How I Found an Advisor

Even though I understand a lot about personal finance, I realize that I cannot plan my financial future alone. So I set out on a quest for the right advisor. And I’m glad I did. I learned vital things I did not know.

After I interviewed several possibilities, my choice was Jim Ludwick, founder of Main Street Financial Planning, which has offices in California, Maryland and New York. I sought out a planner close to my home in Manhattan that doesn’t insist on managing my money. I can do that myself, but I did want my advisor to help me with asset allocation.

The biggest question I had: Will my investments last me through retirement? While that time may be a long way off, this is an issue that haunts me.

My parents both died impoverished. My father, a misanthropic drunk, met his end from kidney and liver failure at 64 in a sleazy motel room, where he subsisted on vending machine crackers and cheap vodka. His sole income was from early-retirement Social Security, which he began drawing at 62. I supported my mother, in addition to Social Security, until she died of heart failure at 77.  She lived in a small one-bedroom apartment, bedridden with various ailments. Once upon a time, my parents had a pleasant middle-class life, then my father frittered that away, and my mother was clueless about finances.

Before my wife, Meredith, and I met with Jim in his office, he asked for a huge amount of documentation such as investment account statements, insurance contracts and real estate deeds. We had to fill out an extensive questionnaire. Complicating matters was that Meredith’s mother had just died, at 85. She was the estate’s executor, and her mother’s money had to be divided among four children. The sum was modest, but it needed to be added into Jim’s calculations.       

We had three meetings – the two of us in Jim’s office, a long phone call-cum-webinar and then a final face-to-face to go over his plan. The whole planning process only cost me around $2,700. (My company pays $1,000 of that: AdviceIQ wants all its employees to have an advisor.) From here on out, we will meet with Jim yearly to update the plan. Later revisions cost about half of the original tab since the fundamentals are established now.

The good news was that, under the most pessimistic scenario, we should have ample money to last us through our old age. Like many advisors, Jim uses what is called a Monte Carlo simulation, which crunches your numbers, adds in different inflation and market projections, then spits out the odds of several possible outcomes. Certainly, things change through the years and the future is at best an educated guess, yet it was comforting to hear we were on the right track.

Jim also delivered a model asset allocation. While he liked how we had diversified our holdings, he had more ideas about giving them an even greater range. The idea of diversification is that you want some assets that rise while others fall, useful in turbulent markets. He proposed a bigger presence in foreign securities, for instance. This makes sense: In May, according to the World Federation of Exchanges, the U.S. had just half of the planet’s market capitalization.

Plus, he urged us to get wills. I have an old one, but it is very outdated. While we have no children, there are other loved ones to provide for.

Beyond that, he had one stunning revelation: I was eligible for free government health insurance. He wasn’t talking about Medicare, which I am not old enough to receive. Turns out there’s something called Tricare, which benefits former military people.

I spent more than two decades in the Army, although only two years of it on active duty, right out of college. The rest of the time, I was a reservist, rising to the rank of lieutenant colonel. I had heard vaguely of Tricare, but assumed it was only for long-serving one-time active-duty types.

That illustrates the wonderful thing about a good financial advisor. You always learn stuff you did not know – information that can better your life. Just as every player needs a coach, every person needs a financial advisor.

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