Assembling Your Financial Dream Team

This month we tackle a subjectthat people always have troublegetting their arms around—findingthe right team of financial and legaladvisors. Eventually most of us admitthat we need help in navigating therocky shoals of financial life. You knowwhat I am talking about: retirementplanning, college for the kids, a home,taxes, and the like. The trick, accordingto the questions I get asked most, is howto find people who we can trust.

Tracking Down the Best

Most people are able to find a locallawyer and CPA simply by askingaround and interviewing a few.Financial advisors are also commonlyavailable, but identifying one is a bitmore daunting. They use a blizzard ofunfamiliar "certifying" letters aftertheir name, for one thing, and youcan't tell one from the other.

Well, briefly, a CFP® is a CertifiedFinancial Planner™, similar to medicalboard certification, and a good placeto start. A CFA, or chartered financialanalyst, with its second level of CIC,or chartered investment counselor, isalso good. Both require study, exams,and continuing education, and areheld accountable. A ChFC, or charteredfinancial consultant, has similarrequirements. Their Web sites can provideyou with more information.

Ignoring the Myths

The biggest myth about such folk isthat they can routinely get you a biggerreturn on your investments thanyou could achieve alone. The reallygood ones may get you a good return,but it's because they saved you fromyourself, gave you new information,or set up a sensible plan, and notbecause they are better investmentpickers. What they are good at is discipline,and they are relatively objectiveabout our money. If financialplanners can rescue us from ourselvesthrough the establishment of a wiser,more organized context, then theyhave earned their keep.

And their fees aren't cheap, whichis a legitimate knock on the industry.First of all, do not align yourself witha commission-based advisor. Theobvious, if potential, conflict of interestis almost always too much of ahurdle to overcome. And if the typicalfee-based advisor's 1 to 1.5% ofmanaged assets seems too steep, considerasking for a flat-fee yearly retaineror even an hourly rate. One ofthe reasons that advisors' net returnsare lower than you might think isthat it is pretty hard to start everyyear 1.5% in the hole and consistentlyfinish the year ahead of the market.For more insights on the ins and outsof building your personal financedream team, be sure to read thismonth's feature.

That's it, enjoy the issue!