Early Advice Big Help, No Matter How Tiny the Assets
Early Advice Big Help,
No Matter How Tiny the Assets
January 9, 2005 Sunday
A few months back, Ilene Davis, a certified financial planner, sent me her thoughts on do-it-yourself investing, arguing that "just about every survey of the wealthy shows that most use financial advisers."
She continued: "Gee, could it be that those smart enough to make a lot of money and even smarter enough to save a lot of money know it sometimes helps to have two heads."
Granted, Davis has a vested interest in the issue, but considering the myriad financial decisions we face, we could all use a little expert help.
But, as a young investor groaned in another message, not all advisers are affordable or interested in managing just a pocketful of assets.
This seeming stalemate, on top of growing concern about financial literacy, has alarmed the industry.
"The statistics set the stage for what we're looking at," says Carl George, a certified public accountant and chairman of the National CPA Financial Literacy Commission.
College students on average graduate with about $3,300 in credit card debt alone, according to Nellie Mae, the largest nonprofit provider of student loans. And several studies show that many young workers are not taking advantage of employer-sponsored retirement accounts.
To counter this trend, free and low-cost resources are being rolled out to help educate investors--no matter their net worth--and even provide personalized advice.
Some employers now offer free or discounted advisory services to 401(k) participants, though the help, which may include portfolio management, generally is limited to your retirement planning.
For other financial dilemmas, turn to America Saves ( www.americasaves.org), a national saving campaign headed by the Consumer Federation of America. The free membership earns you one e-mail or telephone consultation with a financial planner.
Citibank also offers a consultation through its Citipro financial checkup, which pairs you with a bank representative to review your spending habits and investment goals, among other things ( www.citibank.com). The service is free and you don't need a Citibank account to be eligible.
However, Barbara Roper, director of investor protection for the consumer group, cautions that "advice that's free usually isn't advice, it's a sales pitch."
If you are receiving more sales pressure than legitimate help, you may want to consider meeting with a financial planner.
Since many financial planners charge an hourly rate, usually from $120 to $180, instead of a commission, it's generally believed a fee-only adviser is more objective in meeting your goals.
"Sometimes one hour is sufficient to get you up and running," says BruceBrinkman, a financial planner in Rockford. "And there is a free initial consultation where we hear what your needs are and give a fee quote."
The Garrett Planning Network (www.garrettplanningnetwork.com) is a national database of fee-only advisers that's designed for middle-income investors and those just starting out.
Some planners may carry a certified financial planner, or CFP, title, awarded to those who pass additional exams through the Certified Financial Planner Board of Standards (www.cfp.net).
Brinkman also works with www.MyFinancialAdvice.com, an online advisory firm that connects you to planners by phone or e-mail. Fees again are charged on a per-use basis but, depending on the extent of your project, can cost from just $10 up to $700.
To minimize your reliance on financial advisers, and therefore the fees you pay, some do-it-yourself investing can be mastered with the help of financial education. The American Institute of Certified Public Accountants' personal finance Web site, www.360FinancialLiteracy.org, is a good place to start, as is www.mymoney.gov.
And almost everyone needs some guidance. Mickey Scheffki is a CPA who helps head the Illinois CPA Society's Young Professionals, a network of young workers in the financial industry. Among the programs offered is personal finance education.
"You would think that finance and accounting professionals would know that," Scheffki says, "but many need that practical knowledge when they're first out of college."
Primary Press Contact
The Consumer Federation of America
Attn: America Saves Campaign
1620 Eye St NW, Suite 200
Washington, DC 20006
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