Q: My wife and I are in our early 40s, have two young kids and make about $130,000 from a single income. We have about $300,000 in retirement savings (all employer-based mutual funds), $60,000 in cash savings, we own a home, and other than the house have no debt.

We are searching for a fee-only financial adviser and I have a few questions:

What is a reasonable annual fee? I have seen fees in the range of 0.5 percent to 1.5 percent. Do you get what you pay for generally? Does it matter much if you use an independent adviser or a larger firm? I am frustrated with the choices and don’t know where to start.



A: First of all, congratulations. You’re in good financial shape.

I share your frustration. In theory, meeting with a fee-only financial planner to come up with a comprehensive retirement plan (part of an overall financial plan) is smart.

The difficulty is finding the kind of well-educated, fee-only comprehensive planner who works with people in your circumstances. Middle-income families struggle to find someone with the broad financial expertise they need and who charges a reasonable fee. Almost anyone can claim the title of financial planner, but in many cases the person’s actual expertise is narrow. For instance, the planner may be a stockbroker without any real knowledge about home-equity financing. Another planner may understand insurance, but doesn’t bring much expertise about safe withdrawal rates from retirement savings plans.

Fee-only certified financial planners (CFPs) have the education and the knowledge to deal with all aspects of household finances. The drawback is that CFPs are expensive since their primary market is high-net-worth households, although you might find someone willing to work with you on the assumption that your assets will continue to grow.

I favor a do-it-yourself approach for most people in your circumstances. You could read “The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work, and Living,’’ by Mark Miller. You could couple Miller’s insights with running numbers at a financial planning website, such as www.analyzenow.com or www.esplanner.com.

Remember, the most important part of planning for the long haul is: What do you want to do? Are there changes or goals that you’d like to pursue? You then tailor your finances to your values and goals.

Ask yourself what concrete differences in your household finances you expect to change within a year after consulting with a financial planner. You might want to pay a one-time fee for a comprehensive plan rather than have the adviser also manage your money (which is where the annual fee comes in). To me, anything over a 1 percent fee is a tough hurdle. And lower is better.

The best way to find a planner is through referrals from people you know and trust. You might have access to retirement planning help through your employer-sponsored retirement plan. They’re typically pretty good on the basics.

The National Association of Personal Financial Advisors at www.napfa.org lists fee-only financial advisers in your area. You also could check out the Garrett Planning Network at garrettplanning.com. Garrett planners tend to work with middle-income households.


Chris Farrell is economics editor for “Marketplace Money.” His e-mail is cfarrell@mpr.org.