Finding a Financial Advisor
MOAA’s newest member service can help.
By former Army Capt. Phil Dyer, CFP, Deputy Director, Benefits Information

As an experienced CFP, I am the first to admit that nothing I do is rocket science. Any moderately intelligent person with enough time, energy, and interest can put together a decent financial plan using financial publications and the Internet. But if you would rather spend your free time with family than poring over mutual fund prospectuses and insurance policies, consider consulting a financial advisor.

Commissions. This is the oldest and most common form of compensation. The advisor is paid through commissions earned from the sale of insurance and investment products.

Fee-based. This usually is synonymous with fee-plus-commission compensation in that the advisor charges a fee to prepare a financial plan and then implements the plan with the sale of commissioned products.

Salary. The advisor is compensated via a base salary but may earn bonuses or incentives for reaching his or her sales goals or quotas.

Fee-only. The advisor is compensated exclusively through fees paid directly by the client; he or she does not accept commissions or compensation from any other sources. Fees may take the form of an annual retainer or a percentage of assets under management.

Hourly fee-only. The advisor is compensated by an hourly fee, similar to a CPA or an attorney. Engagements range from one-time projects (such as college or retirement planning) to second opinions or comprehensive financial plans. All methods of compensation can have inherent conflicts of interest, but many financial writers agree the hourly fee-only approach has the fewest.

Because MOAA member surveys consistently rank financial planning in the top three member concerns, MOAA has been looking for a cost-effective, high-quality financial planning service. After diligent efforts by headquarters’ staff and boardmembers, MOAA is pleased to announce its newest sponsored service: an alliance with the Garrett Planning Network (GPN), a national organization of hourly fee-only financial planners, that offers a 20-percent discount on hourly fees to MOAA members.

All GPN members are CFPs (or will be in the near future), and many hold additional degrees, such as CPA, MBA, or JD. All offer hourly fee-only advice on an as-needed basis, abide by a strict code of ethics, and receive no commissions from product sales they recommend. Also, GPN advisors who work with MOAA members have taken special training courses to better understand issues facing active duty, National Guard and Reserve, and retired officers and their families.

Hourly fees range from $125 to $250, depending on the experience of the GPN member and the area of the country in which he or she practices (the current national average is $150 an hour), so the MOAA discount is $25 to $50 an hour. This might seem expensive to some, but consider that $25,000 invested in a mutual fund with a 4.5 percent sales load generates $1,125 in commissions.

Some GPN members also offer other services, such as tax preparation and asset management, and most have excellent networks of CPAs, estate planning attorneys, and other allied professionals to help meet MOAA members’ needs.