Hiring a Financial Advisor???

[jgenie]

We've always managed our money on our own, but we want to meet with a financial advisor to make sure we're on track and to make sure we have enough coverage now that we have DS and the new baby on the way. Our attorney has recommended a financial advisor. The advisor is in NYC which would mean schlepping us all to the city unless we can arrange for a Saturday meeting and a sitter. What questions should we be asking? I would really like to try to ask as many questions over the phone as possible to keep us from making an unnecessary trip. Anyone BTDT? Thoughts / tips? TIA

[SkyrMommy]

DH is a financial advisor... I would suggest making a list of all your debt/income/investments and current $ and status of all of them. Also he runs through a goal analysis that reaches everything (he does not charge for this - you should check in advance though as some advisors do); children's college, traveling, home remodeling or relocating, future purchases, retirement ages (wished for and actual), income to lived on currently, project income when retired... it requires quite of bit of future thinking in terms of lifestyle for his clients and then lots of work for him to make sure they stay on track for their goals.

Also ask some maintenance/office questions; availability to answer questions down the road, does the advisor work as part of a team that would all be on board with your long term plan/investments or solo; if solo how often is he/she out of the office for other appointments/vacations if you need their advice; office turn around for cutting checks, deposit times/requirements... you can also see if the company offers insurance or other financial options like loans or credit lines too, just in case you might have need of them in the future.

... I'll edit and post more if I can think of anything else with DH (he's out in the snow walking the dog!)

[TwinFoxes]

I would recommend going to a fee-only financial planner. Fee only planners are paid by you, they do not get commission on the products they sell. Financial planners who are fee-only get commission, so they aren't always selling the client what's best for them, but is what is best for the planner. Here are a couple of good places to get info:

http://articles.moneycentral.msn.com/RetirementandWills/CreateaPlan/8ThingsYourFinancialPlannerWontTellYou.aspx

http://www.napfa.org/

And the WSJ online just happened to have an article about financial planning yesterday.

http://online.wsj.com/article/SB126005039016378561.html

We met with a financial planner, and told her what our goals were. She looked over our 401k allocations, our savings etc, and told us what we needed to do. She gave us a big binder explaining everything. I think it was worth the money, and we should probably do it again, since our circumstances have changed so much.

Before you meet with him/her you should think about what your goals are (to be able to pay for college for your kids, retire at 60, have a vacation fund every year, pay off the house 10 years early, etc) Ours also asked us how risk-averse we were. At the time, not very because we were younger and didn't have kids. That's something you should think about too. S/he should help you figure out how to reach goals. Again, if they're fee only, they chances of them steering you to financial products that aren't the best for your situation is reduced. (I'm not implying that other financial planners aren't ethical, it's just something to be aware of. Even if something they're selling you isn't bad, you should still know that they're paid spokespeople.)