Where to Find a Fee-Only Financial Planner if You’re of Modest Means
Q. My husband and I are looking for a financial planner. We are both in our 60s and are planning on retiring this December. We have very little money. Can you give us a list of financial planners who are not with brokerage firms or insurance companies?
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A. If you don’t have much money, getting personalized fee-only financial planning is going to be tough. Planners who don’t take commissions typically want to deal with wealthier individuals who can afford their often-considerable fees.
If you search, however, you may be able to find a fee-only planner to take your case at a price you can afford. Or you might find one willing to spend a few hours with you--for a fee--to get you on the right track. You can start with the National Assn. of Personal Financial Advisors, which represents about 600 fee-only planners. You can get a list of its members by calling (888) FEE-ONLY.
You also could look for a certified public accountant who has a personal financial specialist designation. True, some CPA-PFS designees take commissions, but many have flat or hourly rates. You can find a list by visiting https://www.cpapfs.org or by calling (888) 999-9256.
Interview several planners and be honest about your situation. If they can’t help you, ask them to recommend colleagues who might. These colleagues may have less experience, which is why they will take folks with less money. But if your situation is relatively straightforward, that may be all you need.
For more information about choosing a financial planner, visit The Times’ Web site, https://www.latimes.com/finplan.
Bankruptcy as Last Resort
Q. I’m not really sure why I’m writing you, other than to get a confirmation on a decision I’ve made.
I’m 30 and a single parent to three children. I make $24,000 a year and really don’t own anything that could be considered an asset except for my car, which is partly owned by the credit union.
Through a series of bad decisions and bad luck, I found myself $40,000 in debt. Creditors were calling me day and night, including at work. I started working with a credit management company to pay off my debts, but one creditor refused to cooperate and continued to call me at work, which almost cost me my job. I’m now in the process of filing for bankruptcy. I gladly welcome your thoughts on this great defeat, but feel as if I have nothing more to lose besides self-respect.
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A. Well, that, and your credit rating (such as it is) and the opportunity to teach your children something about responsibility.
Given your salary and your family situation, however, you may not have much choice but to renege on your debts.
You might still consider giving the Consumer Credit Counseling Service a call. This nonprofit organization is funded by lenders, unlike the company you were using, which makes most of its money by charging you fees. Consumer Credit Counseling Service negotiates with creditors and can often win you lower interest rates and manageable payments. If nothing else, the service can teach you some money-management skills that you’re sorely lacking; that education could keep you from repeating your mistakes. Check your local telephone book for the number.
Early Mortgage Payoff Revisited
Q. Liz, I have to take issue with your advice to the man who was about to become a stay-at-home dad.
You advised that the couple not pay off their mortgage. Your answer focused on what would happen if the working mother became unemployed. Why not try this instead? Before Dad quits his job, the couple apply for an equity line of credit. They can now pay off the mortgage with their savings while still having access to funds in an emergency. They are going to save a lot of money on the mortgage interest they won’t have to be paying. Furthermore, with one of them no longer earning income, their income tax bracket probably will decline, lessening the tax advantage of carrying a mortgage.
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A. Your approach could work just fine, especially if the couple have a good chunk of their net worth in assets other than their home, such as stocks, bonds and cash. If they don’t, however, paying off their mortgage means they could wind up with one very large egg in one potentially frail basket.
That is one of the most powerful arguments against paying off a mortgage early. Although the interest savings could be significant, the couple could suffer a serious decline in their personal fortunes if the real estate market should turn south.
There is also the issue of where the couple’s money is best spent. Many would argue that over the long run, the family’s savings would be better deployed in the stock market than in paying down their mortgage debt.
As I said before, it’s a complex and personal issue. One-size answers rarely fit all.
Liz Pulliam is a personal finance writer for The Times and a graduate of the certified financial planner training program at UC Irvine. She will answer questions submitted--or inspired--by readers on a variety of financial issues in this column. She regrets that she cannot respond personally to queries. Questions can be sent to her at liz.pulliam@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. For past Money Talk questions and answers, visit The Times’ Web site at https://www.latimes.com/moneytalk.
