How to Help Your Parents Through the Crisis, Part 3

EDITOR’S NOTE: With their retirement savings crushed by the 2008 market crash, millions of older adults are turning to their children for help. SmartMoney Senior Editor Beverly Goodman is one of those children, and she recently embarked on this special report for SmartMoney.com and the February issue of SmartMoney magazine. Here’s her story of providing financial advice to her mother – a logistical and emotional minefield that’s challenging even for a veteran financial journalist.

PREVIOUSLY:
Part 1, Goodman and her mother confronted the news
Part 2, Unhappy with a financial planner
Today: Too much information from a relative youngster.

See all of these stories in Special Report: Parents in Crisis

Psychologists point out that people’s relationship to money can be fraught with emotion, and that having an adviser tell you to buy this and sell that won’t address a client’s entire financial life. That’s one reason that my mother Vida and I recently found ourselves comparison-shopping among financial advisers. And it helps explain why my mother and I were less than impressed with Joe, an adviser at Fidelity Investments.

A cheery and knowledgeable guy, Joe is 33 (he mentioned this twice early in our conversation, perhaps to reassure us he wasn’t any younger) and a fast talker. Youthful advisers are pretty typical these days; last year one in five aspiring certified financial planners was in his 20s, up 21 percent in four years. Younger people are sitting for the certified financial planner exam at such a high rate, the average age of a new CFP actually fell in 2007, for the first time in at least a decade. Many of them earn their chops alongside more seasoned professionals at big firms.

Ameriprise is big, but Fidelity is huge. The firm pulled in $15 billion in revenue in 2007, providing investment products and services to 23 million clients. Through both individual and institutional—read: 401(k)—accounts, the firm manages more than $1.4 trillion in assets. Its financial-planning advice, however, is separate from its investment advice.

When we met with Joe, he rattled off an overview of Fidelity’s philosophy (which can be boiled down to: planning is good) and a comprehensive list of services the firm offers. He then amiably rattled it all off a second and third time when my mother requested clarification. When we finally got down to discussing her finances more than 40 minutes into the session, Joe put her through a substantial questionnaire designed to assess her goals. He offered some thoughts on her situation—too much in equities, primarily—but didn’t make any specific recommendations. He also offered to move my mother’s Ameriprise assets into a Fidelity account right then. We declined.

In the end, we were told we would get a full plan in the mail. “Full” was an understatement—it arrived five days later with a thud, tipping the scales at 8.2 pounds. My mother, who by now surely has me on speed-dial if she didn’t before, calls: “What am I supposed to do with all this?” The size of the package isn’t the only problem. Unless my mother is willing to pay for a plan Fidelity would manage, she’s told her best option is its free “portfolio review.” That document, I notice, is made up entirely of Fidelity funds. It’s hard to believe that’s the best option: 36 percent of Fidelity’s stock and bond funds were in the bottom quartile of their categories last year, and most planners discourage clients from putting all their money in one fund family. Apparently, even Fidelity agrees: A spokesperson says we were given the wrong information and that the firm’s usual default option is to offer a free “blended” portfolio suggestion.

NEXT: Finding reassurance—finally.

Our special report continues all this week as Goodman recounts the process of getting her mother back on track. Following that, she will chronicle her ongoing experiences in an online diary. ALSO READ: Parents in Crisis: Finding the Right Adviser.