[Alex Chadwick:] Most of us wish we were better at handling our finances. Some people have the problem of having money to invest but no clear idea of how to go about it. You think maybe a financial expert could help, but how do you find one, who do you turn to? Here to help with this is Michelle Singletary, a regular DAY TO DAY contributor. Michelle, what is the first thing you should do when you are trying to find a financial advisor?
[Michelle Singletary:] This is a case where you really ought to consult friends and family members. If you go to church ask around there. In my case, I actually found my planner because I went to an investment seminar and there was a financial planner there. And I interviewed her loved her to death and she has been my planner for the last several years. I have since recommended her to several people.
[Alex Chadwick:] Wait, you are a financial you're our financial guru you tell me you use a financial planner?
[Michelle Singletary:] I do, because my husband and I got to the point where you know we were doing all the right things you are supposed to, putting money in retirement funds, saving for our kids college. But we wanted to have someone sort of second guess us, in a way, to make sure we were on the right track.
[Alex Chadwick:] Okay, well even you need help with this. Then when you began to talk to this financial advisor, what kind of questions did you ask in order to figure out okay this is the right person for me?
[Michelle Singletary:] You want to ask them about their experience, how long have they been a financial planner? If they have a certain credential, you want to double check that they actually have that credential. Believe it or not people will tell you they are a certified financial planner and they don't have the credential to back it up. So you want to ask them what kind of credentials do you have, what are your qualifications, what services do you offer?
[Alex Chadwick:] What would be a normal fee do you think?
[Michelle Singletary:] It depends on how the planner is paid. There are planners who get paid by a combination of fee and commission, so they may get a commission on some of the products they sale and then you pay them a fee. Or, you can get a planner that is just commission-based, and they earn their money based on the products that you buy. And if you just want someone to look over a plan that you already have, then you want to do a fee only. Depending on what area you live, you can expect to pay a $100 to $200 an hour.
[Alex Chadwick:] Michelle, tell me one piece of advice that you perhaps could recall that you got from your financial planner, and when you heard this piece of advise you said, okay, it's worth whatever I'm paying for this because this person has made me see something new, or made me realize something, or maybe even made me some more money.
[Michelle Singletary:] You know, that is such a great question. For example, I wasn't taking enough risk in 401K plan. I am just risk averse. And I had a lot of money put in bonds, where I should have been more diversified. And she looked at my plan and she said, you know you need to put some more in small Caps that's like companies that are small. And so what she did what she looked at my 401K allocations and rearranged it so that I was more balanced. And I'm telling you since she has done that my 401K plan has earned a lot more because I was being too conservative. Now here is the thing, whatever a planner tells you, you need to do a little research to make sure it is still good for you. Because as good as any planner is, there are not perfect. And so anytime she tells me something, I go back and I do a little research to make sure it is appropriate for me.
[Alex Chadwick:] Michelle Singletary DAY TO DAY'S Personal Finance Expert, her latest book is Your Money and Your Man: How You and Prince Charming Can Spend Well and Live Rich. Michelle, thank you.
[Michelle Singletary:] You're welcome.
[Alex Chadwick:] And dear listeners, if you have a money question Michelle would like to hear it. Go to our Web site, npr.org. Click on the contact us link that is found at the top of every page and please be sure to include Michelle in your subject line. And there is more to come on DAY TO DAY from NPR News.