Who do we speak with to discuss financial life goals and limitations?
August 1, 2020 11:03 AM   Subscribe

My wife and I are about to become empty nesters. We are on the cusp of making some big decisions that involve selling our house, taxes, jobs, health insurance and general budgeting moving forward.

We would like to sit down with someone who can assess our current financial situation and advise us as to our options. (Do we sell our current house or rent it? What about taxes, capital gains, etc.)
Does this person exist? Are they a realtor, CFP, CPA, a wise friend? Have you had these discussions professionally and found them fruitful? Who do we reach out to??
We are in California, USA.
posted by Mr.Me to Work & Money (7 answers total) 5 users marked this as a favorite
You're likely looking for a financial advisor - and probably a more traditional one. The important detail to look for is a fee-based financial advisor. If you're not paying them directly, then they are paid by the funds/stocks/shams that they are directing you towards, which is ideal for you.
posted by saeculorum at 11:27 AM on August 1, 2020 [4 favorites]

I will note that going to a financial advisor and saying, "what should we do" is not going to be as fruitful if you have a particular goal in mind. Are you looking to travel more (potentially dispensing with any permanent home), maximize inheritance to your children, increase your philanthropy, maximize chances of your retirement funds lasting your lifetime, ensure that you can cover elderly care expenses, etc? These are not mutually exclusive goals, but they will help you direct your discussion with your financial advisor. Simply being "presented with your options" is likely going to be less useful for you because the advisor has no way of weighing them against your goals.
posted by saeculorum at 11:29 AM on August 1, 2020 [2 favorites]

When I was going through a big life change - new marriage, new jobs, big jump in income, buying property, all in the span of a year - my husband and I used a Certified Financial Planner I found through NAPFA. (I used their find an advisor tool, made a shortlist of people who sounded like a good fit, then had brief phone calls to figure out who I was most comfy with.) We paid about $1500 for a comprehensive financial plan that took three meetings (plus emails) over six weeks to produce. (This was over ten years ago, so prices have probably increased a bit).

We used that plan to make most of our major financial decisions in the last decade (with occasional consultations with an accountant for specific tax questions). We didn't become ongoing clients because our plan wasn't that complicated, but it is highly likely we will return to that CFP as we get closer to retirement to do the process again - it was that useful.

(Oh, to saeculorum's point, we didn't go in with a goal in mind other than "help me understand our financial situation," but our advisor did pretty quickly ask us to figure out some big-picture goals like when we wanted to retire and did we want to save for any big-ticket items like higher education.)
posted by minervous at 12:14 PM on August 1, 2020 [2 favorites]

I generally agree with what saeculorum’s written above, but isn’t a fee-only CFP going to be preferable to a fee-based one? Comparison of the terms here.
posted by cheapskatebay at 12:45 PM on August 1, 2020 [6 favorites]

The role of a wise friend here might be if they are working with a financial advisor that they really like, it can be better than picking one out of the phone book. Also depending on who you bank with, your bank may offer this service. They may try to steer you towards some of the bank's investment products ("Hey put your money in our CDs!") but you can always say no to those parts.

I agree, going in with goals is going to lead to some better outcomes, but also it's okay if a goal is just "How do we make sense of htis?".

I have a financial planner who was my father's financial planner before he died and I have warmed up to working with a financial planner. The guy I work with basically oversees investments with retirement goals in mind but can't give me a lot of tax advice. A lot of what he does is kind of runs scenarios (like when we were trying to decide "Pay off the mortgage or keep that money invested?") and we touch base a few times a year just to make sure things are still on track.
posted by jessamyn at 3:39 PM on August 1, 2020

isn’t a fee-only CFP going to be preferable to a fee-based one?

Yes - fee-only is better than fee-based. Thank you for pointing that out. I was primarily intending to get people to avoid free/no-cost advisors that are offered by some brokerages.

(Also, as an aside, I feel without any evidence that hourly payment is better than payment as a percentage of assets. If your net worth is low, you don't want less service as a result. If your net worth is high, and you are not looking into exotic investments, the effort from the advisor isn't drastically different than with a low net worth).
posted by saeculorum at 3:50 PM on August 1, 2020 [2 favorites]

I almost did exactly what you’re looking for, but count myself lucky I found the boards at Bogleheads more easily than I found a fee-only financial planner. Ask them your questions, anonymized as much as makes you comfortable, before asking anyone else. They’re mostly wealthy and risk-averse but they give their expertise generously.

If you’re still unsatisfied, then yes go fee-only and fiduciary and hourly, as others here indicate.
posted by mahorn at 6:43 PM on August 1, 2020 [3 favorites]

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