rubyring24k - You may have already called some planners and found your answer. But I just saw this (life has been busy, LOL) so here's what little I know. I worked for many years in the financial services industry in op/admin and eventually ended up in my last job working for a very fine independent Certified Financial Planner (CFP).
Don't be intimidated! But also, don't expect to get much out of that "free first hour", either. It takes time and effort to find someone good. You need to feel you can work with the person, but ALSO need to check references thoroughly (a real pain in the butt, I know!).
Please don't get hung up on the cost. It's far better to pay a good ethical CFP $25 more per hour than to save a few bucks by going with someone who does a crappy job.
You need to have done some work on your own before talking to any planner. Bring all your financial papers (please get them in order first - handing in some scribbled notes written on the back of an envelope is not helpful). That includes all your insurance policies (every one of them, every type). Write down - you may have to work on this one - what you want as your short- (6 mo. out), medium- (1-3 yrs out) and long-term goals (5+ yrs out).
Retirement is not a goal--it is a circumstance. You may live 30-40 yrs after retiring; what do you intend to do?
More importantly, what will you do if you CANNOT achieve those goals?
Have you considered the practical options? Have you given any thought to being disabled or injured or ill, temporarily or permanently? It isn't good enough to hope nothing goes wrong. Risk management is assessing your personal risks and mitigating them wherever possible. That's why you have auto and homeowner insurance. It's impossible to eliminate risk, but you can reduce the likelihood that an emergency will devastate your finances. A comprehensive financial plan takes into account many factors, present and future.
Bring copies of your will/trust, durable healthcare PoA, financial PoA. Don't have those? Unless your heirs are telepathic, how's anyone going to know what you want done with your estate? A planner may not need these to make a plan, but it tells him/her something when you don't have them done. Good intentions don't mean much to the law and IRS.
A good CFP, independent or not, AUM or fee-only, is not a "one and done" service. You want to find someone who will be that neutral sounding board, who ideally will be a teacher and advisor; who as a fiduciary is legally obligated to have your best interests at heart. This person will work with you OVER THE YEARS to define your goals, refine your budget assumptions, help keep your portfolio allocation balanced, and (tactfully) tell you to stop, relax, and think, when you're too panicked or too enthusiastic about a financial development.
The problem, of course, is that it costs about the same to do a financial plan for someone with $400K assets as it does for someone with a $4M portfolio. When your business is based on % fees on that portfolio...well, clearly it's a lot harder to make a living doing the small stuff, when one big client is worth ten of the 'little ones'.
Now "The Working Rules":
You want to interview at least 2, preferably 3 planners.
You want to check references.
You need to be clear on
what you want from the planner.
Do you want s/he to assess if your market allocations are suitable for your age and goals? Then you need to have your goals clearly defined, and remember to ask if they are reasonable (you'd be surprised how many people have very unrealistic expectations!).
Do you need a financial plan? Expect a computer-generated one; it may or may not be useful. Better s/w pkgs cost $$$$ because they will run thousands of Monte Carlo scenarios on the data inputted. A program that runs less than 7,000 MC scenarios is almost worthless; you can duplicate it with free Internet websites. The best is an individualized personal analysis but very few people do this any longer as it's really labor-intensive. It costs roughly around $6-10,000.
Do you need help defining your goals? Maybe you're not sure if you'll have enough money to travel where you want, so should you take SocSec early or try to push it off until later? Maybe your kid might want to go to graduate school, or need help buying a home - can you swing squeezing out some extra cash or will this put a real crimp in the idea of spending three months in Fiji, swigging rum coolers on the beach? Are your parents getting older - are you going to be called in to help manage their affairs or downsize their home?
You may already know these avenues to finding a fee-only planner; I'm adding them for the benefit of others who may read this thread:
1) Almost all the big brokerages offer free financial plnng services to customers with good-sized portfolios. At some that can be as little as $250K. The caveat? You'll likely be talking to a newbie CFP, who doesn't have the experience and personal contacts/clients to go out on his/her own yet.
If you can find one of the free CFPs at Vanguard, Fidelity, etc., that has been doing it for at least 5 yrs, grab hold fast and give them a try, subject to "The Work Rules" I listed, below. There are good CFPs and mediocre ones, just like there are good/bad lawyers and auto mechanics and doctors. Finding somebody, good takes work. Sadly, only time will tell if you've got a good CFP. Do ask for references; I don't know if brokerage CFPs are allowed to give names out since these aren't independents, but it's worth asking.
2) There are two national associations who offer fee-only services. Those are NAPFA (National Association of Personal Financial Advisors) and the Garrett Planning Network, headed by Sheryl Garrett. EVEN THEN, you need to do your due diligence! You should note that Garrett runs a little differently; check out the Bogleheads' discussion (including the comments) at:
https://www.bogleheads.org/forum/viewtopic.php?t=62197
If you want a financial plan, ask to see at least two redacted samples from each CFP you interview. This will take time as even redacted, permission must be obtained from the client it was written for, so be patient. 2-3 weeks is normal.
Call each client reference. Their interactions with the CFP should be in line with what services you desire - this is the customization you are paying for. Do NOT neglect this step. Most people are like, "Oh, I really liked this guy and he seems to know what he's doing, so I don't need to interview anybody else!"
Or, "Oh, my CPA referred him to me and I'm sure he must be good, so I don't need to check references."
Gggrrrrrh! Both the NAPFA and Garrett websites have (similar) lists of questions you should be asking during an interview. Print them out, and use them!
Bernie Maddox should never have happened, if people understood the financial svcs industry better. You never, ever make a check out to an advisor, unless it is a check to pay for a specific fee-only service. Assets are always held by a financial institution or brokerage, so that's who an account or portfolio check is made out to, when depositing funds.
