The Best Financial Planners in Dallas

HOW WE DID IT: To compile our list of the top financial planners, we asked every CFP in the Dallas-Fort Worth chapter of the Financial Planners Association to cast an online ballot. Outside-firm votes counted more than inside-firm votes. Self-nominations were tossed out. A panel of esteemed local financial planners reviewed the final list.

Make Your Money Work
3 families share their new plans for the future.

Too many people wait until their 40s to focus on their financial health. They’ve already started families and settled into their careers. And they’ve already missed out on years of compound interest.

So the first step is to get started early. The second step is to avoid the temptation to invest it yourself. Whether your portfolio is large or small, it should be in the hands of a trained professional. You wouldn’t perform surgery on yourself. So why would you take the same risk with your children’s college educations or your retirement years?

Here are three case studies. These people all recently sought the counsel of financial planners to assess their goals and save accordingly. Their names have been changed, but their stories are real.

Wealth and Faith

Nancy
A nonprofit consultant, divorced, 54

Net worth
Based on her proceeds from a multimillion-dollar buyout of a family-owned corporation

Income
$100,000, including salary and investments

Amount saved/invested
Living off salary, invested proceeds from the family business

Goals
Her first is giving to charity. She tithes 10 percent of her income and feels that should apply to the windfall from the sale of her family’s business. She would like the freedom to not work if she didn’t want to or couldn’t, and she would like to retire at age 65, living on 90 to 140 percent of her current income.

To look at Nancy and her lifestyle, you wouldn’t know she has money. And she likes it that way. Nancy was raised in a middle- to upper-class home and didn’t want for anything. Financially, she is conservative and taught her children at young ages how to handle money. The kids received $1 a week for every school grade and divided it up in a very adult way: 10 percent went to savings that was kept for at least six months; 10 percent went to the church; 10 percent went into a college account; 20 percent went to taxes (actually, a savings account); and 50 percent was for discretionary spending.

Her conservative ways have paid off. The house is paid for. The car is paid for. She has no debt. The youngest of her four children will finish college soon, and all four are on their own financially.

Nancy, who lives in North Dallas, came to David McBee, a Certified Trust Financial Advisor (CTFA) with Mikesa Peschel McBee  Group of Wachovia Securities, a few months before the family business sold. At that point, she owned stock in the family company and had a mutual fund portfolio, which she managed herself. She needed to manage her goals, which is where McBee started. He put flash cards on the table in front of her: “dreams/major purchases,” “retirement income,” “estate,” “retirement age,” “education goals,” “savings,” “risk tolerance.” An easy exercise of prioritizing the cards had them both on the same page.

“There are things you control in your life, and there are things you don’t,” McBee says. “You are in control of the day you pull the plug to retire. You do not control the stock market. You do not control terrorism. Focus on what you can control and work that side of your plan.”

Because giving to charity was Nancy’s first priority, they started there. “I truly believe the Bible says your first fruits are what you should give,” she says. “I always tithe 10 percent to my church.”

She had planned to give the 10 percent right off the top of her earnings from the sale of the business. Instead, McBee showed her that if she gave one-tenth of that 10 percent now, then continued to give similar amounts over the next several years, she would have more to give—and more to keep. Cash flow is the most important facet of an investment plan. And one many people don’t understand, McBee says.

Their revised plan is that she donates almost 2 percent a year to charity for the next five years, maybe more. This amount doesn’t really affect her portfolio, whereas taking 10 percent off the top would have. “That gift probably could go on indefinitely,” McBee says.

Her plan will change based on things in her life that might change. She might want to travel, remarry, buy a summer home. Her entire financial life and goals are laid out yet remain flexible.

“The math makes sense to me,” Nancy says. “I feel very comfortable with it all.”

Childless and in Charge

Misha & Aidan
A couple in their mid-40s, no children. She’s a partner in a law firm; he’s a consultant.

Net worth
$1.2 million

Income
$750,000

Amount saved/invested
Started with $500,000, now saving about 40 percent of post-tax income

Goals
Misha would like to stop working 80 hours a week sooner rather than later. She is the primary breadwinner while Aidan establishes his career. In 10 years, she would like to have a lower-paying, less stressful job.

Aidan was raised in a family on a tight budget, learning early to do what you can with what you have financially. He helped pay for his college years and finally bought a $400 car his senior year. Misha is an only child who went to private school and belonged to a country club growing up. Her parents paid for her to go to college, and she had a maid in law school.

The Dallas couple, self-described homebodies, has been married for eight years. Although they come from diVerent financial backgrounds, their basic ideas about money are similar. They came to Jimmy Kull, a Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA), and laid out their plans.

“What I ask is, ‘What do we need to do in the next 10 years or so to be financially independent?’” Kull says. “The key issue was cash flow—understanding where the money was going. The first step was to track that. In an ideal world, all of my clients would be as anal as I am and be Quicken devotees. But most people are too busy.”

Kull took a look at their finances, projecting their 10-year plan. The couple would like to have to earn only $200,000 a year once Misha quits the law firm; 10 years after that, she’d like to be making no more than $50,000. In the meantime, Aidan will continue to work, probably increasing his earning potential.

“We had to figure out what their delta was,” Kull explains. “If they did nothing, would they be financially independent in 10 years? The answer was no.”

The good news is that with Misha’s salary, her plan of downsizing her career is doable. The couple just has to make different lifestyle decisions and look at money differently. They’re not exactly on a tight budget—they spend about $75,000 a year on things like their housekeeper, chiropractor, and pool maintenance—but they are being more thoughtful about their expenditures. Her large salary increases over the past few years have eased the transition.

Kull makes it easy by just taking the money out of their accounts and putting it where it needs to be. “We figured out what we need to save, and I take it out so their lifestyle doesn’t creep up on them,” he says.

Their only debt is their house. They refinanced their mortgage to get a better rate and have now doubled up on payments, so the home will be paid off right at their 10-year mark. In addition to changing their spending habits, they are investing aggressively, which both are comfortable with at this point.

At this rate, it’s possible Misha could even end her law career sooner than planned. “I don’t feel like it’s been a huge change,” she says. “I used to get new cars; now I get pre-owned. Before, I might be on a trip for business, and he’d fly up to meet me. Now, I think, ‘Love you, but I don’t want to spend $1,000 to have dinner with you.’”

Playing Catch-up

Bob & Susie
Parents in their mid- to late 40s. He’s a psychiatrist; she’s a homemaker.

Net Worth
$487,352

Income
$290,000

Amount saved/invested
Saving $3,000 a month ($2,500 for retirement and $500 for their children’s college fund)

Goals
They would like to pay for their daughters’ college educations in cash and leave them a sizeable inheritance. In addition, Bob would like to retire at 65 and have enough saved to live on $120,000 a year. And they’d like to do all this without drastically curtailing their travel.

Bob and Susie have run the gamut of low and high incomes during their marriage. Generally conservative with money (their only real weakness is travel), the two thought they were doing pretty well, saving and investing what they could after they started a family. But their first plan lacked guidance and focus, costing them precious time (and compound interest).

They switched gears and came to Helen Wathen, a Certified Financial Planner (CFP) and Certified Investment Management Analyst (CIMA), a few years ago. She describes herself as the “velvet hammer.” “I’m no-nonsense,” she says. “I show them how to get where they need to go as gently as possible. As soon as we have a picture, we go about creating that.”

The couple married in the late ’80s. Early on, Susie supported them with her career in the airline industry while Bob finished his residency in psychiatry at UT Southwestern. In those days, travel was cheap because of Susie’s work benefits.

In their mid-30s, they started a family, and Susie stopped working. They struggled on Bob’s residency salary and any cash he could bring in moonlighting until he graduated, taking a full-time job that paid $75,000. Two years later, he went into private practice.

With his annual salary now at $290,000, they have much more financial leeway to think about the future. Working with Wathen, they spent a few months whipping their financial plan into shape. They paid off their debt (mostly business debt from Bob’s starting his own practice) and saved at the same time, allowing them to see the benefit of their work. They refinanced their home, lowering their interest rate from 6.5 percent to 4.5 percent with a 15-year payoff.

Before, Bob’s theory on money was that you paid your bills, you put some in savings, and the rest was yours to spend. Now he realizes some of that spending cash could be better used elsewhere. Even though travel is a huge priority for the family, they’re trying to be more realistic. They decided an expensive trip they planned for this year might be a bit too extravagant. They’ll probably take a trip somewhere, just one that doesn’t cost so much.

When they came to Wathen, their net worth was $186,784. It’s now $487,352. The difference was two-fold: a more focused approach to planning their financial future and better investments. “They’ve increased their net worth by 161 percent and their investment return by 63 percent since coming here,” Wathen says. “The market itself doesn’t make you rich. It’s the combination.”

If Bob and Susie had made these plans and changes in their 20s and 30s, they would have no worries. Starting in their 40s makes reaching their goals a little more difficult. They need to save $50,000 a year, which isn’t happening yet. If things go along as is, they’ll have about $70,000 a year for retirement instead of $120,000.

Wathen, though, isn’t worried about their potential shortfall. In all her years in this business, she’s always seen things work out. “Somehow,” she says, “it all falls together when you have a plan.”

Questions to Ask:
» Are you a Certified Financial Planner? You can check this at the CFP Board’s web site, www.cfp-board.org, although it isn’t always up to date.

» If so (or even if not), what are your other professional designations?

» Do you work independently or for a firm? If the latter, with whom will I be dealing?

» How do you get paid? (See “How Financial Planners Get Paid.”)

» How many years have you been doing this? More than five years would a good answer.

» What kind of clients do you work with? Does that client base sound like you and your situation?

» Are you involved in local industry-related associations?

» What is your philosophy regarding financial planning? Is that philosophy the same as yours?

» How do you stay current with all the changing laws and trends?

» Do you refer to other specialists inside and outside your company?

» What does a financial plan from your firm look like? Ask to see a copy.

» Have you ever been sued or disciplined by a trade board?

» Also ask for educational background, experience, and references.

How Financial Planners Get Paid:
Most experts agree that when a financial planner earns money off the specific products he or she sells, that isn’t the best scenario. Trust your gut instinct, but at least be knowledgeable about the payment options.

Assets under management: The financial planner gets a percentage of what he is managing, which aligns his interests with yours. The percentage varies, usually between 1 and 2 percent. You should feel comfortable negotiating it.

Fee-based: The planner has a hybrid pricing structure. Some things (like creating a plan) might be charged by flat fee or hourly. Some are based on assets under management. Some (sale of an insurance policy) may be earned from commission. Ask for specifics.

Fee-only: An hourly rate like a CPA or an attorney. This is a fairly rare niche. (Go to www.napfa.org for more information.)

Straight salary with benefits: Rare for experienced financial planners.

Straight commission: Costs you no money but puts into question whether an investment is truly the best for you or simply offers the best commission. Also fairly rare.

Alphabet Soup:
The financial planning industry is filled with some confusing titles and acronyms. But a “financial advisor” is to a Certified Financial Planner (CFP) what “tax advisor” is to a Certified Public Accountant (CPA). The former could be your uncle with the cool software; the latter is someone with serious training and years of experience in the industry. CFP is the preferred primary designation. A CFP must take a certain number of hours of coursework, commit to continuing education, and pass a rigorous exam that takes 10 hours over two days. And the designation can be taken away. In addition to CFP, though, here are other designations that make good additions:

CLU (Chartered Life Underwriter): The highest credential in the insurance industry.

ChFC (Chartered Financial Consultant): Financial planning designation that is not quite as intense as the CFP. Although the education is almost identical, the CFP exam is far more intense. The ChFC is basically the insurance industry’s attempt to broaden into other specialties.

CFA (Chartered Financial Analyst): The educational designation focuses on the investment side of financial planning.

CIMA (Certified Investment Management Analyst): Also known as the CIMC (Certified Investment Management Consultant), the CIMA is the junior to the CFA—similar investment material; not as intense.

CTFA (Certified Trust Financial Advisor): Advisors that develop estate planning strategies, manage trust funds and large inheritance assets, and work closely with tax attorneys.

Asset Managers: While not a professional designation, asset managers generally manage your assets without getting into the complications of true financial planning.

Industry Experts: Banks, accounting firms, insurance companies, and brokerage firms all have their hand in financial planning. While their main areas of expertise would be in their chosen industries, many are trying to broaden into true financial planning.