Learn About Financial Planners

MoneyWatch editor-at-large Jill Schlesinger hits the streets to give free financial advice to passersby. Question of the day: How much do you know about your financial planner?

Jill Schlesinger: You seemed very comfortable. You seemed all relaxed. Female: I just came from the body for the works. Jill Schlesinger: Will you spend 30 seconds with me? No. Busy. No one lets. Free financial advice. Jodie: It depends. Jill Schlesinger: Why, you want to know the topic? It is an easy topic. Jodie: What is the topic? Jill Schlesinger: Money. Jodie: Ooh! Jill Schlesinger: Do you like that? I am Jill. Are you working now? Jodie: Yes. Jill Schlesinger: Do you use the retirement plan at work? Jodie: Yes. Jill Schlesinger: Oh, that is cool. That is great. Jodie: I have a 401(k) and I have a financial planner. Jill Schlesinger: Oh really? How do you pay your financial planner? Jodie: What do you mean, how do I pay him? Jill Schlesinger: Well, this is a good ques--you are going to get good advice right now, I promise you, okay. Jodie: Okay. Jill Schlesinger: So, do you know how your financial planner gets paid? Jodie: Yes, he gets a percentage of what I make. Jill Schlesinger: Of what you make, I bet it is not. I bet it is a percentage of what you manage. Jodie: Well, yes. Jill Schlesinger: Right? Jodie: Yes. Jill Schlesinger: Okay, do you know what percent it is? Jodie: I think it is 1-percent. Jill Schlesinger: That seems reasonable to me. Jodie: Yes. Jill Schlesinger: And do you feel comfortable that the guy knows what he is doing? Jodie: Yes, he is excellent. Jill Schlesinger: Okay, so I am going to give you one piece of great financial advice. Jodie: Okay. Jill Schlesinger: You are going to manage your planner better next year. Jodie: Okay. Jill Schlesinger: And here is what you are going to do. You are going to go to him and you are going to say, craziest thing happened. I met this girl at Columbus Circle and I was talking to her and she wanted me to ask you a question. Here is the question, are you are a fiduciary. Do you like that? Jodie: Fiduciary, yeah. Jill Schlesinger: It is not a crazy word. Jodie: Yeah. Jill Schlesinger: I call it the F word. Jodie: Okay. Jill Schlesinger: So, here is what it means. It means you are going to find out from him whether he is legally obligated to put your needs before his needs. That is what it means. Jodie: Okay. I will ask him. Jill Schlesinger: And if he doesn't say, if he says, no I am not, it is not like a terrible thing, but it is a good thing to ask. Jodie: Okay. Jill Schlesinger: Ready, let's practice. Jodie: Are you a fiduciary? Jill Schlesinger: I was, I no longer in that business. Jodie, thank you so much. Jodie: You are welcome. Jill Schlesinger: Take care, thank you.