The (Young) Public's Perception of Us
I'm not convinced that they're totally necessary but if you're going
to look for a financial planner, here's how to go about it. While some
financial planners argue that fees, investment returns, education and experience aren't that important when selecting a financial advisor, impartial observers almost always disagree. Case in point is US News' listing of six steps to finding a good financial planner. Their suggestions are as follows:
1. Gather names of at least three planners.
2. Screen for credentials.
3. Understand how the planner is paid.
4. Do a background check.
5. Ask tough questions.
6. Listen to their questions.
As far as advice goes, this is pretty good in our book. However, we
still prefer the DIY approach to personal finances, especially for the
basics. The principles that will get you well ahead of the pack are
simple to understand (a smart sixth grader can grasp most of them[really??]), so
if you have the discipline to make them work, why not invest a bit of
time and become your own financial planner? You can always call in the
"experts" for more complicated issues and questions. But no one will
look out for your financial interests better than you will. That's why the best financial planner is most often the person you see in the mirror. (<--- isn't this scary?)
If you could just get rid of #3, most of the bs about doing it yourself would go away. In my opinion, the solution for all planners is to charge a fee for assets under management. RRs no longer need to defend 12b1 fees, selling arrangements, and commissions. The sooner we get there, the sooner we'll be trusted. Some people will always want to go up and repair their own roof, some will change their own oil, some will cut their own hair, but everyone hates to get hosed.
And the other part of this is, the reason people need to get hosed is to pay for all the layers. We are the people doing the real work, we should cut out the fat in tough times. It's already happening, anyway.