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Question: I am a 53-year-old teacher at a state university that offers a Roth 403(b), of which I am taking advantage. However, I have questions about my personal finances and have been seeking a professional who specializes in that area. Does such an animal exist? So far, I have only found stock investment advisers, and even they are not interested in talking to me because my salary is not high enough. Aside from friends, relatives and this website, where do you suggest I look for someone who could take a look at my financial situation and shine a light on, for example, whether to invest in stocks, save for a home, continue to rent or increase my retirement savings? Thank you, Wes, San Diego, CA
Answer: You’ve hit on a real problem in the personal financial advice business.
Like many people, you’d like to work with a well-educated financial planner that can look at your overall financial situation from your portfolio to your living situation. You’d want someone with a credential like a certified financial planner (CFP) and who only charges a flat fee to limit the conflicts of interest. Problem is, that kind of advice is expensive and the planners mostly work with high net worth households. The middle class is largely priced out of this market.
Planners that charge less are often more narrowly focused, perhaps knowledgeable about stocks or life insurance. They aren’t equipped to deal with the broader money picture. What’s more, they usually get paid by earning commissions selling you a product.
That said, there are a few options to investigate. I would check out the fee-only planners at the Garrett Planning Network. The planners charge a fee by the hour. They break down your financial planning questions into pieces as opposed to ginning up comprehensive financial plan. That limits the overall cost of their fees and advice. For example, you could focus on your rent vs. buy question.
Over the years I’ve recommended the website of the National Association of Personal Financial Advisors. It’s a portal into fee-only advisor universe. Most of the planners concentrate on well-heeled clients, but will work by the hour.
My last suggestion comes from Jane Bryant Quinn. She’s simply terrific and I always learn from her. I’ve loved her books and columns over the years and now I regularly visit her blog. (By the way, she recently updated her own comprehensive personal finance book, Making the Most of Your Money Now. Check it out.) Anyway, she recently suggested that middle class people might want to look at advisors associated with the Alliance of Cambridge Advisors. It’s a fee-only network.
I’ve done other posts on what to look for in a financial planner. You can find them here.
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