Home Economics

Now is the time to start working with a financial planner. Written by Lori Johnston

When it comes to planning your financial future, the sooner, the better. Ideally, retirement planning should begin with that first job out of college, when embarking on a career often brings decisions about a company-sponsored 401(k) and other long-term investments.

"The magic of financial planning is the longer window of time a planner has to work with, the better the job they can do with a client," says Victor Wilkerson, vice president of financial planning services for First Horizon in Atlanta.

While some firms assist only clients with more than $1 million to invest, other financial planners will work with those who have much less than that. "They ought to be jumping in as quickly as they can. Definitely before they buy the first house," says Jeff Bulvin, executive vice president with the Georgia branch of AXA Equitable.

Although planners advise people to start early, the typical client remains a two-income couple aged 55-64 years old with annual gross income of $100,000 to $149,000, and an annual discretionary income of $10,000 to $19,999, according to a 2006 survey by the Colorado-based College for Financial Planning.

"Part of the problem we see is that people actually get started way too late," Bulvin admits. But he adds that individuals can start a brokerage account for as little as $100 a month.

"That's where some of the misconception comes in," he says. "People think that financial planners cost a lot of money and you have to go to the table with $10,000 or $30,000 or $50,000 at a minimum. That's really not the case." Some financial planners work on an hourly basis while others charge a flat fee, so it's important to ask what you're getting and what you're paying for.

 
Bulvin also recommends getting referrals from friends, instead of making a cold call, to find a qualified planner. Another good source: the Financial Planning Association, which has an online referral service at fpanet.org.