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Boroson on Money: Eight hourly, fee-only planners in N.J.

moneylogo_optBY WARREN BOROSON
NEWJERSEYNEWSROOM.COM

For sheer wackiness, there's little to compare with the average person's investment portfolio. I've been examining such portfolios for years, and believe me, most of them are absolute horrors.

What I encounter, mainly, are "messy portfolios." This, that, and the other thing. Stocks people bought years ago, which they should have sold years ago; mutual funds that are, at best, mediocre; funds that duplicate one another.

Losers, losers, and more losers – because people are crazily averse to selling their losers. They'll blithely sell their winners, though. As Peter Lynch said, investors are accustomed to cutting down their flowers and watering their weeds.

What's wrong with a messy portfolio? Let me count the ways.
  • It's hard to figure out how well you're doing compared with the stock market. You're comparing apples with tutti-frutti.
  • At tax time, your tax preparer really earns his or her keep.
  • Simply because your portfolio is messy is evidence that it's not nicely diversified – and diversification can keep part of your portfolio intact even during hard times.

I met an elderly woman with an $800,000 portfolio consisting of 90 different securities, both stocks and mutual funds. She had several overlapping index funds and a lot of utter garbage.

Then there was the physician's gigantic portfolio that consisted almost entirely of one stock, International Chi-Chi, a chain of restaurants. A student of mine at The New School owned just two mutual funds: a gold fund and an energy fund.

My recommendation: Hire someone to look over your portfolio – someone to check how well diversified it is.

Do you own value stocks/funds (dark horses) as well as growth stocks/funds (the favorites)? Big companies as well as small? Foreign stocks as well as domestic? A variety of bonds – with different maturities and different average credit ratings? And are you stubbornly holding onto losers? Those in taxable accounts can provide you with a delicious tax deduction.

For a circumscribed task like this, consider hiring an hourly, fee-only financial planner. It will cost less. Many hourly planners belong to the Sheryl Garrett Network – she pioneered the idea. But many general planners will also agree to work on an hourly basis.

Sheri Iannetta Cupo, CFP, of SAGE Advisory Group in Morristown isn't part of the network, but she'll work by the hour.

"I feel I can do a better job of planning if I actively partner with my clients year-round," she says. "But I recognize that ‘hourly as needed' can be a good option for my clients with more simple planning needs."

Gwengepfert_optGwen Gepfert, CFP, CPA, of Basking Ridge, a member of the network, reports that perhaps 40% of her hourly clients want a second opinion on their portfolios. These people tend to be busy with their careers, and buy whatever has been hot lately – typically stuff recently recommended by Money, Kiplinger's, Motley Fool, and so forth.

Some own as many as 50 different funds; some don't even understand that a "balanced" fund doesn't consist entirely of bonds but has a sizable exposure to stocks. She'll subject their portfolios to an X-ray, via a Morningstar program called Principia, to acquaint them with exactly what they own.

After checking into her clients' risk tolerance, she will then recommend index funds, either traditional open-end mutual funds or exchange-traded funds, and she mentions how economical the Vanguard index funds are. (Excellent advice.)

Still, "There's no typical hourly client," she says. She sees a lot of young couples, wondering about buying a house, having children, how much to save. And folks in their 50s and 60s worrying about their job security, whether they are saving enough, where to retire. Also, divorcees.

Hourly planners in New Jersey may charge $150 to $300 an hour, but $180 is probably typical.

Here are, at last report, the eight hourly, fee-only planners in New Jersey in the Garrett Planning Network:

  1. George E. Dedecker, CFP, 908-561-4333, Warren
  2. James S. Gallo, 908-464-2011, New Providence
  3. Gwen Gepfert, CFP, CPA, MBA, 908-580-0255, Basking Ridge
  4. Dylan L. Ross, CFP, 609-945-1977, East Windsor
  5. Pei-Yung Song, MBA, CFP, 908-399-8579, Califon
  6. Roger Streit, CFP, 800-840-0718, Roseland
  7. Donald F. Webb, MBA, 856-428-2181, Haddonfield
  8. Richard A. Weimart, CFP, MBA, 201-476-0251, Montvale

Boroson on Money appears every Monday at Newjerseynewsroom.com.

Warren Boroson has written more than 20 books. Articles of his have appeared in The New York Times Magazine, Reader's Digest, TV Guide, Consumer Reports, and elsewhere. You can write to him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . He says that he is so old that he once did a phone interview with President Warren G. Harding's girlfriend, Nan Britton.

 

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