What’s that again? Think of these as the primary-care doctors of the fiscal world. After examining your entire portfolio, they give advice on virtually every pocketbook issue—from budgeting to stock picking. And a planner can work with you to set big-picture goals, like buying a house, paying for college, and starting a business, and put you on a savings-and-investment path to help achieve these objectives.
When to hire: If you’re befuddled by how much to put in your 529 versus your 401(k) (or by similar money-management questions), call a planner. While some personal-finance websites offer these services, a planner provides customized advice, which is important if you’re facing a major life change ( job loss, a baby, marriage), if you’re behind on retirement savings, or if you inherited an investment and don’t know what to do with it, says Eleanor Blayney, a certified financial planner and a consumer advocate for the Certified Financial Planner Board of Standards, an industry group.
There are several types of advisers: commission only (charges a commission on the products, like mutual funds and stocks, that she sells you), fee-based (charges a consultation fee and then possibly a commission), salaried (earns a salary from the investment company she works for, such as Fidelity or Vanguard, that is not tied to what you do with her advice), and fee-only (charges by the hour, by a percentage of assets managed, or by a flat fee or a retainer and does not earn fees directly from the companies she recommends). Conventional wisdom advises to go with a fee-only planner, since she can’t move your money around just to get a commission. But regardless of whom you choose, “see an adviser about three to four times during the first year to get on track,” says Manisha Thakor, a coauthor of Get Financially Naked (Adams Media, $13, amazon.com). “After that, touching base once or twice annually is sufficient.”
Expect to pay: Approximately $150 to $300 an hour for a fee-only hourly planner; a commission-based planner will charge 2 to 7 percent of the sales.
How to find a good one: Go to fpanet.org and search by how the planner charges, your net worth, or your specialty area (retirement, college, and so on). Look for someone designated as a certified financial planner (CFP).
2 of 6Clayton Junior
What’s that again? These tax experts relieve you of the burden of preparing your annual tax return and look for ways to reduce your future tax liability.
When to hire: Can’t make heads or tails of what can be deducted on Schedule A? Keep making errors on the forms and fretting about a possible audit? Make an appointment. Small-business owners and those who have received an inheritance or exercised stock options generally ought to hire an accountant, too, since it’s hard to keep up with changes in the tax laws. But not everyone needs this service: With a basic return—for example, W-2 wages, interest and dividend income, plus deductions for charitable donations and mortgage interest—you will probably be fine using TurboTax or similar tax software, says Alex Gelber, an assistant professor of business and public policy at the Wharton School of the University of Pennsylvania.
Expect to pay: About $130 for the preparation of a nonitemized return; $230 or more for an itemized one.
How to find a good one: Ideally, use a certified public accountant (CPA): They have received the most rigorous education and testing and are licensed by the states that they work in. You can search for one at nsacct.org, the website of the National Society of Accountants. Or ask your family and friends for a recommendation (a good idea when hiring any financial pro).
3 of 6Clayton Junior
What’s that again? You’ll work with one (or more) of these folks when you’re shopping around for coverage for your vehicle, home, life, health care, or long-term disability.
When to hire: It’s simple. Contact an agent if you need help figuring out what type of coverage and how much coverage you should have. That’s something insurance websites can’t assist you with. “Agents learn the details of your life and help you determine the specifics of your coverage,” says Jack Hungelmann, an independent insurance agent and the author of Insurance for Dummies (Wiley, $22, amazon.com). And down the road, if you have to file a claim (say, an SUV sideswipes your hatchback or your basement floods), the process will go more smoothly if you have a relationship with an agent.
Expect to pay: Zip. Agents work on commission from insurance companies, usually earning around 10 to 15 percent of your annual premium. To ensure that you are getting the best deal, hire an independent agent who is an expert in the type of coverage you’re seeking and who works with multiple insurance companies.
How to find a good one: Your first stop should be trustedchoice.com, which is owned by the Independent Insurance Agents and Brokers of America, a trade association. Ideally, you want an independent certified insurance counselor (CIC), who receives 100 hours of education, plus 20 hours of continuing education annually.
4 of 6Clayton Junior
What’s that again? These lawyers help clients address the various worries that keep them up at night—from how to express their end-of-life directions to, yes, how to distribute an estate.
When to hire: If you have a complicated work or family situation that requires careful contingency planning, says Stephen C. Hartnett, the associate director of education for the American Academy of Estate Planning Attorneys. (To name just a few examples: You own your own business; you have a special-needs child; you are in a same-sex partnership; you have more than $1 million in assets.) An estate attorney can also help you dictate how your life insurance, your IRA (individual retirement account), and your 401(k) assets are allocated; draw up a living will; and name a health-care proxy (a person who can make medical decisions on your behalf if you’re not able to do so).
Expect to pay: Around $1,000 to $2,500 for a basic estate plan for a single person.
How to find a good one: Hire a lawyer who belongs to the American Academy of Estate Planning Attorneys (aaepa.com). Members must complete at least 36 hours of continuing education a year in estate, tax, probate, and elder law.
5 of 6Clayton Junior
What’s that again? Shopping for a home loan can be one of the most daunting financial chores you’ll face. These intermediaries act as a liaison between borrower and lender and can simplify the process by researching various loan options, counseling consumers on their choices, and facilitating the transaction, says Jim Pair, a certified mortgage consultant (CMC) and a former president of the National Association of Mortgage Brokers (NAMB), an industry organization. These pros got a bad rap during the subprime-mortgage crisis, but they can be invaluable in securing a good deal.
When to hire: Anyone in the market for a home should consider going with a broker, but that is particularly true if your credit score is below 680 (or you have other credit problems), if you are self-employed, or if you need a jumbo mortgage (more than $417,000 in most locations). “In such cases, a broker could find you a better interest rate than what you could get yourself,” says Liz Weston, an MSN.com columnist and the author of Your Credit Score, Your Money & What’s at Stake (FT Press, $19, amazon.com). But even if you do hire one, do a little digging yourself to verify that you’re getting the most favorable rates and terms. (Go to schwabbank.com for current information.)
Expect to pay: One to 1.5 percent of your loan amount; often the lender covers this fee.
How to find a good one: Go to namb.org; look for a broker who has a lending integrity seal from the organization. This mean she subscribes to a code of ethics, has had a criminal background check, and meets certain educational requirements.
6 of 6Clayton Junior
What’s that again? Surrounded by inscrutable stacks of bills from hospitals and doctors’ offices and your health-insurance provider? An advocate can help. According to the Medical Billing Advocates of America, 8 out of 10 medical bills contain some sort of error. An advocate will scour bills for overcharges and nonbillable and duplicate charges that violate the ethical guidelines of the American Medical Association as well as Medicare law (which is established by the federal government in the Social Security Act) and state insurance guidelines. He will also review those baffling insurance statements to guarantee that what your policy is supposed to cover is actually paid by the insurer and doesn’t come out of your pocket.
When to hire: Maybe you’ve spent hours on the phone with your insurance company and you’re no closer to getting a claim processed accurately. Or you’re unable to get a medical-billing error resolved. “Advocates complete training to negotiate with these businesses,” says Pat Palmer, the founder of the Medical Billing Advocates of America (MBAA), a professional organization.
Expect to pay: Approximately $50 to $150 an hour or 10 to 35 percent of the amount your bills are reduced by.
How to find a good one: First go to billadvocates.com, the site of the MBAA, to find a consultant in your state. Then, since this is a fairly new profession, one without national professional standards, be sure to ask for at least three client references before hiring an advocate. When you start working with one, you should receive a free consultation. If you proceed, you will sign a contract that states what specific services the advocate will provide, the fee, and how it will be paid.
Take note: Depending on the fee structure you agree upon, you could still be responsible for the advocate’s fee, even if she ultimately can’t remove or reduce any of your medical charges.