When You Can’t Afford A Financial Planner

fees.jpgA reader recently left this comment:

“I’ve read with interest your comments about “fee based” financial advisors. However, you have yet to address the issue that “fee based” relationships work only if your “nest egg” is $1,000,000 +. Those of us “smaller hitters” are overlooked by financial advisors who are compelled to work exclusively with accounts that will generate sufficient return on their time invested. I guess that is just a harsh reality of life.”

To correct one assumption this reader made, you don’t need a million dollars before a fee-only financial planner will take you on as a client. Many planners, including my office, serve clients whose net worth is considerably less than that.

This comment, however, makes an important point and sums up one of the dilemmas of my profession. Many hammer-with-piggy-bank.jpgof the people who most need financial planning services and investment advice can’t afford to pay for either. It’s a classic Catch-22: In order to be in a position to hire someone to advise you on how to build wealth, you first have to build some wealth.

If you can’t afford a financial planner, what are some ways you can learn some of the basics of planning for yourself?

While most planners charge a minimum annual retainer, it is possible to find a planner who will consult with you for an hourly rate. If you can’t find someone locally, Internet technology means that you and the planner don’t have to live in the same area. Two places to find such services online are and

A second option is to teach yourself the basics of money management and investing through books, classes, and websites. The problem here is choosing wisely, because there is so much material available. The following guidelines may be helpful:

• Beware of any source that promises you overnight wealth or makes claims that sound too good to be true.

• Be cautious about sources promoting only one idea, such as buying real estate. Even if the author’s advice is sound for that one type of investment, it isn’t wise to plan your financial future around only one investment strategy. Look instead for sources like my own co-authored book Conscious Finance that teach you the fundamentals of investing and money management.

• Be aware that authors or seminar instructors will usually have a secondary purpose of publicizing their products or services (as, you may have noticed, I just did in the previous point). There’s nothing wrong with this; just consider their possible biases as you evaluate their information.

• The websites of online brokerage firms include a lot of basic investment information, and you can also find many articles from financial journalists online or in business magazines.

As you learn about investing, focus on some basics:

• Buy mutual funds, not individual stocks.

• Learn what “diversification” means, and practice it. (To learn more, go to and type “diversification” into the search window.)

• Max out IRAs, as well as your 401(k) if your employer offers one.

• If you invest with a broker who earns commissions, comparison shop and insist on full disclosure of fees and costs.

• Be the tortoise, not the hare: invest for the long term instead of trying to build wealth overnight.

• Have a spending plan, and follow it.

financial-future.jpg• Don’t overlook estate planning. At the absolute minimum, make a will and provide for your family’s future with term life insurance.

Making sound financial decisions on your own is possible. What it takes is your willingness to invest time and energy in your own financial future.

Share Button
Print Friendly, PDF & Email

2 Responses to When You Can’t Afford A Financial Planner

  1. Bobbie Munroe March 24, 2009 at 7:49 am #

    Rick, this is good advice all around. But I also suggest that middle income earners also let their employers know that financial education would be a much appreciated benefit (and per offering such benefits would actually ADD money to the employer’s bottom line rather than costing money). I believe that this type of benefit will be much more common in the future. This would please me as I see it as a major way for “everyman” to get good advice.

  2. Susan Hotalling March 24, 2009 at 7:50 am #

    You might have noticed that buying a diverse selection of high quality mutual funds didn’t provide much protection, and you might have noticed that the mutual fund industry has proliferated to thousands of funds — that average guy who has to hustle for a living has no chance of the time for self-teaching on this huge tangle. Not enough hours in the day, literally. Then there are the next steps to hopefully improve returns, the ones the little guy really needs to do such as simple puts and covered calls. Over on the Motley Fool site, you may or may not have noticed that the Gardners have launched a new project this year to help investors to the next step — with a big subscription charge in tow. Folks need to be able to hire the expertise of a professional that spends all their time and passions on investing, but when the good professionals are out of reach, they are out of reach.