Money Minded Gifts: Financial Planners

Are you trying to give the budget conscious friend in your life something a little more exciting than cash? One option may be arranging a session for them with a financial planner. A financial planner can help your friend create a plan to save for retirement, start a budget, or offer solutions for their current financial issues. There are two kinds of financial planners: Fee Only and Commission Based. Fee only financial planners charge a flat fee or an hourly fee for financial advice. They do not receive commissions from mutual funds or other financial products that they recommend. Commission based planners receive a commission on the investments they sell, so they may be biased towards investments that will offer them a commission. A Fee Only financial planner is a good option if you're purchasing a session for a friend, since you're able to buy one session at a time and they're less likely to be biased. But make sure you ask how they're paid: One survey found that some planners that called themselves “fee-only” were receiving commissions on investments they sold.


Because a session with a financial planner can be pricey, Candice Choi at the AP recommends "pooling resources with friend or family" and asking if the planner offers gift certificates. You may also want to find free financial planning clinics that you could recommend to a friend. Add your recommendation to a holiday card and maybe a financial planning book, and you have a financially savvy, money-minded gift for your friends and family. To find free financial planning clinics, check the Certified Financial Planner Board website. The CFP's clinics only use certified financial planners and the clinics are completely free of charge.

Financial Planners vs. Psychics

Looking for a new career? Facing pay cuts or, worse, pink slips? Wondering where the money is these days? Well it may be time to polish that crystal ball and peer into a new profession. As a vast number of industries experience the sharp blow of our weakened economy, one industry appears to be thriving: the divination arts. That's right: in a time of dwindling business, psychics are enjoying a lucrative wave of popularity.

While previous visits to the psychic may have involved questions about a spouse's fidelity or on the future of your love life, psychics are noticing an increase in economy-related shop talk, along with a significant increase in business. According to Ryan Singel at WIRED magazine, "internet psychics across the board saw a spike in traffic in the days following the initial market crash." Psychics are now fielding questions that may have previously been directed at a financial planner or job counselor: What should I do with my money? How do I avoid getting laid off? Ruth la Ferla at the New York Times says "These days, [psychics] are besieged with questions about whether a pink slip is in the cards, whether a condo will sell, or whether a company will continue to prosper."

If you're interested in receiving assistance on money matters, but don't want your advice to come from a pack of tarot cards, consider hiring a financial planner. Here are the top 3 questions to ask a financial planner, from the Certified Financial Planner Board of Standards:

1. What Experience Do You Have?
Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has experience counseling individuals on their financial needs.

2. What are Your Qualifications?
The term "financial planner" is used by many financial professionals. Ask the planner what qualifies her to offer financial planning advice and whether she is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFPR practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation or certification, check on her background with CFP Board or other relevant professional organizations.

3. What Services Do You Offer?
The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.

Check out the rest of the CFP's "10 Questions to Ask When Choosing a Financial Planner" list here.

"In Troubling Economic Times, Consumers Flock to Online Psychics" [WIRED]
"Love, Jobs and 401(k)s" [The New York Times]

Generation Debt: Financial Planning for the X and Y Set

They call them generations X and Y.

Their shared history has been told and retold through various VH1 specials. They're different, of course: different time periods, different unfortunate childhood fashions, different classic sitcoms. But even though these two generations differ dramatically in age, they have a few similarities. They witnessed and embraced the rise of technology. They said yes to cynicism (they made "Reality Bites" and Daria popular) and no to clear Pepsi. And in the process of shifting from adolescence to adulthood, they accumulated a lot of debt. So much debt that when you combine the two, X and Y may as well be renamed: Generation Debt.

According to a recent article from Investment News magazine, "three quarters (of Americans under 35) owe as much or more than last year." The article refers to a new study by Qvisory which surveyed Americans under 35 on their financial status. The survey found that those under 35 were struggling with a myriad of financial issues including debt, medical costs and an inability to pay beyond the monthly minimum payments. Because of their financial concerns in other areas, only "33% said they have a retirement plan."

Generation Debt is in need of a plan. Greg Salsbury, executive president at Jackson National Life Distributors LLC of Denver, says "(Generation X and Generation Y) will need to save more money than other generations did." Unlike previous generations, Generation Debt most likely will not receive the extensive Social Security coverage their grandparents generation enjoyed. In a different Investment News article, Lisa Shidler says that "67% of (young workers) said that they had less than $20,000 in retirement savings." With present debt mounting and no retirement plan in site, what are Gen-Xers and Gen-Yers supposed to do?

Investment News recommends that young adults seek assistance from a financial planner. If you are a part of Generation Debt, or you’re just looking for some assistance with your finances, WISER has some tips to help you choose a financial planner:

• Read the financial section of the newspaper, look over the ads and call three local investment firms and ask them to send you materials. After reviewing the materials, set-up interviews with financial planners at a few investment firms.
• Interview two or three different financial advisers. Make a list of questions about whatever you are interested in or do not understand in preparation for your meetings. Ask as many questions as you need.
• Beware of someone who promises too much. Find an advisor who will help you develop realistic measurements of success, and who will explain what he or she is recommending and why.
• Look for a financial planner who talks with you about risks, and what you are or are not comfortable with. You want to find someone who listens to you and understands you.
• Ask the advisor how the services he or she provides are paid for and how fees are calculated.
• Find an advisor who will design a realistic and well-diversified investment program for you

References: "Americans Under 35 Piling Up Debts" from InvestmentNews.com, "Younger Americans Not Saving Enough for Retirement" from InvestmentNews.com.