First steps to planning, managing and maintaining your finances

Published 12:00 am Tuesday, January 29, 2013

Dear Carrie: We are getting older and need help managing our investments. What do you suggest for people in our circumstances?
— A Reader

Dear Reader: You’re wise to be asking this now, because as much as we don’t like to think about it, the older we get the more likely it is that we’ll need help managing our finances. In fact, a study out of Texas Tech University last year measured how our knowledge of the basic concepts needed to make good financial choices changes as we age. It found that financial literacy scores declined by about 2 percent a year after age 60. Considering that the most recent Survey of Consumer Finances estimates that more than 50 percent of the national wealth is controlled by people over 60 – now about 12 percent of the population — there are probably a lot of folks who could use some financial management assistance.
The first and hardest step is to acknowledge that you need help. You’ve done that already, so you’re on the right path. Now you just need to look at your options. Fortunately, there are a number of ways to get financial advice.
You could start by talking to an adult child or other relative who has investment knowledge and would be willing to look at your financial picture with you. Sometimes it just takes another perspective to help you feel more in control. Someone who’s close to you and whom you trust could help you review your current investments to see whether they’re appropriate for your life stage. Or perhaps you just need someone to periodically look over account statements with you and help you stay on top of everything.
If your financial situation is complicated or your assets are substantial, it’s probably better to have a professional financial adviser. Advisers offer a wide range of services, from one-time consultations to periodic check-ins to complete hands-on management. The type of service that’s right for you depends on the amount of your assets, your knowledge of investing and your feelings about financial control.
If you just want someone to review your portfolio with you and make suggestions, an adviser who will meet with you quarterly or every six months could be adequate. However, if you want someone to actively manage your investments, you should look for an adviser who will create a plan for you and then carry it out.
Another option is a Certified Financial Planner professional who can advise you on aspects of your financial life beyond your portfolio, including things like tax planning, estate planning or insurance.
Finding the right adviser for you takes time and effort. You want someone you’re comfortable with both professionally and personally, someone who will listen to your questions and provide clear, understandable answers, someone who truly has your interests at heart.
Most advisers offer an initial complimentary consultation so you can talk about what you want and what approach the adviser would take. You also want to get a clear idea about how the adviser charges. Will you be charged a flat fee or a fee based on the size of your portfolio? Does the adviser receive any commission, reimbursement or incentive for selling specific types of investments?
When you meet with an adviser, don’t be afraid to ask questions. Do they follow a particular investing style? How much money do they manage? Also ask about education and qualifications, recognizing that there is a difference between a broker who primarily sells investment products and a professional whose primary business is giving advice. If you’re talking to an independent adviser, ask to see Form ADV, which he or she is required to file with the SEC or their state. This gives broad information about an adviser and proves they’re registered.
Then get references — and be sure to check them. If any of this makes you uncomfortable, perhaps a friend or family member would be willing to help you.
If you already have a relationship with a brokerage firm, you could start your search for an adviser there. Another good resource is the Financial Planning Association website, There you can search for a financial planner by city, state, zip code or specialty and read a bit about what each offers. I’d pick three or four to start and make appointments to interview each.
Whatever type of help you choose, it may initially feel strange to have someone else being involved with your finances. That’s why it’s so important to find a down-to-earth, caring individual whom you trust — one you’ll be happy working with now and for years to come. Best of luck.
Carrie Schwab-Pomerantz, Certified Financial Planner, is president of Charles Schwab Foundation and author of “It Pays to Talk.” You can e-mail Carrie at This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice.