December 9, 2003

Maybe it's after you walked down the aisle and got married. Or when you bought your first house. Or when you were sitting at birthing classes in expectation of your first child. Maybe it was when you saw your stocks start plummeting. Or maybe it's only April 14 of each year when you start thinking about taxes. But at some point --'usually some life-changing point -- you may want an expert's opinion on your financial situation.
For Jay Ketel, BA '89, and his wife, Debbie Moses Ketel, BA '91, MA '92, it was just after the birth of their first child, Justin, in 1998. Ketel is a business valuation analyst for a public accounting and consulting firm in Rapid City, S.D. For him, financial advice was just a few offices down the hall. "My son was getting cash gifts from his grandparents to use for college," Ketel says. "I wanted to start a 529 [college savings plan], but there are too many to choose from."
A colleague of his is a financial planner who had a child the same age and had already done the research on 529 plans. "I figured he's not going to put his own money into an underperforming plan, so I enrolled in the same plan," Ketel says.
Getting good advice usually isn't that convenient for most of us, but almost everyone needs a financial planner, according to Tom Potts, professor of finance and director of the Financial Services and Planning Program at Baylor's Hankamer School of Business. "Sometimes people have a misunderstanding of how much money they need before they get a financial planner," he says. "But financial planners help articulate goals and objectives and help you reach them. Sometimes people with limited resources need that as much as anyone. Obviously the earlier you start planning your finances, the better off you'll be."
Choosing a financial planner can be tricky (see sidebar). The term is generic and can include a range of expertise. Certified Financial Planners have successfully completed rigorous courses and exams to earn that title, so they are a good place to start, Potts says.
Something else to consider is how financial planners are reimbursed. Most work off of commissions while you pay some sort of fee. Others work strictly on commissions and a minority are completely fee-based. Those working on commissions may be limited in the products they can recommend. "If you're comfortable with that and feel like that's the way they make their living, that's fine," Potts says. "There is just more room for potential conflict."
Financial planners take your dreams and goals, put them down on paper and crunch the numbers, he says. For example, if you want to retire when you're 65 and still have an income of $100,000 a year, this is what you need to do between now and then. Are you on track? Is your plan realistic? If not, what can you change?
"A good financial planner is helpful because they have access to a lot of research and trend data that most people don't see or may not understand," Ketel says. "Who has time to sift through information on 50 different 529 plans? I don't."

McMullan, BA '88, received her degree in journalism and political science. A former editor of the Lariat, she has written for Texas Monthly, Southern Living, The Dallas Morning News and is a contributing editor for D Magazine.