We had a call on the show asking about financial planners. A woman called in to ask about her mother, who has a substantial amount of assets, is 77 years old, doesn’t need the $500,000 she has in cash in money market accounts all over town.
I suggested the woman move all of the money into one account, keep some in cash (because it makes her mother happy) and then talk to a financial planner about investing the rest. I suggested hiring someone who works on an hourly basis. Here’s what one of my listeners (well, the listener’s husband) suggested.
“Unfortunately this is second hand, but my wife told me you had a question concerning finding an hourly fee planner for an upcoming retiree. You should have suggested first that the individual check the “find a planner” link on the FPA (Financial Planning Assoc.)web site www.fpanet.org which has at least 1/2 of the CFP(tm) practitioners listed with their interests and modes of compensation.
There’s nothing wrong with the Garrett Network their mode of practice (which I like), but one has to pay substantial $$ to study with her and join up, which some planners find unnecessary.
The National Association of Personal Financial PlannersNAPFA , likewise, is heavily, although not completely into AUM (assets under management @~1% more or less). For a retiree who wishes to be involved, this can be expensive overkill. After all, a 1% AUM fee is 20% of a 5% retiree’s withdrawal rate and pretty expensive when you think of it that way. It may be worth it if you want complete delegation, but for competent hands on people, it is both expensive and not necessary.
The hourly fee path described by Garrett (Ilyce: Financial planners through the Garrett Planning Network charge by the hour, like attorneys) is preferable and available if you know where to look and I would suggest the fpanet.org site first to check.
Nov. 20, 2006.