Family Finances: What to Consider

By Stacia Dahl, AARP Montana State Office

Rita from Lewistown e-mailed us with this question:
Last summer, my sister’s husband passed away quite unexpectedly. Her husband was always the one who handled the finances in the family and now she finds herself in the position of trying to either handle them herself or enlisting the help of a financial professional. We are at a loss of where to begin because the landscape is so complicated and confusing. What tips do you have to help us get started?

We are so sorry for your family’s loss. A lot of people go the “do it yourself” route when it comes to financial planning. There is no right or wrong way, so decide what works best for you and go for it.

Whatever route you choose, AARP has helpful online information, tips and resources for you at

If handing the reins over to a professional to help make financial and investment decisions is more up your alley, read on for some tips on how to find the right kind of financial professional to meet your
needs. We consulted with Jean C. Setzfand, Vice President of the Financial Security issues team in the Education and Outreach group at AARP, and she offered the following information:

family-financesTypes of Financial Professionals
You’ll come across dozens of designations for financial planning professionals. Be aware that some designations are no more than a series of words that sound good together. For example, some people in the field of finance put themselves out there as specialists for seniors. Many don’t have any formal
training or certification as senior specialists, so you can’t rely on the title. To look up a designation and find out its meaning, check the “Understanding Professional Designations” tool at (FINRA is the securities industry self-regulating body.)

Here are the basics about some of the “standard” financial professionals:

Investment Advisers generally provide investment advice to their clients and manage their investments.
The Securities and Exchange Commission (SEC) typically regulates investment advisers, as do state securities regulators.

Brokers traditionally buy and sell securities, such as stocks, bonds and mutual funds for their clients. The SEC and states regulate brokers, and they must be members of FINRA.

Insurance Agents can help you with your insurance needs, such as life, property and long-term care insurance. “Captive” insurance agents sell the products of only one company, while independent agents can offer products from many companies. State insurance commissions regulate insurance agents.

Certified Public Accountants (CPAs) can offer a variety of accounting services, such as tax preparation and financial planning. CPAs are licensed by the state after meeting education and experience requirements.

Financial Planners generally take a broad view of your financial affairs. The financial planning profession doesn’t have its own regulator, but planners may be regulated based on the services they offer. For example, the SEC would regulate a financial planner who is also an investment adviser.

Certified Financial Planners® (CFPs) earn this special designation by meeting educational requirements and passing a comprehensive certification exam. These professionals are held to a code of ethics that, among other things, puts their clients’ interests above their own. CFPs take a broad view of your financial situation, and are regulated based on the services they offer.

How They Get Paid
Financial professionals receive compensation in a variety of ways. Before you hire anyone, make sure you understand how that person gets paid. A financial professional may:

  • Charge a percentage of the value of the assets they manage for you (for example, 1%)
  • Charge an hourly fee for the time they spend working for you
  • Earn a commission (a fee for selling a certain product)
  • Draw a salary
  • Some combination of these

Each method has potential benefits and possible drawbacks, depending on your needs. For example,
someone who makes money solely on commissions for selling products may not have your best interests
in mind.

Finding a Financial Professional
Family and friends are a good place to start, but be sure to ask what they like about their financial professional.

Gather two or three names of financial professionals and ask for an in-person meeting.

Think about what you want out of your relationship, and be ready with a list of questions of your own.

Here’s a list of 10 questions from FINRA to take with you:

  1. What experience do you have working people who are like me?
  2. Do you have any special areas of expertise?
  3. What licenses do you hold? Are you registered with the state, SEC or FINRA? If so, in what capacity?
  4. What relevant professional designations do you hold?
  5. How long have you been with your current firm? Where did you work before?
  6. What investment products and services do you (or don’t you) recommend to your clients? Why?
  7. How much will I have to pay for your services? What is your usual hourly rate, flat fee or commission?
  8. Do you or your firm impose any minimum account balances? If so, what are they? And what happens
    if my holdings fall below the minimum?
  9. How frequently will we meet to discuss my portfolio and the progress we are making toward my investment goals?
  10. Who else in your office will handle my account?

After the interviews, compare the answers you received. Think about each professional’s approach. Did they discuss financial issues using language you could understand? Do you think they understand your situation well enough for you to entrust your personal information and your future? And most importantly, did you feel a connection? You may be working with this person for years to come, so it’s important you’re comfortable with what they have to offer – and how they offer it.

Whether you decide to manage your finances personally or hire a professional, make sure you’re
comfortable with the decision.

Do you have a question for AARP Montana? Send your question to “Ask AARP Montana” at or 30 W 14th St., Helena, MT 59601 or call our tollfree hotline at 866-295-7278. As we receive questions, we will consult with both internal and external experts to provide timely and valuable advice.