When should I get a financial planner? How do I find a financial planner I like? These are some of the biggest personal finance questions we’ve gotten over the years — but I’ve never hired one, so I asked Corporette editor Kate Antoniades to ask the experts for us. This is her first post for Corporette, so a big welcome, Kate! (If you prefer to manage your own money like me, we’ve talked about some of the best starter personal finance books, how to manage multiple accounts, and even what our general money roadmaps look like.) – Kat.
How do you find the right financial planner? And once you do, then what? Reader K, one half of childfree couple (also known as DINK, double-income-no-kids), asks:
My husband and I are early 30s, both professionals, and we are what are considered a childfree couple. We’ve known for many years that we don’t want to have children. We’re at a stage in our lives, financially, where we’d like to consult a financial planner to start mapping out our next money moves. The thing is, we can’t seem to find anyone who might specifically cater to childfree couples. The considerations are different than those with children — estate planning comes to mind first and foremost — and yet, the closest we can get is the LGBT financial planning niche, where the considerations are still not quite the same. Long term health planning is not one of the concerns we find most pressing, actually, so we’re more focusing on retirement and estate planning.
This is a great question that most likely applies to many Corporette readers. Here are the answers to some common questions about finding a financial planner to meet your needs:
Do I need a financial planner?
Choosing to work with a financial advisor is a smart move, says Farnoosh Torabi, financial expert and author of When She Makes More. (She recently shared some relationship advice with us for women breadwinners). “A financial planner can help prioritize your spending, saving, and investing to help you achieve your goals.” He or she can also act as a mediator for couples who are having disagreements about money, she says.
How do I find one?
Financial planners often focus on a particular type of client or on specific situations, says Shannon McLay, a financial planner, author, and entrepreneur. “You have generalists that can help with just about everything like investing, estate planning, and insurance, and then you have specialists who assist specific groups of people with solutions like elder care and special needs, or LGBT couples,” she says.
Torabi and McLay agree that a good first step is to ask friends, family, and colleagues for recommendations. They also suggest checking out online resources, such as NAPFA, NerdWallet, or CFP Board. This Lifehacker post has some good advice as well, coming from the Three Thrifty Guys.
How do I choose the right person?
It may take some time to find the right professional, says Torabi, who recommends interviewing at least four or five planners before making a decision. The first meeting is typically free of charge. “In that meeting you should ask a lot of questions and the planner should show interest in you, your goals, and needs,” says Torabi.
McLay echoes her advice, suggesting that singles and couples meet with several planners with the goal of finding someone you’re comfortable being honest with — there’s a “personal” in “personal finance,” after all — and who listens to what you’re saying.
Should I work with a fee-only advisor, or one who works on commission?
It’s often wise to choose a fee-only planner, says Torabi. Because he or she doesn’t make money off specific recommendations, you don’t have to worry as much about conflicts of interest. How can you tell which kind of planner you’re meeting with? “You have the right to know,” she says. “Ask: Do you charge a fee or is your income based on commission?”
If you choose this option, McLay says, be aware of what you’re being charged for, and watch out for extra fees. “When you utilize the fee-only payment schedule, I would just make sure that you are getting what you pay for from your planner,” she says. “I see many planners who charge fees and don’t necessarily provide results or high quality service.”
How often should I meet with a financial planner?
So you’ve found the right advisor — how often should you get together to discuss your financial life? Torabi recommends meeting on a quarterly basis and also making sure to touch base before significant life changes like marriage, retirement etc.
A lot of people make the mistake of not meeting with their financial planner often enough, says McLay, and in turn, any financial plans that were created don’t get used. “At the very minimum you should meet once or twice a year; however, quarterly is ideal, even if it’s just a phone call,” she says. “Our lives are constantly changing, and regular meetings ensure that you and your planner aren’t missing out on making changes or adjustments to the plan based on your life changes.”
What if I would rather just manage my money on my own? Do I really need to work with a planner?
Not necessarily, says McLay. “I think that if you feel comfortable with your investments and you do the basic investment management process of picking the right asset allocation and rebalancing at least once a year, then you probably do not need a financial planner. … The value of a financial planner is to act as the ultimate backseat driver for your financial journey to retirement. When you find the right one, he or she will keep you on your path.”
Readers, do you have financial planners? How did you find them — and have you ever decided to switch financial planners, or to stop using one?
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