Good financial advice is readily available

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Elliot Raphaelson

Regardless of how well educated you are, it’s unlikely that you can plan your family’s financial future without some professional advice.

Much of what you need to do to manage, protect and pass on your wealth — things like investing, buying insurance and drawing up a will — can be done cheaply and in a straightforward manner.

But you’ll be much better off if you seek guidance where your competency is limited, especially when your needs are complex.

Do-it-yourself investing

Consider the example of investing. If you have the time, and are willing to put in the effort, you can be your own financial planner. As a basic guide, I recommend Making the Most of Your Money Nowby Jane Bryant Quinn (Simon and Shuster, 2009).

To stay up-to-date, I recommend reading the Wall Street Journal, Money Magazine, Kiplinger’s Personal Finance magazine and Barron’s newspaper.

There are many excellent blogs and websites, too, including those run by investment firms, such as Pimco.com and www.Vanguard.com. Vanguard has videos and articles that discuss the issues surrounding all the major investment options.

Finding a professional

Of course, if you have no interest in being your own financial planner, you can hire one. However, it is important to check references and to use one who has the proper credentials, because anyone can claim to be a “financial planner.”

A certified financial planner (CFP) has passed a comprehensive examination and must stay up-to-date in several subject areas. Some CFPs sell financial products on commission, so their efforts may be somewhat biased.

Others are fee-only planners. They sell no products and generally charge you for an initial plan, and bill hourly after that. Such planners are more likely to recommend products such as no-load funds and low-load insurance that will be cost-effective for you.

If you have a significant portfolio, you will find that many of the major no-load funds will provide you with planners at low (or no) cost.

For life insurance

As with investments, there are ways to reduce commissions when buying certain kinds of life insurance. So-called “low-load” policies are available for universal, variable universal, and second-to-die insurance.

Low-load policies provide you with larger cash values in the early years of the policy. Accordingly, investment values and death benefits accrue much faster, and these policies have low (or no) surrender charges.

Life insurance is a complex subject, and you really need to educate yourself before you shop for a policy. Here again I recommend Jane Bryant Quinn’s book.

You will also find a great deal of information on the Internet, including at the websites of the Insurance Information Institute (www.iii.org/individuals/lifeinsurance) and the LIFE Foundation (www.lifehappens.org/life-insurance). The latter site has a great calculator for helping you determine the ideal amount of coverage.

James Hunt, an actuary, former insurance commissioner and noted consumer advocate, offers a great service at a nominal fee evaluating prospective policies for consumers (visit his site at evaluatelifeinsurance.org).

After you decide what type of policy you want, comparison shop via phone or the Internet. Using the same parameters, you can determine which policy is best by comparing the cash value after specific time frames.

Some highly rated companies offering low-load policies directly are Ameritas Advisers (ameritasdirect.com), TIAA-CREF (tiaa-cref.org) and (if you or certain family members have a military background) USAA Life Insurance Co. (usaa.com).

If your life insurance needs are complex, consider using a chartered life underwriter, who is more qualified than the average agent.

For health or LTC insurance

If you require health, disability or long-term care insurance, you’re best off contacting a health insurance agent or your local Senior Health Insurance Program (SHIP).

SHIP offices are part of a nationwide network supported by the Older Americans Act, and offer one-on-one advice from well-educated volunteers.

For an appointment with your local SHIP office, call (410) 313-7392.

Estate planning advice

As for wills, if your estate plans are straightforward, you can use any competent attorney.

A straightforward will is one in which you leave all of your assets to your spouse, and vice versa. If your spouse predeceases you, all assets when you die go to your children. You also want to make sure your spouse’s name is specified on all beneficiary forms for your retirement plans.

If your estate plans are more complex, use an attorney who specializes in estate planning. Some examples: You are being married for the second time, and both partners have children from previous marriages; you wish to set up a trust for a family member who is handicapped; you are leaving assets to minors, and you want to select a trustee to allocate funds to them; or you believe your spouse needs assistance handling money, and you prefer a trustee to invest the proceeds from your estate and allocate the funds to your beneficiary.

Before hiring a professional in any of these fields, remember: Always check references. Don’t hesitate to ask friends for recommendations.

You should have a face-to-face meeting with any professional you consider using, and he or she should be willing to meet with you initially without charging a fee.

Elliot Raphaelson welcomes your questions and comments at elliotraph@gmail.com.
© 2011 Elliot Raphaelson. Distributed by Tribune Media Services, Inc.