DIY or Not: Should I Get a Financial Planner?

Alden Wicker
Posted

Sometimes it’s heaven to have someone do it all for you.

We like to have our cuticles pushed back by a professional while we read a magazine. Sometimes it’s nice to have dinner prepared by a chef and wine poured by a server. And while we can surely wing it a bit on our own when it comes to our hair, sometimes we just need a pro.

That applies to money, too. We encourage all women to be in full control of their money and always know what’s going on with their finances. But wouldn’t it be nice if someone could just give you all the answers, maybe even make bank runs for you?

In this edition of our DIY or Not series, we asked LearnVest’s in-house Certified Financial PlannerTM, Lauren Lyons Cole, when we should bring our money questions to an expert, and when it’s okay to take care of your money yourself. Read on for her straightforward, insider’s take.

Call Me If:

You’ve Just Hit the Jackpot

Windfalls like lottery winnings (not so likely) or lawsuits and inheritances (more likely) are great times to speak with a planner to maximize your lump sum. If you’ve reached a new salary level and are making six figures for the first time, it’s also a great time to seek out a planner.

If you have a lot of “dumb” questions, you’ll want to ask someone you feel comfortable with.

You Have an Aging Parent

Many of us will have to take care of our parents and their finances at some point in our lives, which can be tricky. Finding a planner you trust can be a wonderful way to deal with aging parents. Estate planning details, long-term care insurance, life insurance…all these things are better left to a professional.

You’re Prepared to Put in Effort

If you decide to work with an affordable planner that charges by the hour, you’ll have someone to answer your questions and put you on the right track. But getting to your goals will still require a level of commitment and willingness to put in the work. (You know, like following that plan.) They won’t be handling everything for you. Or…

You Have More Than $250,000

If you are one of the lucky few who needs to figure out what to do with a large nest egg, you might want a professional helping you out. Many planners use a “concierge”  approach for wealthier clients, in which they take care of all their financial tasks (sometimes even to the point of depositing checks for them). That level of service is more expensive and the kind of planners who take a hands-on, long-term approach often require a minimum of $250,000 to $500,00–or even more–in investable assets. (That means cash in the bank, not the value of your home.)

Lauren Lyons Cole

Lauren Lyons Cole, LV's In-House Certified Financial Planner

Don’t Call Me If:

You’re on the Right Track

Some people are on the right path and doing the right thing on their own. At various points everyone can benefit from using a CFP, but if you’re coasting along and have everything in order, then go with it. (Make sure it stays that way with LV’s monthly financial to-dos.)

You’re Underwater

For someone who is deep in debt, a good resource is the National Foundation for Credit Counseling. Credit counselors will be more effective in helping you handle this issue. After all, that’s what they’re there for.

Maybe Call Me If:

You Want a Basic Financial Roadmap

If you are interested in creating a basic financial roadmap, you could always work with someone who charges an hourly rate. There aren’t a lot of them, but you can start by looking on the Garrett Planning Network, a great resource.

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You’ve Had a Big Life Change

If you’re undergoing a major life change like getting married, having a baby, changing jobs, or dealing with a major illness, it might be a good time to consider working with a financial planner. Talking to a neutral third party about strategies for combining finances makes a lot of sense, as does planning for your new baby’s college education 18 years down the road. (To find out how to prepare for a baby, use the LV checklist.)

Find Your Perfect Planner

1. Start by searching for a planner. Visit LearnVest’s Advice Center for access to LV’s Financial Planning Team for a customized financial roadmap. You can also find a planner at either the CFP Board Of Standards website or the Garrett Planning Network

2. Try to find a female CFP. The Allianz “Women, Money, And Power” study showed that women often prefer working with female financial planners because they tend to be more caring and understanding.

3. Find a good match. You want to screen a financial planner the same way you would screen a therapist. You need to click with your CFP. For example, if you have a lot of “dumb” questions, you need to find someone you’ll feel comfortable asking.

4. Check their credentials. You also want to find someone who has credentials you can trust and who strikes you as intelligent. Look for certifications like Certified Financial PlannerTM, Chartered Financial Consultant (ChFC), or Personal Financial Specialist (CPA/PFS).

5. Know your questions ahead of time. Rates vary by geographic location and the experience and credentials of the planner, but if you decide to go with hourly service, you’ll pay somewhere from $150 to $350 per hour. Knowing that, it’s important to come prepared to a meeting so you don’t waste your money and your planner’s time. When meeting with a CFP for the first time, bring all of your financial information with you…everything from a pay stub to your mortgage documents (and everything in between). Check out the CFP Board’s Personal Data Organizer to find out what you will need.

If you think you can’t afford a planner, think again: Check out the LearnVest Advice Center to see how affordable access to a financial planner can be.

  • Katie

    This is helpful – thank you!

  • Katie

    This is helpful – thank you!

  • Katie

    This is helpful – thank you!

  • Katie

    This is helpful – thank you!

  • Katie

    This is helpful – thank you!

  • Katie

    This is helpful – thank you!

  • Swano

    Great article. Good to see the promotion of CFP professionals. The right planner is more important than a financial plan itself. Ask the right questions and make sure you understand fees and compensation when interviewing. The focus should be on getting to know you and your needs.

  • Swano

    Great article. Good to see the promotion of CFP professionals. The right planner is more important than a financial plan itself. Ask the right questions and make sure you understand fees and compensation when interviewing. The focus should be on getting to know you and your needs.

  • ILoveMoney

    How does one become a CFP or PFS? Education/training?

  • ILoveMoney

    How does one become a CFP or PFS? Education/training?

  • Anonymous

    This is probably the most one-sided recommendation I’ve read on LearnVest so far. Disappointing. 
    There are a myriad of reasons why one might want a financial planner (think relevant life stages for example) and a lot more relevant factors in deciding who to go with (for example, what is their fee structure). 

    My wife and I have had a financial planner work with us for the past year and it’s been invaluable in helping us up our game, not just in terms of what financial choices to make but in improving our understanding of finances and financial decisions.

    • Anonymous

      How is this post a “one-sided recommendation”? It covers both of the topics you mentioned. Keep in mind that many readers here, including myself, don’t have the benefit of a double salary in their household; what seems like a no-brainer to you is out of reach for a lot of other people. I found this post quite helpful.

    • Anonymous

      How is this post a “one-sided recommendation”? It covers both of the topics you mentioned. Keep in mind that many readers here, including myself, don’t have the benefit of a double salary in their household; what seems like a no-brainer to you is out of reach for a lot of other people. I found this post quite helpful.

    • Anonymous

      How is this post a “one-sided recommendation”? It covers both of the topics you mentioned. Keep in mind that many readers here, including myself, don’t have the benefit of a double salary in their household; what seems like a no-brainer to you is out of reach for a lot of other people. I found this post quite helpful.

    • Anonymous

      How is this post a “one-sided recommendation”? It covers both of the topics you mentioned. Keep in mind that many readers here, including myself, don’t have the benefit of a double salary in their household; what seems like a no-brainer to you is out of reach for a lot of other people. I found this post quite helpful.

    • Anonymous

      How is this post a “one-sided recommendation”? It covers both of the topics you mentioned. Keep in mind that many readers here, including myself, don’t have the benefit of a double salary in their household; what seems like a no-brainer to you is out of reach for a lot of other people. I found this post quite helpful.

    • Anonymous

      How is this post a “one-sided recommendation”? It covers both of the topics you mentioned. Keep in mind that many readers here, including myself, don’t have the benefit of a double salary in their household; what seems like a no-brainer to you is out of reach for a lot of other people. I found this post quite helpful.

  • Anonymous

    This is probably the most one-sided recommendation I’ve read on LearnVest so far. Disappointing. 
    There are a myriad of reasons why one might want a financial planner (think relevant life stages for example) and a lot more relevant factors in deciding who to go with (for example, what is their fee structure). 

    My wife and I have had a financial planner work with us for the past year and it’s been invaluable in helping us up our game, not just in terms of what financial choices to make but in improving our understanding of finances and financial decisions.

  • Shannon

    Love this  article. I’ve definitely been considering meeting with a financial planner recently, and this covers all the bases on how to approach it. Thanks!

  • Shannon

    Love this  article. I’ve definitely been considering meeting with a financial planner recently, and this covers all the bases on how to approach it. Thanks!

  • Shannon

    Love this  article. I’ve definitely been considering meeting with a financial planner recently, and this covers all the bases on how to approach it. Thanks!

  • Shannon

    Love this  article. I’ve definitely been considering meeting with a financial planner recently, and this covers all the bases on how to approach it. Thanks!

  • http://kathrynsconversations.com Kathryn C

    Great article! And don’t forget to ask about fees! fee based vs fee only are very different. This article mostly references fee only, but I have a lot of friends who get referred to fee based and then get hammered on fees as a result of some of the investment recommendations that the planner gives them. 

  • Eric Reyes

    I think this article sends the entirely wrong message that comprehensive financial planning is really only available and necessary for those that hit the jackpot, have greater than $250,000 to invest, or if you have an aging parent.  The original question was not, “when does it make sense for you as a CFP to see a client based on your profitability.”  I am totally astounded that this article says not to call a financial planner if you have tons of debt, unless you also have tons of cash, so the planner can cash in on you with big fees or big commissions. That may not be what the author meant, but that is the message it sends to the the average American that makes up 90% of all Americans.  The question asked was “Should I get a financial planner?”  The answer should be absolutely yes, if you have any of the following needs: 
    1. Need a plan to retire and not have to work until age 100.
    2. Need a plan to save for your kid’s college.
    3. Ensure that you have the proper life, disability, health, and property insurance as well as proper wills, and trusts to protect your assets.
    4. For “Do it yourself” investor,  just want a professional opinion to ensure that you are on the right track.
    5. Need help with financial planning for your business
    6. You are already in retirement and need a investment and cash flow plan to ensure that your money will last
    7. If you are facing a life event such as marriage, divorce, death of family member, birth of new child, saving to buy a home, or wanting to pay down debt, and save more.
    7. If you have a pulse, and you live on the planet Earth.

    The average American has negative net worth with loads of consumer debt, few assets and no financial plan for their future. The average American over age 50, has less than $25,000 in personal retirement savings. Social Security will collapse in the next 15 to 20 years without major reductions in benefits and we will have another financial catastrophe with millions of Seniors not having enough money to live on.  

    If we continue to tell Americans that comprehensive financial planning is only available to the wealthy, then there is no end in sight to our national personal financial crisis.

    There are plenty of financial planners from Garrett Planning network and other private fee-only financial planning firms that will be more than happy to provide unbiased fiduciary advise for a fair hourly or retainer basis with no sales commissions and no fear that a commissioned sales broker is ripping you off. It doesn’t matter how much debt you have or how few assets.  Cancel your cable for 6 months and save up your Starbucks coffe money, and you will have plenty of money to a comprehensive financial plan for a fee-only hourly CFP that help turn around your financial life and give you a plan for the future.