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Financial Advisors -- you got one??


Dottleshead

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2 minutes ago, Dottles said:

Do you like him/her more because he/she makes you money or hasn't lost you money?  Both?  Peace of mind?  Piece of mind?

We like her because she is down to earth and not trying to get rich quick. 

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Don't have one. Used a financial planner just recently to do some number crunching for future general planning and I could ask more complex tax questions since  he has a  CPA also.

Best of luck, Dottles. You strike me as someone who might use someone for awhile, then go off to DIY,

I know a couple who uses one but they have invested in mutual funds which annual management fees are more. Not sure what else since I now realize, why are they using this  guy if  portfolio is heavily in mutual funds? This couple doesn't want to do their learning/reading and they suspect the fees might surprise them. However they are content at 10% annual earnings so far. 

I got out of mutual funds about 5 yrs. ago and slowly switched to some ETFs. No financial advisor..just a sis who told me over a decade to consider them. 

 

 

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No we don't have one. But we probably should have one.  When I worked I was very aggressive in our 401k investment options,  Now I'm way too conservative. 

We are going to a lawyer/estate planner soon. We don't want the government to get our money when we exit the world.

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34 minutes ago, Bikeguy said:

No we don't have one. But we probably should have one.  When I worked I was very aggressive in our 401k investment options,  Now I'm way too conservative. 

We are going to a lawyer/estate planner soon. We don't want the government to get our money when we exit the world.

A lawyer that specializes specifically in probate and estate law. Do some reading in state law requirements and  have some specific questions lined up. Sometimes one can tell by their expertise on website, if they offer up front basic legal information.  Your state court or govn't justice dept. web site, should have introductory info. that pertains to your state on probate and estate law.

A  lawyer that believes in some open service...will offer such free information on their site, which in fact exists in legislation and on some court / govn't websites but lay public sometimes can't figure out which information source to rely on or even how to go about researching it properly on the 'Net. So law firm site will repkg. info. to be better understood.

 

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22 minutes ago, Kirby said:

I have used one for a set project on an hourly fee basis.  They did a portfolio review and some retirement planning.  It's not easy to find someone who charges hourly rather than as a percentage of assets under management.

Generally I think most people are fine with a very simple investment plan and they can handle their assets on their own with a little reading.  However, a financial advisor could be useful to someone who really isn't familiar with investing at all and has no interest in learning.  But there are a number of things to be careful about if you pick one.  Some advisors not only charge a percentage of the assets they manage (usually 1%) they may invest in funds with a load that results in more fees to them.  But some also invest in proprietary funds which can't be transferred to a third party broker like Fidelity or Schwab.  In those cases, people may end up stuck at their advisors because they don't want a tax hit for selling the funds (if the investments aren't in IRA's)  or the funds have a large :"exit fee" if you try to sell them.   Some advisors also invest in needlessly complicated portfolios that are intended to show what value they are providing (and to show that it's too complicated for you to do it on your own).

I do think advisors can add value in certain circumstances, but you have to be very clear on what services they are providing and be alert to any fees (direct or indirect) that you'd pay.  

 

 

Mine does not sell investments.  So focused primarily on retirement planning and I'm sure if I had major debt problems, it would have covered that too. It was 1 set fee.  I don't plan to use such services annually. But it may be of value ie. decade or 15 yrs. later.

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10 minutes ago, shootingstar said:

Mine does not sell investments.  So focused primarily on retirement planning. It was 1 set fee.  I don't plan to use such services annually. But it may be of value ie. decade or 15 yrs. later.

Exactly, I hired one for a one time project to do retirement planning , cash projections, and an investment review.  They didn't tell me much new, but it was reassuring to confirm I wasn't missing something big.

Also, one other general tip, a lot of different people can call themselves a financial planner or financial advisor.   Some are effectively insurance salesmen or annuity providers who recommend products with expensive fees that are often disguised and built in to the price of the product.  If you want an advisor you want to look for someone who is a fiduciary and "fee only" (not fee based, which means they can also get commissions).

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Ahhh, no. I am perhaps their worst nightmare.

As a former stockbroker with Charles Schwab (and Merrill Lynch earlier), kind of a unique experience. Part of Schwab's employee assessment was the corporate goal of continuing personal development. Problem was, I was, in addition to my normal duties, the guy that lead training programs for the other employees and some of my work was developed into training manuals. The problem is I had the same personal development requirements. As a result, Schwab paid for my MBA, and after I completed that, began working on Certified Financial Planner. I completed 6 training modules plus studying the manual and ready to send in the $500 to sit for a very gruesome exam with a low pass rate. They also had one unique requirement to keep good test takers from walking in off the street and the applicaion had to include a letter from your supervisor that actually doing financial planning. The problem was, a week or so prior...I was laid off and had no supervisor (or job for that matter) plus my former supervisor couldn't rationalize completing the letter.

It is like a lawyer who doesn't sit (or pass) the Bar, they still have a law degree, but can't practice before the courts. I have the knowledge but can't claim to be a financial advisor and obviously don't provide services for pay. In addition to myself, I do provide guidance and support for family. Worst nightmare - I read through them. Mom's IRA, stock broker first mistake was thinking 90 y/o = income portfolio and wanted to invest "commission free" in a convoluted fund with all sorts of hedge counters, blah, blah, blah. Anticipated return 2.5% and the privilege's of paying around $950/yr to the stockbroker (the gift that keeps on giving) for doing that. I took over management (LPOA) of the IRA investing in a program related to the Utility Index (5 of the 15 stocks that make up the Index). Average dividend was 4.2% and total gain for the year 19.7% and even after her 9.7% Required Minimum Distribution, it has continued to grow this year. 

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56 minutes ago, Tizeye said:

It is like a lawyer who doesn't sit (or pass) the Bar, they still have a law degree, but can't practice before the courts. I have the knowledge but can't claim to be a financial advisor and obviously don't provide services for pay. In addition to myself, I do provide guidance and support for family. Worst nightmare - I read through them. Mom's IRA, stock broker first mistake was thinking 90 y/o = income portfolio and wanted to invest "commission free" in a convoluted fund with all sorts of hedge counters, blah, blah, blah. Anticipated return 2.5% and the privilege's of paying around $950/yr to the stockbroker (the gift that keeps on giving) for doing that. I took over management (LPOA) of the IRA investing in a program related to the Utility Index (5 of the 15 stocks that make up the Index). Average dividend was 4.2% and total gain for the year 19.7% and even after her 9.7% Required Minimum Distribution, it has continued to grow this year. 

Family members who have a professional skill/knowledge may get lightly hassled by their loved ones..for "free advice". A brother-in-law was a securities lawyer with Ontario Securities Commission, 1 of the major regulatory Canadian  bodies that screen IPOs for TSX listing, other investment vehicles offered by financial institutions.  I suspect his knowledge is more on the law itself instead of investment strategies in great detail.

There is a distant younger relative who is a CPA ...because I discovered she and I were working for the same firm, PricewaterhouseCoopers and same location, but in totally different roles. However we don't know her much.  Because I've worked for global and national firms in accounting, law....I know to ..avoid them and high fees. The trick to hopefully find competent tiny firms.

Great you can help your mother. 

 

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4 hours ago, Kirby said:

Exactly, I hired one for a one time project to do retirement planning , cash projections, and an investment review.  They didn't tell me much new, but it was reassuring to confirm I wasn't missing something big.

Also, one other general tip, a lot of different people can call themselves a financial planner or financial advisor.   Some are effectively insurance salesmen or annuity providers who recommend products with expensive fees that are often disguised and built in to the price of the product.  If you want an advisor you want to look for someone who is a fiduciary and "fee only" (not fee based, which means they can also get commissions).

Thank you.  The guy we just met with matches this criteria.  I'm going to send you a PM and you tell me what you think -- please!!

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I didn't mention it before but I happen to be a financial advisor. Always have been. I can help you and my fees are quite modest. I do insist on a significant retainer, however. It's a tool. We don't want a lot of poor people muddying the waters while we make a fortune for you.

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21 minutes ago, donkpow said:

I didn't mention it before but I happen to be a financial advisor. Always have been. I can help you and my fees are quite modest. I do insist on a significant retainer, however. It's a tool. We don't want a lot of poor people muddying the waters while we make a fortune for you.

Wo46 and I already have a financial planner but thank you for your time. 

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The lady that we go through had very modest prices and was down to earth and that's what I liked. 

A good friend of mine wanted me to switch over to his guy because I could make a lot more money......also loose a lot of money. This guy wanted us to switch to him so bad that he gave us box seats to baseball games and everything. 

I didn't like how aggressive he was on trying to win us over and some of the risks he took with other people's money. 

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24 minutes ago, Dottles said:

Your PM is the only one I got!

And so relevant since it's Canadian. :lol: Rather interesting, the guy I got, is 10 yrs. into his career. I noticed his firm partners were well, just a few yrs. older than I.  I read their bios which annoyed me...it sounded old school and not as professional in background. (Coming from PwC and working for lawyers and also knowing how to do legal research, I guess I look at certain key experiences). 

Not surprisingly in 2 months, he told me he was taking over the firm, starting next yr. He did tell me something not major, which I didn't know but helpful for near future and would have been buried in legislation. But he would have to know as a CPA.

 

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3 minutes ago, shootingstar said:

And so relevant since it's Canadian. :lol: Rather interesting, the guy I got, is 10 yrs. into his career. I noticed his firm partners were well, just a few yrs. older than I.  I read their bios which annoyed me...it sounded old school and not as professional in background. (Coming from PwC and working for lawyers and also knowing how to do legal research, I guess I look at certain key experiences).  

Not surprisingly in 2 months, he told me he was taking over the firm, starting next yr. He did tell me something not major, which I didn't know and would have been buried in legislation. But he would have to know as a CPA.

I sent @Kirby about 80 PMs. I think I scared her. :whistle:

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1 hour ago, Dottles said:

I sent @Kirby about 80 PMs. I think I scared her. :whistle:

You will find 1-2 friends who are analytical and naturally to be logical, they might start talking about general finances on the edges. It doesn't mean we're experts. It's learning from mistakes. A good friend of mine, realizes she hasn't been paying attention her 20 yr. long house mortgage and overall plan. Now she realizes she has to work longer (when our organization in the midst of  major corporate restructuring for next 18 months) because she didn't pay off her mortgage earlier. She should have:  she is single and no kids.  

But it's not important to  me....she said to me. She bit back her words 40 min. later as we lazily chatted about living expenses after she asked me re condo fees, when I paid my mortgage off, cost of  home (which has dropped severely in our area...it will recover but not for another decade).

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The general consensus among experts is that if your finances are not complicated, it costs you money to get a financial advisor if you are comfortable with handling ordinary budgets, plans, and investing.  If you feel you need one, those experts say to get one that charges a flat fee, otherwise they tend to steer you into front-loaded funds and other investment vehicles where they get a kick-back.

Note that there are very good financial advisors but very many poorly-skilled ones. In order to become a certified financial advisor you need mediocre math skills, a college degree where phys. ed. counts, to take several college-101 level classes, and to pass an easy test. I've spoken with one my aunt hired back around 1990 and she had no clue what she was doing or what my aunt and uncle needed - both with great retirement earnings due to huge Pennsylvania Railroad pensions - and the advisor was putting them in very conservative funds: bonds, etc.

So be careful and have some prepared questions - including some you know the answers to - to ask before you hire one.

 

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What is the average fee for a financial advisor?
 
 
How much does a financial adviser cost? The cost of seeing a financial planner can range from $2,500 to $3,500 to set up a plan, and then about $3,000 to $3,500 annually if you have an ongoing relationship with the planner, according to the Financial Planning Association (FPA).Dec 10, 2020
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59 minutes ago, Dottles said:
What is the average fee for a financial advisor?
 
 
How much does a financial adviser cost? The cost of seeing a financial planner can range from $2,500 to $3,500 to set up a plan, and then about $3,000 to $3,500 annually if you have an ongoing relationship with the planner, according to the Financial Planning Association (FPA).Dec 10, 2020

There's no industry law that compels them to stick to that pricing arrangement/ formula. You're the client, so go shopping.   Anyway, as Kirby said earlier a financial advisor also has commission fees if they might sell an instrument with that. Some folks charge  % of your whole portfolio value. :whistle: :ph34r: ...the problem of "success" later. 

Take time to shop around, mull... it took me 8 months...in a lazy contemplative way. Am great procrastinator on this stuff. Meanwhile some interesting interviewing adventures, including one guy said to me "your life will change" and he repeated the same lecture as the guy I paid..overly risky in 1 area.....^_^.  Otherwise do some reading and become like Mick with his DRIPs (sounds like financial IV lifeline...)

 

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4 hours ago, shootingstar said:

Some folks charge  % of your whole portfolio value. 

That was the problem I encountered when I had a specific question recently about changing a portion of my 401(k) to a back-door Roth. The cost to get professional advise was substantial enough relative to the potential tax savings that it wasn’t worth it. 

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41 minutes ago, Prophet Zacharia said:

I’m sensing a theme here!

Just trying to get my ducks lined up.  I'm not stressed... though sometimes I admit I worry.... just until I can finalize retirement plans.  I think we make our goals but it'd really help if this historic bull run continues another couple years.  Or more.

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5 hours ago, Dottles said:

Just trying to get my ducks lined up.  I'm not stressed... though sometimes I admit I worry.... just until I can finalize retirement plans.  I think we make our goals but it'd really help if this historic bull run continues another couple years.  Or more.

You did a smart thing earlier by selling and moving to a home in a nice area with view of  mtns.

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  • 2 weeks later...
18 minutes ago, Dottles said:

So met with a prudential clown and a local fee   Only guy. Next Tuesday I meet another fee only guy and make my decision. It’s probably the middle guy.  No Edward Jones. You got a local advisor?

Just have fun interviewing them. 

Meanwhile this market rollercoaster is a bit wearying. 

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43 minutes ago, Dottles said:

So met with a prudential clown and a local fee   Only guy. Next Tuesday I meet another fee only guy and make my decision. It’s probably the middle guy.  No Edward Jones. You got a local advisor?

Yeah my guy is local. We haven’t actually met yet due to Covid but numerous phone discussions. 

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  • 2 weeks later...
On 10/22/2021 at 5:43 PM, Kirby said:

I have used one for a set project on an hourly fee basis.  They did a portfolio review and some retirement planning.  It's not easy to find someone who charges hourly rather than as a percentage of assets under management, but they can save a lot of money if you want one time advice rather than ongoing investment management.

Generally I think most people are fine with a very simple investment plan and they can handle their assets on their own with a little reading.  However, a financial advisor could be useful to someone who really isn't familiar with investing at all and has no interest in learning.  But there are a number of things to be careful about if you pick one.  Some advisors not only charge a percentage of the assets they manage (usually 1%) they may invest in funds with a load that results in more fees to them.  But some also invest in proprietary funds which can't be transferred to a third party broker like Fidelity or Schwab.  In those cases, people may end up stuck at their advisors (if they decide they no longer want to work with his firm) because they don't want a tax hit for selling the funds (if the investments aren't in IRA's)  or the funds have a large :"exit fee" if you try to sell them.   Some advisors also invest in needlessly complicated portfolios that are intended to show what value they are providing (and to show that it's too complicated for you to do it on your own).

I do think advisors can add value in certain circumstances, but you have to be very clear on what services they are providing and be alert to any fees (direct or indirect) that you'd pay.  

 

 

 

On 10/22/2021 at 5:55 PM, Kirby said:

Exactly, I hired one for a one time project to do retirement planning , cash projections, and an investment review.  They didn't tell me much new, but it was reassuring to confirm I wasn't missing something big.

Also, one other general tip, a lot of different people can call themselves a financial planner or financial advisor.   Some are effectively insurance salesmen or annuity providers who recommend products with expensive fees that are often disguised and built in to the price of the product.  If you want an advisor you want to look for someone who is a fiduciary and "fee only" (not fee based, which means they can also get commissions).

 

On 10/22/2021 at 8:51 PM, Airehead said:

Yes, occasionally. Doesn’t sell any products. A good estate attorney, too. Also ancestors that made wise decisions that have helped us all. One example is how the farm trust is set up. 

You two gave the best advice both publicly and privately. I just picked up a fee only advisor today. Works straight off the EMH plan. I vetted him so if I am impoverished in retirement… nobody to blame but myself. 

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55 minutes ago, Dottles said:

 I just picked up a fee only advisor today. Works straight off the EMH plan. I vetted him so if I am impoverished in retirement… nobody to blame but myself. 

It's important that you are comfortable with the advisor and feel free to ask all your questions whether advanced or more basic.  Glad you talked to a couple and found someone you like.  

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There have been studies that say that a financial advisor costs more than he/she helps if your finances are relatively simple and straightforward.

If you're knowledge-level or financial complications make you decide you need a financial advisor, the advice on the financial news sites strongly recommends that you get an advisor that charges a set-fee, not one who gets an annual percentage of the amount of money he advises you about or sets up front-end-load funds for you where he gets a kick-back from the fund company.

Also, try to research the advisor's background.  To be a certified financial advisor, in most states you need to be a college grad - though that could be with any major, including Phys. Ed., and you have to pass about seven courses that are mostly introductory level and easy-math, then pass and easy-math test.

One of the guidance counselors at the high school in which I taught was going to retire and work, part time, managing the estates of his rich parents' friends. He was well-studied and I picked his brain before he retired about what I needed to do to get ready for retirement and to handle being retired when my time came.

He said, "If you've got your mortgage paid-off and no debts, you're going to have a teacher's pension with health insurance plus Social Security.  You're set!"

He also knew that I understand stocks, bonds, financial risks, how to best invest my money and preserve capital and am a well-studied disciple of Graham-Buffett Value Investing principles.

 

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4 hours ago, MickinMD said:

There have been studies that say that a financial advisor costs more than he/she helps if your finances are relatively simple and straightforward.

.........................................................................................................................................................

He said, "If you've got your mortgage paid-off and no debts, you're going to have a teacher's pension with health insurance plus Social Security.  You're set!"

He also knew that I understand stocks, bonds, financial risks, how to best invest my money and preserve capital and am a well-studied disciple of Graham-Buffett Value Investing principles.

 

What can be complicated..which isn't always the financial advisor's area of expertise, are taxation matters, particularily more intricate points.  In the end, the person has to make the effort to track certain receipts, info...if they were slack before.

True an employer's defined pension, can already solve part of the puzzle.  I won't  be getting any retirement health care benefit. I would be just rolled in like all other Canadians under our system. So I will have to buy some add-on health insurance to cover dental, vision, travel, etc.  

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4 hours ago, MickinMD said:

There have been studies that say that a financial advisor costs more than he/she helps if your finances are relatively simple and straightforward.

If you're knowledge-level or financial complications make you decide you need a financial advisor, the advice on the financial news sites strongly recommends that you get an advisor that charges a set-fee, not one who gets an annual percentage of the amount of money he advises you about or sets up front-end-load funds for you where he gets a kick-back from the fund company.

Also, try to research the advisor's background.  To be a certified financial advisor, in most states you need to be a college grad - though that could be with any major, including Phys. Ed., and you have to pass about seven courses that are mostly introductory level and easy-math, then pass and easy-math test.

One of the guidance counselors at the high school in which I taught was going to retire and work, part time, managing the estates of his rich parents' friends. He was well-studied and I picked his brain before he retired about what I needed to do to get ready for retirement and to handle being retired when my time came.

He said, "If you've got your mortgage paid-off and no debts, you're going to have a teacher's pension with health insurance plus Social Security.  You're set!"

He also knew that I understand stocks, bonds, financial risks, how to best invest my money and preserve capital and am a well-studied disciple of Graham-Buffett Value Investing principles.

 

We are on our own no pension or company health insurance after leaving the company. We did have a company matched 401k and a company matched pension fund that was run like a 401k. When leaving the company we had to rollover the pension into a IRA. 

Besides Wo46 and my 401k's and pensions we maxout the Roth IRAs and other investment options. 

We got a financial planner's help when we started getting into the level of 1 or 2 percent mistake could cost us a small fortune. 

 

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We met with an advisor a few years back when I wanted to start another ira.   He offered to review all our financials as a courtesy. Imysure in hopes of picking up dome business. When we met with him again all he ssid was “keep doing what you’re doing”

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