of when selecting a financial planner.
If you decide to go the fee-only route, expect to pay anywhere from $150 – $300 or more per hour. Some planners may agree to work on your most important issues instead of drafting a complete financial plan. This is great for younger clients who don’t really need an exhaustive financial plan but still need guidance on topics like 401(k)s, college funding, or life insurance.
This is a good topic. I’ll try to write more about this in the future. For now, check out what these other bloggers have to say about hiring financial help:
FreeMoneyFinance:
Make Sure Your Financial Advisor is Not a Loser
How to Choose a Financial Advisor
Operate Your Household Like a Business when Hiring a Financial Advisor
Hiring the Wrong Financial Advisor is Bad for Your Net Worth
Help! I Need a Money Adviser, not a Salesperson
TheHappyCapitalist:
Topics: Basics, Financial Planning | 2 Comments »
April 13th, 2006 at 1:54 pm
ha ha I see you’re back at it. I was just about to send you my weekly email to bug you. LOL
This is good information. Especially since I’m about to make quite a few financial changes and was considering going to a planner. Thanks!
April 14th, 2006 at 10:07 am
JLP: I suppose I should bring you up to date. After more than 11 years with a couple of the largest brokerage firms in the world, on March 1st I accepted a position with a small investment management firm running their financial planning offer. So far, it’s been great fun and very challenging. The long hours adjusting to my new role explain why my blogging has been so light. Thanks for your kind mention.