The Team You Need for Your Year-End Financial Checkup

Once you have a few candidates, ask questions. “Who is the planner’s typical client?” asks certified financial planner and chartered financial consultant Ivory Johnson, director of financial planning at Scarborough Capital Management Inc. in Annapolis, Maryland. “There’s nothing wrong with asking how they get paid, particularly in writing. Are they the subjects of any litigation or customer complaints? Read the finance section and form questions that professionals should be able to answer,” says Johnson.

Don’t simply choose someone based primarily on proximity. “Many people believe that proximity makes for a more comfortable relationship, only to discover that their process of picking an adviser was marginalized.” Another no-no: choosing whoever is cheapest, with little regard for competency. “You may pay the price in the currency of bad advice,” says Johnson.

Advisers are paid three ways: per hour, as a percent of assets under management, or commission. As a general rule, says Johnson, advisers charge from 1% to 1.5% of assets under management. To find a financial planner and for general information on financial planning, check out the websites of the National Association of Personal Financial Advisors, and the Certified Financial Planner Board of Standards.

Why You Need a CPA
A certified public accountant can help you with tax strategies. For example, should you donate to charity to lessen your tax burden? Would you benefit from increasing your 401(k) contributions for the rest of the year, or accelerating payments so that you get the credit for 2011, or deferring income to next year? A CPA might also determine that you could maximize tax benefits by matching stock losers and winners so you have no capital gains.

Meeting before the close of the year is important, too, when it comes to tax planning. Action steps taken before Dec. 31, can save you come tax time. When you’re looking for an accountant to add to your team, you want not only the CPA credential, but someone active in professional societies and who maintains continuing education requirements, and works with people in your income level and profession.

Ask how long they’ve been in business and where they worked previously. How much you will pay for a CPA’s advice depends on the scope of services you will need, but can start at $500 and go up from there, says certified public accountant Genevia Gee Fulbright, president of Fulbright & Fulbright, CPA in Durham, North Carolina. She suggests asking what the minimum fee is.

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  • Myrine

    State your visa stuats if you have a foreign sounding name?! 1:23 Are you kidding me?! That’s a crazy reason. I’d say mention that if you work history is out of country.