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Financial Planners for the Rest of Us

You don’t need — or have to pay — a million bucks to get good advice

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En español | Wondering if you’ll be able to retire in five years? Not sure what you can safely spare for your children’s tuition?

A financial adviser could very likely help you answer these and other questions. “This is the time where making bad decisions will affect how you live for the rest of your life,” says Michael Finke, chief academic officer at the American College of Financial Services. “We can benefit from getting knowledge from an expert.”

You can’t get informed, objective advice just anywhere, though. Many pros work only with clients who give them a lot of money to manage on their behalf (often a minimum of $250,000). Others dispense free advice ... while steering people to buy the financial products they’re selling.

But there’s another option: working with a pay-as-you-go financial planner, who can give you unbiased advice and will charge by the task, by the hour or on a subscription basis. It’s not always easy to find one, but the effort can prove invaluable.

What you'll get

A consultation with a pay-as-you-go (or advice-only) planner is like a visit to a family doctor. You can ask about specific concerns, such as “When should my spouse and I take Social Security?” or “Should I buy long-term care insurance?” Or you can get a checkup of your overall finances. A planner can give guidance not only on investments but also on budgets, debt, taxes and retirement planning.

Many advisers rely on technology. So in place of in-person visits, you may communicate via email, telephone and video chats. And you’ll probably have to prep for meetings by filling out forms detailing your financial situation and goals. (Advisers, like health professionals, are practiced at securing personal info.)

The help you’ll get depends on the services offered and your individual needs. You may just have an hour-long chat by phone or computer. You may get a detailed, written action plan to follow. Or you may decide to pay a retainer for regular check-ins.

Where to get help

Most pros earn their living from commissions or money-management fees, so finding one who will take on an advice-only job or who works pay-as-you-go exclusively can be a challenge. Try searching via these organizations.

One last option: Get access to a planner by paying for low-cost computerized money management at a firm such as Schwab (minimum account size for this extra help: $25,000) or Vanguard ($50,000).

What to look for

  • Recommendations. It may take a few phone calls to find a planner right for you and your budget. A pro who isn’t a fit may know one who is.
  • Qualifications. A certified financial planner (CFP) label indicates training and experience in comprehensive planning. Check a CFP’s credentials at letsmakeaplan.org.
  • Compensation. To minimize conflicts of interest, see if a planner is “fee-only,” meaning he or she is paid just by you, not also by third parties such as a fund company. Both the CFP website and plannersearch.org (another industry listing) show if an adviser is fee-only. (All NAPFA members are.) Note: “Fee-based” advisers aren’t fee-only. They can accept commissions.
  • Trustworthiness. An adviser who is a fiduciary is bound to put your interests first. (More on decoding Wall Street buzzwords) Ask if all of a planner’s services fall under fiduciary protections. And look for any red flags on an adviser’s record at the government site investor.gov

What you’ll pay  

Rates vary widely based on location and other factors. A rough guide:

  • Hourly fees can start at around $150. If you pay this way, ask in advance how long a job will take.
  • A flat fee for specific work, such as a comprehensive financial plan, can run from $1,500 to $5,000. This might include a retirement-income estimate, Social Security claiming strategies and a review of your insurance coverage. 
  • Monthly fees often begin at $100 to $200.

Seems expensive? The dollar value of good advice, Finke says, “can far exceed the money you would pay for an adviser.” And an adviser can be helpful for almost anyone. “I still use a professional,” he says. “And I’m a professor in financial planning!”

Stephanie AuWerter is a personal finance journalist and the winner of a Best in Business award from the Society of American Business Editors and Writers.

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