22. When to pay for professional help.

22. When to pay for professional help.

This can be a tricky decision. You may always feel that you need professional help. If you understood most of "Anyone's financial plan" you can manage your own portfolio. Where that breaks down for me is during retirement. Later in life I might not have the mental capacity, logic skills, or brain power to manage my portfolio. I will probably enlist a Certified Financial Planner (They must be certified!) to maintain my Bond/CD ladders and implement my retirement plan. I'll handle it for 5-10 years and then hand it over to the CFP Probably around age 70. There will be a lot of vetting and I will be very involved until I physically can not attend meetings.

Since I will probably be paying 1% of my portfolio for this service, the later in life I start using a CFP the cheaper it will be. I want that 1% to compound and grow for as long as possible. Don't wait too long though. You may lose the capacity to communicate your plan or develop a relationship with your CFP.

There are different types of CFPs.

• Fee only CFP - paid by the hour. Good for a check up but may not fit the bill for long term management.
• CFP on retainer - Good for ongoing help. 
• CFP that takes a regular percentage of your portfolio. Sometimes these folks have a conflict of interest. The more money they make you (and expose you to risk) the more he or she makes. 

Watch out for the CFPs that push products. They probably get a financial incentive to sell certain products. Those products are rarely good for the investor. Never use an insurance agent or anyone pushing "Whole life" plans or Annuities. Insurance agents are not regulated and do not have to disclose their fees. Which can be as high as 6%. Be sure to run your potential CFP though  the following sites.

http://www.napfa.org/
http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/
http://www.cfp.net/
http://www.nasaa.org/
http://www.naic.org/
http://www.sec.gov/

The WSJ had a great article on picking a CFP.
http://guides.wsj.com/personal-finance/managing-your-money/how-to-choose-a-financial-planner/

That's it for my "Anyone's financial plan" series. I hope you found the information useful and easily digested. Refer back to the series as needed and refer your friends and relatives to the blog. Insist they start from the beginning. From here on my blog will be more topical and probably have shorter posts more often. I have been stock piling ideas for posts but have had to hold off until the foundation of financial planning was done. I felt that until we had that foundation in place, my posts would have no context.

Source
http://www.getrichslowly.org/blog/2007/04/24/when-and-how-do-you-hire-a-financial-planner/