Wes Moss: Where to get financial advice — from free to expensive

Wes_Moss-for-Web-smaller-fiCertified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest blog will appear here every Monday.

Where do you get advice?

What are your options to get financial advice?  Who do you turn to?  What can you expect?

The stock market is a difficult place to navigate — full of speed bumps, roadblocks, steep assents…and sharp declines.  However, in the long run, patient, disciplined investors have been rewarded. Over the past five decades $1, has grown into $23.31 adjusted for inflation.

Simple enough, right?  Invest consistently, stay patient, and you will end up with healthy gains. But where exactly do you invest to maximize your earnings?  Large cap or small cap?  What do those terms mean?  Domestic or international?  Individual bonds or bond funds?  Emerging or developed?  How much in each?

There are countless sources of investment advice, ranging in cost from free to very expensive, and from extremely valuable to worse than useless.   So, where should you go for advice on one of the most important areas of life?

First, you need to figure out your financial goals.  Do you want to retire in 15 years? Save to buy a house?  Send the kids to college?  All of the above?    Knowing where you want to go is crucial to picking a navigator.

This list of potential advisors runs from least expensive ($) to most expensive ($$$$).  In theory the level of help and depth of advice should increase with each option.

1. MOM and DAD –  My favorite.  The most important factor for selecting a financial advisor is trust.  You need to know that the person offering the advice has YOUR BEST INTEREST at heart.  If your parents have demonstrated an ability to handle their money wisely, why not seek their counsel on your finances?  $

2. BOOKS – There are thousands of investment advice books out there.  How do you decide which ones are worthwhile?  Read reviews, ask your friends what they’ve read, skim through a few volumes at the library or bookstore.  I recommend  The Automatic Millionaire by David Bach and The Little Book of Common Sense Investing by John Bogle, the father of index fund investing. $

3. Vanguard Direct – The Vanguard Mutual Fund Group (found at www.vanguard.com) is the Granddaddy of Index mutual funds and offers more than 100 investment options to choose from.  They are known for having the “lowest” of low cost funds in the industry.  However, Vanguard offers very little personal advice on “what to buy”, so you’re on your own.  One simple solution: The Vanguard Target Date Retirement Funds.  If, for example, you plan on retiring in 2030, Vanguard’s Target 2030 fund may be a good one-stop shop. $

4. Your 401k Rep –  If your company has a sizable 401k plan, you may have access to one of the plan’s representatives. This person should be at least moderately qualified to help answer what fund or fund combination would be best for your long-term goals. $$

5. Charles Schwab or Fidelity — These are discount brokerage firms. You can go directly to their websites ( www.schwab.com or www.fidelity.com) or drop by a local branch and speak with a financial planning specialist.  $$

6. Fee-Only Financial Planners –  A fee only planner will charge either an hourly fee, or a percentage fee of the assets managed for you.  “Fee-Only” means that the compensation that they receive can ONLY be from you, as opposed to commissions, mutual fund fees, or mark ups on financial products.  You should have plenty of face time with these planners, and they should be able to advise you on financial topics (ie. Insurance and mortgage questions) beyond just your investments.  $$

7. Full Service Brokerage Firms – The BIG name bank/brokerage firm combinations like Bank of America/Merrill Lynch, Morgan Stanley Smith Barney…These outfits have thousands of brokers/financial advisors who are more than happy to help invest your money for you.  The way these advisors are paid can vary greatly.  See my article last week for ways to minimize your investment fees.  $$$$

Wes Moss is a certified financial planner and is the Chief Investment Strategist at Capital Investment Advisors in Atlanta. Moss is also the host of “Money Matters” on AM 750 and now 95.5 FM News Talk WSB on Sundays from 9 a.m.-11 a.m. An author, “Apprentice” alumni, husband and father, Moss is committed to helping Atlanta’s citizens with financial health.

10 comments Add your comment


October 18th, 2010
1:29 pm

Very good information… I use Vanguard which I belive has the lowest fees in the industry. Their investments are good but you are right the Vanguard representatives don’t like to give me much advice.

Beat Kentucky

October 18th, 2010
1:58 pm

I would never call “advice” what you get from a full service broker. Those guys are a rip-off! Stick with 1-6 and you will do much better.


October 18th, 2010
2:25 pm

My 401k person doesn’t seem to have any idea what they are talking about… the problem is that I don’t think I do either. Can you get a financial advisor to do your 401k?


October 18th, 2010
4:00 pm

Wes, can you write a column about the older employee who has been out of work for over 18 months. There is little income, no debt other than our mortgage, already on individual health insurance (thank God we’re healthy). Where are we supposed to be saving from at this point? No jobs in sight (ageism is alive and well in Metro Atlanta). Where can we get income?? We have good liquid savings (for now) and IRA and Roth IRA accounts (but God knows how the market will impact those). But no one talks about our situation – no paycheck, no 401K to contribute to and with what anyway. Already have scaled back considerably – don’t want to sell our house – won’t get what it was once worth (and we have a lot of equity in it) and really can’t live anywhere else for less money. I sleep ok at night, it’s during the day I don’t do so well as I am surrounded by news that scares me to death.

Simon Napper

October 19th, 2010
2:08 pm

There is one more important source of information for those looking at long term investing.

There are now web based applications that will give you returns information on specific plans — especially useful in the retirement plan (401K, 403B, IRA) space.

For example: http://www.myplaniq.com/LTISystem/f401k_view.action?ID=673 is the Microsoft retirement plan.

You can see back tested performance and this will help you make more informed decisions.

This is either free for basic strategies or low cost ($100 a year) for advanced strategies.


October 24th, 2010
12:10 am

I bank with Suntrust, and I know FOR A FACT that their financial advisors DO NOT charge for financial advice. Walk into any branch in the company that has a financial advisor or licensed banker (those are people who open checking accounts but can also do other things like life insurance or annuities) and ask for advice, and they will talk to you and help you for as long as you want AND NEVER CHARGE YOU A THING. In my particular branch, they have a licensed banker AND a Certified Retirement Planning (CRPC) specialist. Either one of them will gladly look at your portfolio and give you solutions and free advice based on your future goals, financial needs, and risk comfort level. My mother went in every now and then for nearly 3 years for advice, and she finally decided to go with them because of how they treated her. She happily paid for the services she got because she knew she could trust them to tell her her what was best for HER based on her wishes and needs, and not just what would line their pockets.

It is my understanding that this is not unusual, but is not common practice among the larger banks, and is nearly unheard of in smaller banks and in credit unions. I have not had a problem with them at all, and I have moved my investments to them because the financial advisor there is such a nice guy who tells me honestly when it’s cheaper or smarter to do something by myself than if I were to go with the bank.

Ted Striker

October 24th, 2010
9:11 am

Nice column, Rana. And good comments from readers, thus far too.

Industry Guru

October 24th, 2010
9:38 am

I work in the industry in the banking platform that you mentioned and you are dead wrong. FAs in banks earn commissions and are compensated based on their sales of annuities and other proprietary products. They traditionally do not have the ability to offer fee only advice and are compensated based on what you buy. So you make think that they’re not charging you anything, but you are certainly paying for their “advice.” And CRPC does not mean “Certified” anything. It’s a designation for Chartered Retirement Planning Counselor. You should consult a financial planner for these questions, not a bank.

Lucky Draw

October 25th, 2010
3:03 pm

Where is this week’s article?


October 25th, 2010
3:46 pm