Two seasoned certified financial planners and their staffs judged the plans the companies sent back on a number of criteria, such as appropriateness of investment recommendations, ease of use, and quality of the overall process. Diahann W. Lassus, CFP, CPA/PFS, is president and chief investment officer of Lassus Wherley, a fee-only financial-planning company in New Providence, N.J., and Bonita Springs, Fla., and past chair of the National Association of Personal Financial Advisors. David Yeske, CFP, is managing director of Yeske Buie, a fee-only planning firm in San Francisco and Vienna, Va., past chairman of the Financial Planning Association, and distinguished adjunct professor at Golden Gate University, focusing on financial and insurance planning.
Our judges also commented on several plans obtained in the field test, some of which were from the four companies. (We sent the plans masked of identifiers to reduce judges' bias.)
In the field, our test subjects learned that advice doesn't always come easy. Those without a significant amount of assets, or the right kinds of assets, were sometimes rebuffed. Katerina, 33, who wished to roll over a five-figure Merrill 401(k) to a Merrill IRA, found that by law she couldn't get advice until she moved that money. When a tester with a Citibank account asked an adviser for free advice without committing to moving additional money to Citi, the rep told her, "Why would I do that?" (The rep later provided advice after the tester showed her financial statement.)
At Fidelity, clients with an account of any size can in theory walk into an office or call an 800 number for a free consultation and guided tour through Fidelity's planning software. (Fidelity says the software its advisers use is essentially the same as what you'll find on its website.) But unless your investable assets are worth at least $250,000, you're not guaranteed a dedicated Fidelity adviser. "I would be assigned to a strategy adviser group of 75 to 85 people, not to any one adviser," Carolee, a midcareer staff member, said after a phone consultation with Fidelity. For that group service, she was told she'd be charged about 1.13 percent of her account per year.
Once in the door, our subjects faced subtle and strong sales pitches. "He sent me pretty quickly to his recommendation: a balanced, managed set of funds without reviewing or comparing the other options," said David, our "empty-nester," after a first visit to a suburban Chase office in Seattle.
The company representatives had titles such as "account executive," "financial adviser," "financial consultant," "financial planning specialist," and "investment adviser." Just three of the nine advisers consulted by the test participants seemed to hold a certified-financial-planner designation. And the advisers didn't initially mention or were often vague about how they'd be compensated, with one exception: a Citi adviser who said she was "salary based."