How to use a financial adviser

David Zizzo, Staff Writer

Published: April 27, 2008

The life of a financial adviser — it isn’t just numbers and money.

“It’s amazing the things we get into,” said Jeff Ashford, a certified financial planner in Oklahoma City.

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Matchmaking, for instance. Ashford had been working with an unmarried couple, each of whom had their own children, assets and finances, when he suggested that things would be much simpler for them if their separate lives became one, you know, legally.

“We said, ‘Why don’t you get married?’ They did.”

People of all kinds and in all financial situations turn to financial advisors, from single people beginning their careers to business owners to retirees, advisers say. Regardless of your situation, advisers say, it’s a good idea to visit an adviser for a personal economic checkup.

“Think of it as a financial X-ray,” said Gary Stanislawski, former president of the Financial Planning Association in Tulsa.

Planners will look at all aspects of your economic wellbeing, from credit card and mortgage debt, to income, investments and assets. Then, based on your situation, including tolerance for risk, they can tell you when or if you’ll be able to retire, or what you’ll have to do to get there. They will recommend how you can tweak your current lifestyle to achieve the one you want in the future.

With the impact that finances can have, you should choose a financial planner carefully. Looking for someone who is registered with the state as an investment adviser is “an excellent starting point,” Ashford said. “A registered investment advisor has a fiduciary duty to take care of their client first rather than themselves first.”

Since there are varying levels of expertise and competency, pay close attention to an adviser’s credentials and experience. One credential to look for, many say, is “certified financial planner.”

“It’s the gold standard,” said Peggy Doviak, a certified financial planner in Norman.

The CFP rating, which requires passing a two-day exam, is “not fool proof,” she said. “(But) it’s an indication that at least one time in your life for two days you could pass an exam.”

Most planners charge one of three ways:

Hourly. Doviak, who charges $100 an hour, said rates can be as high as $200 an hour. This is usually for people with limited incomes and assets who just want a brief review a few times a year.

Percentage fee. The most common method, this annual fee usually ranges from ½ percent to 1.5 percent of assets actively managed by an adviser.

Retainer. A fixed annual fee, usually for clients with complex portfolios and finances.

Some fees are offset by the complex relationship between advisers and fund companies, advisers say. For instance, advisers say they can offer fee-based clients “institutional” investments — which have lower expenses — rather than “commission-based” funds — which raise the costs to shareholders.

The best way to decide is do your homework and ask questions.

Despite what some in the financial industry might imply, customers of the industry end up paying one way or another for financial service or advice they receive. It’s just a matter of which way you choose to go.

“No one does this for free,” Stanislawski said.

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