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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn how to avoid overspending on investing and brokerage fees, and get smart about how to choose a financial advisor.
Today’s First Money Question: Investing Nerd Alana Benson joins Sean Pyles and Liz Weston to demystify brokerage fees and how you can reduce them. They discusses the types of brokerage fees and how they can impact your investments.
Today’s Second Money Question: The Nerds walk through the process of choosing the right financial advisor for your needs. They explain the qualifications and expertise of various financial advisors and what to consider when selecting one, including how to spot red flags. They also discuss the importance of estate planning and power of attorney, and they offer ideas for how you can manage your money independently if you prefer a DIY approach.
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Liz Weston: Sean, what’s your favorite part about working with a financial planner?
Sean Pyles: Well, I always love having another set of eyes to check my work. And my financial advisor has shown me financial opportunities that I didn’t know that I had, which was a nice surprise. What about you, Liz?
Liz Weston: Oh, check my work. I love that. That’s it exactly. I am a certified financial planner, but I still want another CFP looking over my shoulder. For one thing, she has access to more powerful financial planning software than I do. And I also like it that if something happens to me, my husband has somewhere to turn to get his answers.
Sean Pyles: Nice. So, listener, today we’ll tell you a few things that you might want to consider if you are in the market for a financial advisor, but first we’ll answer a listener’s question about brokerage fees. Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.
Liz Weston: And I’m Liz Weston. This month we’re bringing back some of our most popular money tips from the past couple years, and today’s theme is investing.
Sean Pyles: We’ll answer two timeless listener questions. First, how do brokerage fees work? And second, what might you want to consider when you’re choosing a financial advisor?
Liz Weston: And listener, if you’ve used any of our tips or tricks when choosing a financial advisor, then please let us know. We’d love to hear your story. Leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD, or email a voice memo to [email protected]
Sean Pyles: OK, on with the show. This episode’s money question comes from our listener’s voicemail. Here it is.
Danny: Hi, this is Danny in Fort Worth, Texas. I was curious about fees paid on investments like mutual funds and ETFs, things like expense ratio, commissions, et cetera. How do they work and how closely should an average investor be watching the fees on their 401(k), taxable brokerage accounts or other investment vehicles? Thanks so much.
Liz Weston: To help us answer Danny’s question, on this episode of the podcast, we’re joined by investing Nerd Alana Benson. Welcome back to the podcast, Alana.
Sean Pyles: Hey, before I throw a bunch of questions at you, Alana, we have to get one thing out of the way, a brief disclaimer, and that is that we are not investment advisors and will not tell you what to do with your money. All that we are about to discuss is for educational purposes. So OK, with that done, Alana, our listener Danny is primarily concerned with something called brokerage fees. Both trade commissions and expense ratios are forms of brokerage fees, but there are others, too. Can you start off by explaining what brokerage fees are at a high level?
Alana Benson: So brokerage fees can be a lot of things. They’re essentially fees that are charged by your brokerage and other investment companies for everything from making a stock trade, to closing your account. And there are even fees for premium research tools or investing data, but the important thing is that some of these fees you can avoid and some you just can’t.
Liz Weston: Let’s break down the different fees paid on investment accounts.
Alana Benson: OK, so trade commissions: This is about how much it costs every time that you make a trade. If you bought a stock, they might charge you a little bit for that trade. Many brokerages have actually dropped these to zero, but you should always check with your individual broker to see how much a trade will actually cost you because they can really vary. If you’re finding a brokerage that is going to charge you for every single trade that you make, it’s definitely worth shopping around because there are a lot more now that charge $0 per trade.
Sean Pyles: And what about expense ratios?
Alana Benson: Expense ratios, these are what are charged on funds like mutual funds or exchange-traded funds, and this is the cost of what it actually takes to manage the fund. Think of index funds; these are passively managed and they just track an index like the S&P 500. So it doesn’t actually cost that much to manage them and they can vary, but around 0.1% to 0.2% is a pretty good deal. So that would be about $10 or $20 for every $10,000 that you invest. But if you have a mutual fund, that’s actively managed and that means someone is picking and choosing the investments within the fund. So it’s a much more expensive fund to manage than a passively managed fund. And these can run closer to 0.5% or even over 1%, and that means instead of paying $10 or $20 for each $10,000 that you have invested, you’re paying like $100 or more.
Liz Weston: Ooh. That’s a big difference. Now our listener’s also wondering about 401(k) fees. How should they think about those?
Alana Benson: The investments that are available to you in your 401(k) may be more restricted than just buying different investments from a brokerage, but just because you may not be able to do as much about your 401(k) fees doesn’t mean that you should not invest in one, particularly if your employer offers a match.
Liz Weston: If you work for a larger company, you may have access to institutional funds through your 401(k) and those are the cheapest ones you can get. So the idea that all 401(k)s are expensive really isn’t the case. The fees have come down and in some cases you can do better in a 401(k) than you could in your own IRA [individual retirement account] when it comes to expenses.
Sean Pyles: I have a quick follow-up question around index funds and mutual funds. Is there a max fee that you think people should look for and say, “OK, this fee is too high for this account and I’m not going to go for that”?
Alana Benson: I think that really just depends on each individual investor and what’s important to you and what you want to get out of the fund. Personally, when I look for funds, and again, I am not a financial advisor, but I try to find the cheapest management fees that I possibly can. So I’ll look for an index fund that will have a really, really low fee. But if you want something that’s managed by professionals or you’re looking for a particular type of fund, there’s different reasons why people might pay a higher fee. If you’re looking at a mutual fund and it wants you to pay 1%, that’s a pretty significant fee.
Sean Pyles: I could see some people thinking, “OK, the fee is higher, that must mean I’m going to get a greater return or the results will be better for me,” and that may not be the case, right?
Alana Benson: And in fact, a lot of times actively managed investments like those actively managed mutual funds don’t perform as well as passively managed funds because it requires people to sort of predict the market, which people — no matter how much experience they have in the industry or whatever their background is — people are just notoriously bad at predicting the market. And so the likelihood that your actively managed fund will outperform the market is actually really low. So you’re kind of paying more to underperform in a lot of cases.
Sean Pyles: Doesn’t sound like a good deal.
Alana Benson: To each their own, but I’m inclined to agree with you, Sean.
Liz Weston: Well, maybe we should give people an example of how much fees can cut into earnings. There’s so much that you can’t control with investing. You can’t control the market, but the thing you can control is how much you invest and what you pay in terms of expenses. So can you talk about how fees cut into earnings?
Alana Benson: Absolutely. Say you invested that $10,000 into a fund with a 0.1% fee and you match the average market returns; you’d have nearly $210,000 after 40 years. But if you had a 1% fee, you’d have just $150,000. So that’s a pretty significant difference just from a fee that you don’t actually have to be paying.
Sean Pyles: That leads me to my next question, which is how much should folks be worrying about their fees? And it seems like the answer is maybe a lot, a decent amount at least.
Alana Benson: Yeah, and like Liz said, this is something that people actually have some control over when it comes to investing. And there’s not a lot of things that you do have control over, so you should definitely look into your fees. But I don’t think this is something that you should be super stressed about. Once you know what fees your brokerage charges, you can kind of adjust your plan. So if your brokerage charges a trading commission, maybe keep that in mind if you’re regularly trading stocks and you can also check out the expense ratios of funds that you’re invested in and see how much you’re paying and maybe explore cheaper options if the fees are pretty significant.
Sean Pyles: Is there any room for a negotiation? Say you’ve been with a brokerage for a while, you find another one that has lower fees and you call up the brokerage that you’ve been with and say, “Hey, there’s someone else over here that has lower fees. If you lower yours, I won’t jump.” Is that possible?
Liz Weston: A lot of it is baked-in, in terms of what they’re going to charge you for trading commissions, if they’re charging those and what the expense ratios are of the underlying investments. But if you are paying someone to manage your money for you, if you’re paying a financial advisor a 1% of assets fee for example, or you’re paying some kind of brokerage rep fee, there may be some room.
Liz Weston: So you can let them know that you’re looking around and you think it’s a little expensive what they’re charging and maybe you can get a break. One thing we should talk about is robo-advisors because that’s another way to get access to some pretty cheap investment accounts.
Alana Benson: I love the idea of a robo-advisor, particularly for the folks who otherwise just would be too stressed out, or not have enough time or get a little intimidated by the research that they should do to start investing on their own. And a robo-advisor is great because like you said, the fees are pretty minimal for the service that you get and you just don’t even have to think about it. You don’t have to know any of the lingo. All you have to do is set up an auto deposit and kind of forget about it.
Sean Pyles: Well, speaking of lingo, we should probably define what a robo-advisor is for those who don’t know. These are services that use computer algorithms to build and manage a portfolio for you.
Alana Benson: And when you invest through a robo-advisor, you’re paying for them to manage those investments for you. So those fees will typically float around 0.25% of your assets. So if you have $10,000 managed, you’ll pay $25, but remember they’re doing all of that work for you. So that’s not just an expense ratio that you’re paying, you’re actually paying for a service.
Sean Pyles: Some brokerages will charge you for things like inactivity fees, and robo-advisors don’t tend to do that. Is that correct?
Alana Benson: That’s correct, because essentially a robo-advisor will be doing the managing for you. So it’s kind of tough to have an inactive account with a robo-advisor, particularly if you have auto deposits. There could be robos out there that do charge for that. So these fees will vary by broker or robo-advisor. So it’s always really important to look into what fees you’d be charged before committing to one.
Sean Pyles: And one thing I’m betting our listener and a lot of other listeners out there are wondering, is how they can reduce the fees that they’re paying on investment accounts?
Alana Benson: The first and most important thing is to just know what you’re going to be charged. Expense ratios may not actually show up on your monthly statement. They’ll likely just be deducted. So it’s good to know what kind of expense ratios, whether you’re working with a robo-advisor or you’re buying investments on your own, what those fees are going to look like for expense ratios. But the other thing is that you can always look at a brokerage or robo-advisors fee sheet. This’ll give you a whole list of every possible fee that they could charge you.
So things like those closing or inactivity fees, that’s where they’ll be listed. So definitely do your research ahead of time and just make sure you know what you’ll be charged. The second thing to do is look at your investment fees that you’re already being charged. So if you’re in an actively managed mutual fund, you can kind of consider some of those lower cost investments like index funds, look at the price point difference and see what you’re comfortable paying.
Sean Pyles: This is also a good reminder for folks to shop around when they’re looking for various investment accounts. When people are considering one account or another, how do you think fees should factor in?
Alana Benson: Fees are pretty important because they do eat into your bottom line, but they are just one factor alongside performance and sector. Like if you wanted to invest in a particular fund like emergent technologies, that kind of fund, because it’s so particular, might be a little more expensive. You can look at the existing diversification in your portfolio. You can also look at what kind of tools and research that that brokerage has because some are better than others, and if you really want to get into the nitty-gritty of your investments, that might be something you’re willing to pay a little bit more for. So just remember that fees are important, but it can be balanced with other things.
Sean Pyles: All right, Alana, I think that covers this pretty thoroughly. Do you have any final thoughts for our listener?
Alana Benson: I think it’s just really important for investors to remember that they’re in control. They have the choice to make about what kind of investments matter to them, and some will charge more than others, but at the end of the day, it’s their choice. So they should remember that they have the power. If they’re getting charged a really high fee, they don’t just have to pay that; they can look around and find other options.
Sean Pyles: I know what you’re thinking. There’s a lot to consider when it comes to brokerage fees, but don’t be discouraged. If you’re feeling overwhelmed, then you could always work with a financial advisor to help you sort things out. And you know what? That’s what our next listener question is all about. So let’s get into it.
Liz Weston: This episode’s money question comes from Andrea, who has a number of questions about financial advisors. Here they are. Any recommendations on how to interview and choose a tax or retirement advisor? Are there any red flags to look out for? And specific questions that should be asked? And should you have both types of advisors or can one cover both areas? Also, at what point should a family consider estate planning? How do you know when you need this type of service? I’m interested in locating and engaging with advisors that 1. won’t take advantage of me and 2. are willing to consider my best interests. Thank you.
The good news is that it’s never been easier to find good, objective, affordable help with your finances. The bad news is that it’s still not necessarily easy to find the right financial advisor.
Sean Pyles: That is true. I think that we should maybe start off by talking about what exactly financial advisors do. At the highest level, a financial advisor is someone who helps people manage their money and reach their goals. There are many different types of financial advisors though, who have different qualifications and areas of expertise. Someone who’s the tax advisor, for example, might not be able to help you with investment advice. Alana, can you give us a quick rundown of the different types of folks that one could hire?
Alana Benson: So there are a lot of different names of financial advisors and some mean more than other things. For example, anyone can call themselves a financial advisor. Joe Schmoe down the street with no qualification could legally call himself a financial advisor, and that’s something that you really want to look out for. At the bare minimum, a registered investment advisor is governed by the SEC [Securities and Exchange Commission] or a state securities office, and they can legally provide personalized investment advice. So at the bare minimum, someone who is talking with you about your money should have that designation.
Ideally, you could work with a certified financial planner. This means that they have a very rigorous education and they have a fiduciary responsibility, which just means that they have to work in your best interest. And that really addresses what this reader is asking about. They want to make sure that this advisor isn’t going to take advantage of them, and that is so, so important. The other designation, if you’re looking for help with your taxes, is a CPA or a certified public accountant, and they’ll be able to answer all of those nitty-gritty tax questions.
Liz Weston: I’d also recommend enrolled agents because they’re not CPAs, but they are tax pros and they can be a little bit more affordable than CPAs. So that’s another thing to think about. If you’re looking for just strictly help with taxes.
Sean Pyles: Another type of financial advisor that folks might not think about is actually credit counselors. And these work at nonprofit credit counseling agencies, and they offer free debt and credit advice for people who maybe can’t afford financial help but would benefit from it.
Liz Weston: Another category to look into is accredited financial counselors and accredited financial coaches. These folks tend to be employed by credit unions, the military, sometimes they’re available for free, sometimes they have a sliding scale, but they specialize in issues that are common to middle-class folks. So it’s not just estate planning, trust issues of the high net worth. They really are on the ground and can help you with things like budgeting and debt, stuff like that.
Sean Pyles: Paying someone to manage your money is something that I think a lot of people either can’t afford or don’t think that they need. When do you think someone should think about hiring a human, versus DIYing it or employing a robot on the internet?
Alana Benson: This is a great question. It’s all about how complex your individual picture is. If your situation is getting very complex and say you got married and you bought a house, and your parents are getting older, and you’re having kids and trying to figure out where your money should go in the future, that might be a time to talk to a financial advisor. Say you got a new job and they offer a lot of different health care plans or an HSA [health savings account], versus an FSA [flexible spending account]. Those kinds of things are a great time to get in touch with someone so you can ask your individual questions.
If you are just looking for investment management and you don’t care at all about picking your own stocks, you just know you’re supposed to invest, but you don’t really want to have to do anything, a robo-advisor will automatically invest your money for you. But it’s not going to be the same as going to someone saying, “Hey, I want to make an estate plan. Can we do that?” And it just depends on what you want to do with your money and how complex your life is getting.
Liz Weston: I also think it might be a good idea to think about hiring somebody if you’re not keeping up with the DIY chores. If you are not rebalancing your account or you’re not staying up on tax law or whatever needs to be done. You can also consider hiring somebody if you’re having trouble coming to an agreement with your partner. You may need a neutral third party to work things out. And also, this is kind of interesting, but it’s truly a thing: Some people hire financial advisors because they want somebody to blame if things go wrong, and financial advisors typically will have errors and omissions insurance. Basically it gives you somebody to sue. So not the best reason, but it’s a reason. So there you go.
Sean Pyles: For me, I think a lot of personal finance management comes down to understanding specific products, which are often tied up with different acronyms, and the way that these products intersect with your financial goals and often tax liabilities and this can get extremely complicated. So for me, I am trying to get help from a team that I’m building — one of my financial goals for next year — that can help me understand all of these different products that I should be leveraging, how I can use them in the most efficient way tax-wise and also in a way that can help me meet my personal goals.
Liz Weston: Yeah, exactly. That’s really smart to think about who can help you. And a lot of times it’s the tax person who’s the gateway financial advisor. It’s like we look at taxes and go, “Oh, I really don’t want to deal with this.” So that’s the first person that we hire.
Sean Pyles: Yeah. Well, Liz, I actually want to talk for a minute about your situation because interestingly, you are a certified financial planner, yet you have a team of folks that help you manage your money. Can you talk with us a bit about how and why you decided to outsource some of your money management?
Liz Weston: Yeah, when I started getting the CFP credential, I thought, well, a reasonably intelligent person can handle her own money. And by the time I’d finished the education, I had my tax person lined up, I had an estate planning attorney. And later I added all kinds of other people, including, I have a terrific insurance agent now. And the last part of it was hiring our own CFP. And part of it was that thing about the cobbler’s children having no shoes, is that I was advising everybody else and I wasn’t taking care of my own business. So things weren’t getting done that needed to be done. Another part of it is just really nice to have somebody to bounce ideas off of. My CPA lives and breathes taxes so that I don’t have to.
Liz Weston: And to me that is just amazingly freeing. It’s well worth the money that I pay her. Same thing with the insurance agent. We just had an issue and I was able to go to her and say, “Can you help us out with this?” She moved mountains, got things done. It really is nice to have people on your side.
Sean Pyles: Think it’s really telling that in the process of going through the various courses you have to take to get the CFP certification, you saw just how complex all these different areas of money management are and you decided to get someone who can handle this for you to take that weight off of you.
Liz Weston: Exactly, because you don’t know what you don’t know. And that’s what really trips people up. Particularly I think if you are heading towards retirement, you really, really, really need another set of eyes on your plan because you’ve never retired before. And a good financial planner will have many, many clients who have been retired and they know all the things that can come up, all the ways that you can screw it up. And again, this is your money for the rest of your life. You need to make sure you’re making the right choices.
Sean Pyles: Well, now I think we should probably talk about how and where people can find financial advisors for tax, retirement or general money management advice. Alana, where do you think people should go for that?
Alana Benson: You definitely want to work with a CPA for taxes, as Liz said that they really live and breathe that sort of thing. They’re the person to talk to. A CFP for financial advice. One note on this is it’s really, really important to do your due diligence and double-check their certifications. Some people could have a delinquency on their designation, maybe they had a violation. There are websites where you can go and check these designations and make sure they’re up to date. Make sure they haven’t had any lawsuits and make sure they’d be a really good person for you to work with. So definitely before you work with anyone, double-check that their designation is what they say it is and you’ll save yourself a very big headache by doing that small amount of work upfront.
Liz Weston: We should also mention that there are financial planners who have a tax background, those are CPA-PFS. So the PFS stands for personal financial specialist, and if you want to get a tax person but also want financial advice, there is that all-in-one designation you can look for. Alana, there used to be a pretty wide divide between the people who worked in person and then the people who only worked online or robo-advisors. That’s kind of blurred a little bit with the pandemic, but can you talk about online, versus in-person financial advice?
Alana Benson: So traditional in-person financial advisors often charge around 1% of your money that they manage for you. The more money you have under management, the steeper that fee is going to be. Some people just want to meet with someone in person and that is totally fine. If that is your comfort zone and you want to pay for that, that is a personal choice. But online you are able to find services that will help you connect with an online financial advisor and they often charge a much lower fee of the percentage of assets that they manage for you. And they can do just about everything that a traditional in-person advisor can do. And a lot of times these services will also have access to tax help and tax preparation.
Those are a nice in-between if you don’t want to necessarily pay the 1% fee of meeting someone in person and you can pay a cheaper fee. And a lot of these services now do video calls so you can still meet with someone and talk to a human being. It’ll just be over Zoom or over video conferencing. There’s also a lot of one-time services that can be offered. I know Ellevest is a provider that you can purchase one-on-one sessions with a CFP, or you can even do career counseling and some other providers offer these one-time services as well. If you need help with something very particular, that might be a good option.
And then there are some providers that even do a mix of robo-advising, so managing your money with a computer algorithm and access to human advisors for less as well. There’s a lot more flexibility than there used to be and there are more affordable options. So you don’t just have to be this very wealthy person to go and get help with your finances. There’s all kinds of options for every financial threshold.
Liz Weston: In addition to that 1% all-around fee, you can find people who charge by the hour, for example. Or maybe have a monthly retainer fee and that can be a more affordable way to get help.
Sean Pyles: Choosing a financial advisor is a pretty serious decision. You want to make sure that this is someone that you can trust, that you can have a healthy, open and ongoing relationship with. While there are a lot of options, choosing the one that’s right for you can be a little bit of a challenge. When someone is vetting a potential financial advisor, what questions do you think they should ask?
Alana Benson: So first and foremost, the most important is to ask them if they are a fiduciary. And again, that just means that they’re legally obligated to work in your best interest. They won’t offer you products because they’ll make a commission on them. They will offer you things that are truly the best option for you. Well, another important thing is to ask how they get paid. Advisors can use that assets-under-management structure I was talking about, but people use a variety of fee structures. So it’s really important to upfront understand how you’re going to be paying them so that down the road you’re not saying, “Well, wait, I thought it was going to be a lot less than this.”
You definitely also want to, again, ask about those qualifications. And then you can also ask about how you’ll communicate. Make sure that you’re comfortable talking with them in the way that you would prefer, whether that’s over the phone or over email. Make sure you know how frequently you’ll get to speak with them. Maybe it’ll only be four times a year or maybe you’ll have unlimited access. And that’s going to be a really important distinction. Like if you need a lot of help, you want to make sure you have unlimited access to your advisor so you’re not just holding out for those quarterly phone calls.
Liz Weston: There’s also the issue of are you going to be talking with the same person each time, or could your case be handed off so that you’re talking to a different CFP or different advisor every time. With the less expensive services, you may not have one dedicated person to talk to.
Alana Benson: It’s really important to figure that out upfront because that is the difference of developing a long-term relationship with one person who gets to know you as a person and gets to know the things that you really care about and maybe even gets to know your family background a little bit. And if you develop that relationship over time, that can be a really, really valuable asset, versus speaking to a different person every single phone call.
Sean Pyles: Our listener is also wondering about red flags to look for when vetting an advisor. What do you guys think about that?
Alana Benson: I think one of the biggest things is that they can’t answer your questions clearly. If they’re giving you really vague answers about payment or what you’re going to be invested in, that is definitely a red flag. Another thing is to just make sure that you click with them. Do you feel comfortable communicating your concerns or are you kind of holding yourself back? Really trust your gut and see if this can be a person that you can have a really solid relationship with.
Liz Weston: You don’t want to be the first time that they’re dealing with certain issues, like stock options or small-business issues. Retiring or being a government employee, being a military employee, you don’t want them learning on you. So if they have other people who are like you in that situation, they’re likely to have a deeper knowledge of what you need and how to get you to your goals. Alana, how could people decide if they’re better off having one advisor doing a lot of things or having specific advisors for different purposes?
Alana Benson: I think it really depends on the person. It’s more important to have a team that all works together if you’re going to work with a team. I know a lot of advisors will work with your finances and then call your tax person and make sure that everybody plays together nicely and let you live your life. In terms of whether it’s better to have one for everything, again, I think it just depends on the person. If you find an advisor who also has a background in tax and they can kind of take care of everything for you, that might really, really work for you.
But just like you were saying, Liz, not everyone can be an expert in everything. And if your financial picture gets more complicated or you have to deal with stock options or you have to deal with estate planning, you may want to bring in a specialist who really, really knows their stuff in that field and then they can work with your existing team. But again, it depends on the person.
Liz Weston: Yeah, and good people tend to know good people. That was the case when we hired our financial planner. She knew the insurance person that we have now and she knew the CPA that we have now, recommended them both and we’ve been really happy. So if you do find one of these professionals and want more, maybe go to them for recommendations.
Sean Pyles: Our listener’s also wondering about when to consider estate planning? The short answer is ASAP. You should probably have an estate plan yesterday and it won’t take that long to sort out. It’s very important, but it’s especially important if you have kids that you want to take care of.
Alana Benson: It’s much better to have those things ready and in place, versus to not have them.
Liz Weston: And there’s two documents actually everybody needs. Even if you decide not to have a will, which I can’t imagine why you would. But you do need to have advance directives so that somebody can make decisions for you if you are incapacitated for health care. And you need a power of attorney for financial decisions. So those are about quality of life. That’s not what happens to your stuff after you die, that’s while you’re still alive. And as Sean said, if you have minor children, really you need to name a guardian. You don’t want them to go through the court or the foster care system, heaven forbid. So do that because you love them, get it done.
Sean Pyles: Right. And there are a lot of resources available online like Rocket Lawyer is a service people can pay for, some have as a benefit from their employer. Also, websites like Nolo.com, they have templates for certain documents like this that can help you get started.
Liz Weston: Even if you decide to go to an attorney later, if your situation gets more complicated, at least the online stuff will put something in place for you so you have it in case of emergency.
Alana Benson: And estate planning may be one of those things that you could pay a one-time fee for. And then just go speak to someone who could help you draw up those plans. And it’s not a fee that you’re paying on an ongoing basis; you could just pay it once, get those documents squared away and then they’re done.
Sean Pyles: All right. Well, Alana, do you have any final thoughts for Andrea or anyone else that’s in the market for one or a team of financial advisors?
Alana Benson: I really think the biggest thing is to trust your gut. Know that this is a relationship that you’re starting to form. If you’re working with a person, whether it’s online or if it’s face-to-face, make sure you feel comfortable with them because at the end of the day, you are paying them as a service and it’s your money. You don’t owe anybody anything upfront. And a lot of these advisors will offer free consultations. So just make sure that you feel comfortable. I think that’s the most important thing.
Sean Pyles: Well, thank you so much for talking with us.
Alana Benson: Yeah, thanks for having me.
Liz Weston: So, Sean, how has the way you work with the financial advisor changed since we had that conversation?
Sean Pyles: Well, to start, I work with one now at all, which is a change. I have a CFP that I check in with a couple of times a year to talk about my financial goals and how I can meet them and how I can maybe course-correct to hit them by the end of the year. And that’s one thing that I didn’t realize before I had a financial advisor is that it’s not like you have to be in constant communication with them. You’ll likely talk with them a little more regularly in the beginning and then you’ll go off and do the slow work of meeting your goals and then you’ll check in with them a few months later. Or at least that’s been my experience.
Liz Weston: Yes, exactly. And for me, I mentioned at the top that I wanted somebody that could help my husband if something happened to me. He’s a very gifted artist, but money just isn’t his thing and I didn’t want him to have to worry about finding help if he needed it. So it’s really a huge relief knowing that all the money management isn’t on my shoulders. I love having somebody to answer any questions that we have. And there is a small element of, “See, I told you so,” when she sides with me.
Liz Weston: And that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]
Sean Pyles: Remember to follow our show on your favorite podcast app to automatically get new episodes in your feed. If you’re listening on Apple Podcast or Spotify, then tap the 5-star button to rate the show. We really appreciate it.
Liz Weston: This episode was produced by Cody Gough and myself, with help from Sean. Kaely Monahan mixed this episode with additional audio editing by Cody. And a big thank you to the folks on the NerdWallet copy desk for all their help.
Sean Pyles: Here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the Nerds.