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Everyday Cheapskate: When Showing Up is the Hardest Part

Mary Hunt on

Not that long ago, I underwent that procedure no one my age likes to talk about. Doing all the necessary prep to get ready for the exam was bad enough. Then, I wanted to cut and run when I saw those words on the office door: certified financial planner.

But we did it. My husband and I spent several hours with planning our estate with a professional, which is a pleasant way to say we talked about getting old and dying.

Actually, it wasn't that bad. In fact, now that it's over, I'm so glad we did the hardest thing of all: We showed up. We took those first difficult steps required to create a realistic plan that will allow us to live the second half of our lives with joy and peace instead of fear and dread. We know specifically what we have to do in the next 10 years, and as our son often quotes that great philosopher G.I. Joe, "Knowing is half the battle."

Here's the question that got the ball rolling: "When would you like to have the option to stop working?" Selecting a date in the future gave "Planner Bill" a frame of reference to begin creating a plan that will allow us to do that. We pulled out the documents he asked us to bring to our appointment. He did not gasp in horror or even chuckle. This was all business for him and exactly the nonemotional approach we needed.

We left with a sizable homework assignment. Our venerable living trust is in need of an overhaul. We have no disability or long-term care insurance. Our investments need reallocation, as we've been using that ever popular hit-and-miss approach of self-directed investing. Unlike before when I couldn't have held a conversation about these things, I'm ready to roll because Planner Bill is a valuable addition to our team.

Through this exercise, I've learned there are basically three types of financial planners; the difference between them being the way each planner is paid.

 

FEE-ONLY

This type of financial planner charges a set fee, either by the hour as an attorney would, or a single flat fee. You will have your initial meeting and then a follow-up appointment in which the planner will hand you your own customized estate plan. Then, the planner walks away, and it's up to you to implement the plan, which can be daunting. The National Association of Personal Financial Advisors is the country's leading professional association of fee-only financial advisors and one source of finding such an advisor or planner in your area. Visit their website for more information.

FEE-BASED

This type of planning is the same as the fee-only arrangement, except for the part about having to implement it yourself. With a fee-based plan, the up-front fee is usually less, and the planner is compensated through commissions earned on financial products the client purchases. This is the arrangement we have with Planner Bill.

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