investing

Financial planning requires team of pros

Don Taylorq_v2.gifDear Dr. Don,
I am trying to find reliable financial planning advice, but am unsure of the differences among the various types of advisers. Which would be the best choice for a "high net worth" recently widowed professional woman with young children?
-- K.S. Selects

a_v2.gifDear K.S.,
I used to think of a financial planner as the quarterback of a team of professionals, calling the plays. But now that very few quarterbacks call their own plays, I think of the planner as the coxswain of a racing shell -- calling the strokes, steering the boat and making sure all the crew members are pulling together toward a common goal.

The team of professionals could include an attorney, accountant, investment professional, insurance agent, trust officer and financial planner. It's possible for these professionals to wear more than one hat if it doesn't have a negative impact on the ability of the group to work together.

The investment adviser doesn't have to be the financial planner. Comprehensive financial planning is a lot more than investment advice. It can include budgeting, taxes, insurance, retirement, college savings and estate planning. A holistic approach to financial planning considers the client's life goals in the plan.

You want the planner to be a fiduciary, which means he or she is required to place the client's interests first. While regulatory reform in the financial services industry is working toward requiring more of its professionals to be held to a fiduciary standard, it's best to ask the planner if he or she is acting as a fiduciary. Registered investment advisers -- who are registered with the Securities and Exchange Commission -- are held to a fiduciary standard.

I'd suggest using a fee-only financial planner. The National Association of Personal Financial Advisors is a good place to start. Interview a few, using the CFP Board of Standards guide "How to Choose a Planner." Since you can't tell the players without a scorecard, I also recommend reading its Web page "Financial Advisers Who May Work With You."

While you describe yourself as being a high-net-worth client, I still recommend reading the Bankrate feature "Financial Planners: Not just for millionaires anymore."

Bankrate's content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate's Terms of Use.

To ask a question of Dr. Don, go to the "Ask the Experts" page, and select one of these topics: "Financing a home," "Saving & Investing" or "Money." Read more Dr. Don columns for additional personal finance advice.

News alert Create a news alert for "investing"

advertisement

          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

Start retirement savings at 24?

Dear Dr. Don, At age 24, I recently started a job working for a corporation. I'm interested in individual retirement accounts. I'd like to look at investing in stocks and bonds and learn more about choosing a 401(k) plan.... Read more

advertisement

Blog

Dr Don Taylor

Munis: If banks sell, do you buy?

Municipal bonds are debt securities issued by state and local governments to finance capital investment and other obligations.  ... Read more

Partner Center
advertisement

Connect with us