The Gift of Financial Education for the New Grad in Your Life

Mr. Mahoney said that a lot of people had never been asked about what they found most stressful about their finances, and that giving them the space to consider that could yield a better plan. For example, their student loans may make them nervous because they grew up in a household with a lot of debt, which can influence an adviser’s recommendations.

And empathy about those feelings can draw out an otherwise reticent young person. “You can see it on people’s faces — they just start going,” Mr. Mahoney said.

He also echoed Ms. Guglielmetti’s point that what appears ideal on the spreadsheet isn’t always the most important thing. “For some people, the thought of repaying debt for 20 or 25 years — even if the math says that is the optimal decision — feels debilitating,” he said. “If that strategy makes them less optimistic or confident about managing their money, they may not make much financial progress over the long term and likely need to take a different approach, no matter what the math says.”

Fees and Fiduciaries

A younger adult is unlikely to need more than one or two meetings — perhaps one in depth, and one shorter. You can expect to pay anywhere from $200 to $450 an hour, or perhaps a flat $500 for a package. And if you’re a new graduate looking for advice on your own, don’t be shy about asking for a payment plan — or paying in a couple of installments, experts said.

The XY Planning Network, the Garrett Planning Network and the National Association of Personal Financial Advisors are membership organizations that include hundreds of certified financial planners who charge fees for their time and services but do not earn money or commissions on products sold, which helps minimize conflicts of interest. More specifically, you can find planners who charge by the hour or by the project — in other words, you can pay them one flat fee, whereas more traditional planners require an asset minimum and charge a percentage of those assets.

The groups’ planners also work as fiduciaries, which means they are required to put their clients’ interests first. If an adviser does not promise to act as a fiduciary, find another who will.

Article source: https://www.nytimes.com/2021/07/09/your-money/financial-advisers-new-grads.html