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A case for fee-for-service financial planning

calculator, money, savings, retirement


A reader is so happy with her new financial plan for retirement that she wrote me a testimonial.

Give it a read to see if fee-for-service financial planning is right for you. That's where you pay an hourly or flat rate to consult with an accredited planner. You can order up a full-on financial plan or look at specifics like retirement. Either way, no investments are sold. You're just buying advice.

Fee-for-service advice is one of the most-discussed topics in the e-mails I've had from readers in the past year or so. The latest is from the reader who bought a financial plan for her and her husband. Here's her story:

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Rob, at 60, my husband and decided to put down the plow. With almost 100 years of working between the two of us, we were done with the scrimp-and-save part of our lives and had reached the chill-and-spend part.

Our financial advisers told us not to worry, that we had enough money to see us through. But we realized if we wanted a more comprehensive plan, we would need help.

The banks and wealth management firms we spoke to were all keen to do a plan for us - as long as we were prepared to transfer our money over for them to manage. Once our money was there, they purred, we would be beamed into the ultra-protective circle where they would they proceed to reveal their expertise. As we are of a mind that not many managers are ever going to beat the market, we felt that planning and investing should be separate considerations. We were not prepared to move a lot of money just to get a plan.

Our objective was not to get a free plan, but to get a good plan from a firm we could work well with into the future. Through an article, I got a contact for a financial planning firm in my city. They provide retirement plans, period. They plan, by the numbers. They don't handle investments, they don't give investment advice and they don't want to manage any of our money.

Within weeks, we got a comprehensive 30-year plan from them, for under $1,600. After the first draft, I asked them to examine the potential benefits of delaying CPP and OAS for the two of us. They ran the plan again and, for us, delaying government incomes until we are closer to 70 will pay dividends. As you can imagine, this delay means we are drawing down on our RRSPs now instead of at 70, something our investment managers don't really like. Too bad, eh!

And, for a few hundred dollars each year, if we want, we can check in again with our planning firm and they will help us re-adjust our numbers and plan. Finding this planner was well worth the time and investment.

Start your search for a fee-for-service planner here.

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About the Author
Personal Finance Columnist

Rob Carrick has been writing about personal finance, business and economics for close to 20 years. He joined The Globe and Mail in late 1996 as an investment reporter and has been personal finance columnist since November 1998. Rob's personal finance columns appear in The Globe on Tuesday and Thursday, and his Portfolio Strategy column for investors appears on Saturday. More


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