Financial Planning on the Side

[bongo2]

I think there are a couple people on the forum who have mentioned wanting to set up a little financial planning business in "ER." Has anyone actually pulled that off? For those of us that think about this stuff so much for free it seems like it would be fun and easy, but there has to be a catch.

 

[sgeeeee]

. . . but there has to be a catch.

Yeah . . . you have to be able to sleep at night.

 

[brewer12345]

Biggest catch I can think of is potential liability. No doubt there are ways to mitigate this, but I have not explored them yet, since it is years away for me (if ever). You would also need some letters after your name, CFP at a minimum.

 

[HFWR]

Actually, many states do not regulate this closely...

 

[samclem]

I've wondered if there's not some way to help folks get started with investing--as a volunteer, not as a paid advisor. Sort of like the program where folks learn about doing simple income taxes, then volunteer to help people do their 1040s. There are a lot of folks on this board who know MUCH more about investing sensibly than do 90% of the public. I'd feel pretty good if I could turn just a few folks on to the magic of LBYM, or help a family who is just eaking by to avoid getting ripped off and maybe start getting ahead financially.
Negatives/challenges:
-- Most folks are very resistant to financial advice (I never engage in discussions of this type with family/friends/coworkers unless I'm asked my opinion). You'd need to identify folks who are motivated or at least open-minded and who want to hear more. Identifying these people and setting up a means to meet with them, learn their situation, offer advice, help them build a plan, and do continuing follow-up as they request it would take some effort.
-- You'd be fighting an uphill battle against the considerable forces of Madison Avenue. The advertisers and society in general is convincing folks to spend every nickel they have/can borrow.
-- Potential liability issues? I think this would be reduced if you didn't take any money or get commissions for the advice/assistance, but I'm not sure.

Anyway, I think it would be a lot of fun and I'd find it much more rewarding than some other volunteering oportunities. But, I haven't taken it beyond the concept stage--any good ideas out there?

 

[ktupper]

I will most certainly be doing this. I'll keep you all posted once it is setup properly.

 

[cj]

Samclem - I am always giving people "guidance" on financial issues, but basic stuff which we all take for granted: what is a Roth and why should I have one? What is a mutual fund and how do I buy one? Why shouldn't my entire 401K be in a small cap stock fund? etc. etc. etc. I am the "go-to" person in my office for financial questions. My boss thinks I should start a foundation to provide basic investing information for people starting out who shouldn't have to pay a planner when they only have a few thousand dollars to invest. I said, it sounds like fun, but it also sounds like w@rk! I do love helping people out with the basics, though. One of our newer employees swears that before I even introduced myself, I told her to sign up for the 401K. I don't think it happened exactly that way, but it's probably not all that far off. She is thrilled about how it's grown in 6 months.

Anyway, I agree that those of us with the knowledge should find a way to help other people. But then, as you say, I also worry about the liability issues.

CJ

 

[roadkill]

Biggest catch I can think of is potential liability.  No doubt there are ways to mitigate this, but I have not explored them yet, since it is years away for me (if ever).  You would also need some letters after your name, CFP at a minimum.

Personal liability is a HUGE concern. Clearly, one can obtain professional liability insurance, however, I would not want to put a lifetime of accumulated net worth at risk for the prospect of making a couple of bucks.  I would suggest that you hook up with a planning firm and work for them. It avoids the risk as well as all the marketing, admin, etc............

 

[kaudrey]

Hi,

Doing a google search, I came up with some websites for volunteer opportunities around financial advice/planning:

If you are a CPA:
http://www.aicpa.org/financialliteracy/what_is_360.asp

If you are a CFP:
http://www.cfp.net/aboutus/opportunities.asp

If you want to help AARP members:
http://www.aarp.org/about_aarp/community_service/a2003-12-10-programs.html

You can find more, but there are opportunities out there!

 

[audreyh1]

erryl over at the morningstar forum - he hangs out at Fidelity Family - is doing this. He has been giving people free portfolio analysis for years over on the morningstar forums. Now that he has retired, he is starting to turn it into a side business.

Audrey

 

[cute fuzzy bunny]

Will a CFB work?

Sounds like it'd be a lot of fun until all your customers called you up to tell you that your plans just caused them to lose half their money and that you suck, suck, suck. And the same day you'd have lost half of YOUR money.