Affordable, more reliable financial advice

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Here's some good news from the world of money: The quality of professional financial advice is getting better and more affordable, just in time for all the folks who are probably feeling overwhelmed by the myriad details of their own financial lives.

Advisers are increasingly eschewing commissions to give straightforward advice, boosting their use of technology to provide better services, and tailoring recommendations to the needs of their clients, mainly because the market demands it.

Consumers are getting smarter and realizing there are a lot of advisers out there who are calling themselves planners, but are product focused, says Susan Black, director of financial planning at eMoney Advisor, a company that provides the technology that many advisers use. They are more discerning about what types of advisers they wish to trust.

Which is not to say there aren't still some incompetent, fraudulent or compromised practitioners out there. But it may be easier to avoid them and get exactly the advice you need, if you hire a planner according to these guidelines.

-- Competence is still key. It's not good enough to have an honest adviser if he is not very bright or knowledgeable. Look for one who has been in the business long enough to have weathered a couple of bubbles and bursts. They should have decent credentials, such as a CFP (certified financial planner) or a CFA (chartered financial analyst), and state-of-the-art portfolio management tools. Not to mention an investment philosophy they can explain to you in a way that makes sense.

Some private advisory networks require their members to meet additional quality standards. Some to check are the Alliance of Cambridge Advisors (www.cambridgeadvisors.com) and the Paladin Registry (www.paladinregistry.com/).

-- You should be paying them, and they should be working for you as a fiduciary. That leaves out brokers who might be nice guys but who make their money selling investment products. There is a conflict inherent in that arrangement, and an ample amount of research demonstrating that it fails to result in good returns for customers.

The designation fee-based clouds the water. Only fee-only advisers eschew all payments for products. If a fee-only adviser wants to recommend a product that he can't find without a commission, such as a certain kind of insurance, he should then reduce your fee by exactly the amount of the commission. That removes his financial incentive for choosing that product. You can find fee-only advisers at the National Association of Personal Financial Advisors (www.napfa.org).

-- One adviser might not be enough. Even the best stock market guru won't know everything about taxes, or estate planning or college saving or retirement savings rules. A great financial plan includes all of those pieces, so that leaves consumers with a few choices: You can find a planning firm that is big enough to integrate all of these specialties, or you can parcel it out and hire different experts to advise on separate pieces. You might want a certified public accountant, an actuary, and a lawyer or two to tackle different pieces of your comprehensive plan. In that case, you might want a financial planner who will offer by-the-question advice, or suggest investments you could buy for yourself. You can find experts willing to pass on their smarts by the hour at the Garrett Planning Network (www.garrettplanningnetwork.com).

-- Bells and whistles are nice -- if you are willing to pay for them. A full-service financial advisory firm that manages all of your money (and extracts a percentage or so of it for that service) should do more. The most up-to-date, full-service advisers will give you on-the-road access to all of your accounts, consolidated in one place, says Black.

They may even offer to track your frequent flyer, hotel club or credit card points. And they will call you, just to chat, during times like last week when many portfolios lost 4 percent or more in just a few days. Because the true value of a good adviser isn't just in the degree and the software, it's in the relationship that will see you through the kind of marketplace confusion that sent you for help in the first place.

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