Everyone knows you’re good at anything you put your mind to. And if you just had the time you could untangle your personal finances just like that. But it’s just too distracting to ponder that credit card debt, student loan and mortgage payment when you have to put all of your energy into your clients and that next big thing.
Fine, if you want to play it that way. But let’s just ponder the possibility that your lack of expertise in this particular area has been keeping you from resolving your money mess, and sending your stress levels skyward. There are actually professionals out there who can expertly and efficiently help you think through the rat’s nest you call a budget, get you on the right track—and ease your stress. It will be pennies well spent, guaranteed.
But, just as when someone tries to hire the right lawyer, it isn’t always that easy to figure out what you need or who fits that bill. It’s complicated. So here’s the scoop.
Financial Planners are generalists who can help you with every possible aspect of your financial circumstances, from student loands to budgeting to investments. They can work with you to identify and then plan for big-picture items like a house, higher education or retirement. There are several types of planners:
- “Commission only” means she charges a commission on all products she sells you.
- “Fee-based” means there will be a consultation fee and possibly a commission.
- The “salaried” planner is paid by the investment firm he works for and it isn’t tied to what you do with the advice you get.
- “Fee-only” planners charge by the hour, by the percentage of assets managed or by a flat fee or retainer. This planner doesn’t get compensated by the companies he recommends.
Conventional wisdom says you’re wisest to go with a fee-only planner since he can’t move your money around just to get commission. But it’s a personal choice.
How to find a good one? The website www.fpaforfinancialplanning.org lets you search by how planners charge, your net worth, or a particular area of financial concern. Look for the designation Certified Financial Planner (CFP).
Fees vary enormously, but expect to pay somewhere between $150 and $300 per hour for a fee-only planner. Commissions tend to run 2 to 7 percent of sales.
Come on. Make this the year you get it all straightened out. Think about how smart you’ll feel.
Merrilyn Tarlton has been helping lawyers and law firms think differently about the business of practicing law since 1984. She was a founder of the Legal Marketing Association, President of the College of Law Practice Management and an LMA Hall of Fame inductee. She blogs about innovation at Get Creative.