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The best financial-planning options for near-retirees

The best financial-planning options for near-retirees

by Lisa Gerstner
April 20, 2018

The best financial-planning options for near-retirees

The best financial-planning options for near-retirees

by Lisa Gerstner
April 20, 2018


To help you decide what kind of financial advice is best for you, see if your situation is similar to this hypothetical client:

The Garcias are a 65-year-old couple who plan to retire in a year. They have more than $1 million in 401(k)s and taxable and retirement accounts. Goals include investing their savings, which will supplement pensions and Social Security, so they will stay ahead of inflation without running out of money. They'd also like to pay off the remaining $75,000 balance on their mortgage.

With more than $1 million in assets, this couple can afford to pay for personal advice, and they may need it. They're facing a host of complex decisions, and they don't have time to recover from financial mistakes before they retire.

Among the issues an adviser can address: how to invest their nest egg so it will stay ahead of inflation without exposing them to too much risk; when to file for Social Security; and the most cost-effective way to pay for healthcare, including long-term care.

A robo-adviser probably won't provide everything the Garcias need because managing their investments is just one of the many tasks they face going forward. They'll want to work with a planner who has expertise in a wide range of areas, from estate planning to minimizing taxes on their retirement income.

"Comprehensive financial advice is so critical; it's more important than investment advice," says Ed Gjertsen, vice president of Mack Investment Securities and former president of the Financial Planning Association. "If I don't look at whether you have a will and power of attorney and something happens to you, whatever we've made in the markets could be obliterated."

Paying a Percentage of Assets

One option is a registered investment adviser, often called a money manager. RIAs offer ongoing management of your portfolio and may also provide access to more-sophisticated investments, such as real estate and hedge funds. Some RIAs include broader financial-planning services, too, usually for no additional fee. The couple could check out the advisory units of regional banks, such as SunTrust or First Republic. Or they could investigate independent RIA firms. With more than $1 million, they would have no trouble finding an RIA to work with them. For example, Carlos Dias Jr., an investment adviser and president and CEO of Excel Tax & Wealth Group, near Orlando, Fla., specializes in retirement, estate and tax planning along with investment management. He requires no asset minimum and customizes fees for clients based on the amount of assets managed and how extensive their needs are. Clients with more than $1 million pay less than 1%.

Another option is a fee-only planner who charges a fee based on a percentage of assets. Typically, the fee is about 1%; some planners charge 1.5%.

Fee-For-Service Adviser

A CFP who charges a retainer or by the hour could be a good choice if the Garcias are comfortable managing their investments. If they are interested in buying long-term-care or other types of insurance, they may want to consider a fee-based planner. These planners are typically compensated by a combination of fees and commissions. Gjertsen, who is a CFP, charges $250 an hour, and the cost of a comprehensive financial plan starts at about $2,000. If his clients decide to purchase an insurance policy that pays him a commission, he'll use the commission to offset their fees.

Premium-Level Service From a Financial Firm

The Garcias are also eligible for premium-level advice from their financial services firm. For example, clients of Fidelity Investments' Private Client Group receive a dedicated financial adviser who will help them with their investments and provide an annual review. There is no fee for this service, but to qualify, clients must have at least $250,000 invested in Fidelity accounts and at least $1 million in investable assets.

Vanguard provides a dedicated CFP to clients with more than $500,000 in assets. The $500,000 asset threshold also qualifies you for Schwab Private Client, which provides access to a dedicated advisory team.


This article was written by Lisa Gerstner from Kiplinger and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

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