Anyone have suggestions on a fee-based financial planner (not expensive)? for Questionland Seattle

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Anyone have suggestions on a fee-based financial planner (not expensive)?

We are hoping to work with someone to work on a financial plan for retirement planning, saving for our kid's college education, and other goals. we would like to use a fee-only planner where you pay by the hour or pay a fixed amount for a plan. We don't want someone that will benefit from pushing us towards certain investment products. Any suggestions? We met with one person that we liked but the fee for the plan seemed high: $1600 - $2000 for a plan.

cbone asked in Personal Finance 11 months ago | Report

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I don't know how useful this will be, but I've been working with a financial consultant through the Society for Financial Awareness (SOFA):

http://www.sofausa.org/index

and I've been pretty happy with them. They don't charge anything at all; however, I only had access to them through my job (a non-profit organization that invited SOFA to give a seminar).

They don't push any particular service or investment and seem genuinely interested in simply helping and educating people on personal finances.

You could check it out and see if they have people in Seattle who could help.

Urgutha Forka answered in Personal Finance 11 months ago | Report

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You want someone who charges a fee as a percent of your portfolio. If you make money, they make money. If you are charged a typical 1% and get a return of 7% the cost of the fee is more than payed for by the increase in value of your portfolio. Financial planners who are payed only once do nothing to maintain your accounts and you lose out on all the benefits of having a managed account. The financial world changes too fast to depend on a "one-time" plan. In a down market this can really make a huge difference.

You are right to avoid using anyone who sells you their own financial instrument though.

Kip Waddle answered in Personal Finance 11 months ago | Report

4 comments by cbone, Tom Sackett, and Kip Waddle…

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Thanks for your response. For the most part our accounts are set through employers, so we don't have much by way of holdings that we need someone to manage. We just want a plan that we can execute ourselves -- including advice on how much to save for education, what to prioritize, how to reach our goals. I agree the world changes fast for a one-time plan, so the idea would be to check in periodically to get advice and rebalance as needed. Got names of good advisors?

cbone commented 11 months ago | Report

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I admit the I have limited understanding of how financial advising works (I've worked with two different advisors in the past ten years.), but I think this is bad advice. I wouldn't expect an advisor working on a percentage to spend as much time on her smaller clients.

The kind of advisor Kip describes gets a percentage of your entire portfolio, not just the profit. They might have an interest in making sure your investments grow, but they'll get paid even if the investments lose money.

In addition, they only get paid for the part of your portfolio that they manage. This gives them an incentive to push their own investments over 401ks and other investments that might be a very good deals. I'm also pretty sure that advisors whose fee is based on a percentage of your portfolio are usually the ones who get commissions from some of the investments they offer.

Tom Sackett commented 11 months ago | Report

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Thank you for starting your comment with the disclosure that you have a limited understanding of what you are talking about.

There are all kinds of financial advisers who do all kinds of things. No particular type of compensation is going to prevent the sorts schemes you describe.

One time planning provides NO incentive or accountability to the planner and commission based investing tends to be more trade focused. It is easy to imagine all the ways that someone is going to rip you off but at least with fee based, the planner is primarily interested in your long term success. Fee based investing is the direction most financial firms are moving.

As for Cbone, if your investments are going to stay with your employer and are not substantial, a simple financial plan is likely the best option. I don't have a recommendation for any individuals but suggest you try the GSBA as the financial planners who are members are all trustworthy and at least marginally accountable to the organization. thegsba.org

Kip Waddle commented 11 months ago | Report