Getting good, but cheap, financial advice

Paying an annual retainer fee allows investors with complex tax and investment circumstances to receive ongoing advice throughout the year. The fee may cover several meetings over the course of a year as well as the benefit of calling or visiting anytime on an as-needed basis.

Fee-only planners can also charge on an hourly basis -- on average, about $150 to $300 per hour, says Ben Lewis, communications and marketing manager at the National Association of Personal Finance Advisors.

Some advisers are paid by fees but also take commissions, while others are commission-only.

The problem with commissions: An adviser has an incentive to invest assets in funds that pay better commissions.

There are two schools of thought on taking advice from anyone with a possible conflict of interest.

The first school of thought: Don't do it.

The second school of thought reasons that a competent and well-intentioned financial adviser who also happens to get paid commissions can be as good as a fee-only adviser.

"There are a lot of professionals who are very, very good at their jobs and are paid through commissions," says Kenn Beam Tacchino, director of the New York Life Center for Retirement Income at the American College.

Because they are paid by selling products, your out-of-pocket cost drops. That's because the adviser takes a percentage of your investment off the top rather than sending you a bill for services. Or, in some cases, the adviser may be paid fees by the mutual fund company. But you do need to feel confident taking their recommendations.

Tacchino says that advisers paid only on commission "are not going to do a thorough fee plan where it will cost thousands of dollars and time and effort, but many are conscientious and do a needs analysis."

Using this approach, they may be able to match you up with products to meet your needs.

The website of the Society of Financial Service Professionals provides a short list of commission-based, credentialed, financial planners in your geographic area.

Yuval Bar-Or, Ph.D., and author of "Play to Prosper: The Small Investor's Survival Guide," subscribes to the first school of thought.

It's very important to get "someone with the least amount of conflicts of interest as possible," he says.

He recommends investors go to, the National Association of Personal Financial Advisors, to find a fee-only adviser.

No matter how the adviser is paid, some professional credentials should appear after their name. Though there are many designations, the gold standard is the Certified Financial Planner, or CFP, designation.

The Certified Financial Planner Board of Standards provides a questionnaire investors can use to screen for prospective planners. Bankrate's work sheet also lists important questions. Interview several planners before settling on one. An initial meeting should be free in most cases.

"It's an investment for a person to go and see a qualified CFP because you learn a lot in the process and become self-sufficient thereafter," says Bar-Or.

Investing isn't rocket science, but some good advice at the outset can mean the difference between soaring returns and a painful crash and burn.

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