Where to find a financial adviser if you're not wealthy

Some advisers cater to middle-income clients

May 09, 2010|By Eileen Ambrose, The Baltimore Sun

David Mrgich of Columbia isn't asking too much. All he wants is an objective financial adviser to review his modest portfolio and see whether it needs fine tuning.

When Mrgich was younger, his father handled his investments. "The nice thing: I knew he had my best interests at heart," he says. Since then, Mrgich has been frustrated trying to find a trustworthy adviser outside the family.

The 46-year-old state recycling coordinator earns around $74,000 a year and has built up a nest egg of about $100,000 — not enough to interest many financial professionals. And Mrgich is wary of those offering free consultations but appear more focused on selling than advising.

"I don't want to buy stuff. I want someone to help me make sense of what I have here. … I need a little bit of guidance," he says. "There are a lot of us in the same boat."

He's right. One of the most frequent questions I get from readers is how someone without big bucks can find a trusted adviser. Some financial experts won't take on clients unless they have a quarter of a million dollars or more in assets. And many investors fear turning over their life savings to professionals interested only in pitching products to earn fat commissions.

The result has been that many middle-income households delayed or avoided getting badly needed professional advice to help them reach financial goals. Perhaps the only good news to come out of the market crash of 2008 is that small investors are increasingly coming to the cold reality that they need help, say financial experts who have noticed an uptick in calls since late last year.

So can the little guy find an objective adviser?

Yes, but it will take some homework to find the right one for you.

The first step is to know what type of advice you need. Are you a do-it-yourselfer needing a quick second opinion, or would you prefer sitting down with a planner for a couple of hours?

If you just want to talk to someone over the phone or through e-mail, consider Myfinancialadvice.com. The Colorado-based group has 100 certified financial planners who do just that. Planners can't sell products to clients or manage their money, says CEO Ron Peremel, who launched the site in 2003.

Myfinancialadvice targets the millions of Americans who aren't rich but might get financial advice only if they take out a loan or buy insurance and mutual funds, says Kevin Condon, a partner in the company. "We put together a service where people can get advice on demand from an expert," he says.

You plug in where you live and what subjects you want to address, and the site brings up profiles of planners licensed in your state. The company does annual background checks on planners so you don't have to, Peremel says. It also provides a free financial check-up.

Once you select a planner and discuss the help you need, the planner will send a proposal that details the services to be provided and the estimated cost. The fee is based on the adviser's hourly rate, which usually runs $150 an hour but can be as much as $400, Peremel says.

Peremel says the service is less time-consuming than face-to-face meetings, and thus less costly. Sessions have ranged from $20 to answer mortgage questions to $1,800 for a comprehensive financial plan. The average session is $210.

If you prefer a face-to-face meeting with a planner, check out the Garrett Planning Network at garrettplanningnetwork.com

The Kansas-based network has about 300 planners in 43 states, including Maryland, who charge by the hour for office visits. Investors in the other seven states can get advice over the phone. Advisers don't sell products or accept commissions.

Planner Sheryl Garrett, who created the network 10 years ago, says the traditional planning model where clients must have a comprehensive financial plan and professional money manager doesn't work for everyone.

"For most of middle America, it's overkill and very expensive," she says.

Hourly rates range from $150 to $300, and clients buy the amount of time they need.

Michael Blair, a planner and accountant in Westminster, joined the network more than a year ago. He worked for a brokerage in the past but says he didn't like selling investments.

His clients now tend to be older workers wanting to know if they have enough to retire, the newly unemployed needing assistance with benefits and severance, and those seeking to get out of debt, he says. He charges $180 an hour.

You also can get referrals from trade groups representing advisers.

The National Association of Personal Financial Advisors represents fee-only planners who don't earn commissions from product sales. At napfa.org, you can search for advisers near you who specialize in middle-income clients or newlyweds and novices.

The Financial Planning Association referral service at fpaforfinancialplanning.org allows you to search for planners based on how they are compensated or by how much money a client must have.

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