Fee or No Fee?
After you get the names of some planners you should interview them, to see whose style best suits you. You should also be aware that planners make their money in one of two ways—by charging you a fee for advice or by getting commissions selling products, such as life insurance or mutual funds. You need to decide which compensation plan makes you more comfortable.
When discussing the option of engaging a commission-based planner, Glovsky says, "The question there is are you getting objective advice? If you are getting objective advice, and you need the products anyway, it can be a cost-effective way of getting advice."
Taxmama's Rosenberg says, "All you have to do is make sure the person has the level of integrity that you want. The CFP Code of Ethics says that you have to put the clients' interest first, and that you have to disclose your compensation." She adds, "If you're working with someone who doesn't charge fees, ask them what they are earning on the investments they sell you. If there are other investment options that will pay them less, but earn you more—you'd definitely want to know about them."
Always use a licensed professional—the designation of certified financial planner (CFP) or registered investment advisor are the most common—because under their licensure, continuing education and professional ethics are expected, and their licenses can be revoked if certain criteria are not met.
While planning for retirement, many parents find that investments and life insurance loom large over their lives. Additionally, college planning is what frequently drives them to seek professional advice.
Catherine L. Tucker of American Express Financial Advisors in Middletown, Ohio, counsels parents to start saving for a child's education as soon as they bring the baby home from the hospital. "Think of it as an insurance policy or an investment in your child's future. You can never make up for the compound interest you lose if you wait to start saving for your child's education," she says.