Ask Money

Help from a financial planner

Chris Farrell Feb 18, 2010

Question: Is it better to work with a debt counselor before going to a financial planner? That is, do financial planners primarily work with those already standing on their financial feet to plan for the future, or do they take clients “as they are?” Thank you. Kristi, Muncie, IN

Answer: You would think that financial planners would work with people that are starting out or struggling to get their financial lives together. But they don’t.

Financial planners usually work with folks that are at least well positioned in the middle class, with a home, retirement plans, some additional savings, life insurance policies and so on. The most knowledgeable branches of the financial advice industry, such as the fee-only certified financial planners (CFPs), do business with upper income households. To be sure, there are some good financial planning groups that target middle income households, like the Garrett Planning Network. But these networks are the exception.

As an aside, the need of ordinary folks for the kind of financial knowledge and advice the pros can give is behind economist Robert Shiller’s call for the government to offer subsidies so that low-income households can visit with a professional. The one-on-one tutoring could be more effective than handing out software programs or recommending sensible websites. There is nothing wrong with the latter and a lot that is right. Still, most people learn best with a personal touch. I think Shiller’s right. I don’t think it’s going to happen.

Now, if you’re in debt and want to get your financial affairs in order, there are a couple of things you can do. If you’re on a financial precipice I would get in touch with a nearby debt counselor. You can find a legitimate one at the website of the National Foundation for Credit Counseling. If the money issue is more along the lines of it’s time to get out of credit card debt take a look at Reduce Debt, Reduce Stress by Gerri Detweiler, Nancy Castelman and Marc Eisenson (Good Advice Press).

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