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OT: Anyone ever hire a financial advisor?

Op2

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Mar 16, 2014
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I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
 
They will definitely want you as a longterm client so they can "continue to help you navigate the waters," and depending on who you talk to and the level of service you are looking for, it may not be as expensive as you think.
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
I assume you’re talking about investments. Good ones have access to or knowledge of high quality funds, and would be well worth the fees. You don’t want some dude just out of college. I would personally ask some older colleagues or family friends who have some bucks who they use and let them pitch you.
 
It’s worth it to me. He has access to other instruments that can help me maximize my returns. You see how much you pay and it hurts but what you have to realize is that your standard mutual funds have fees built in. He continues to outperform the market so I no longer check my performance as frequently. He’s locked into my goals and knows what we want. And while our strategy doesn’t change often, it’s worth keeping him long term because the market changes and investment options change.
 
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I moved from to a new location and decided that I wanted to stay in the new location and wanted to move my money to my new area.

I interviewed 5 different financial advisors: I had a scoring system for my needs on 1) Investment advise 2) Accessibilty 3) Tax Planning 4) Retirement Planning......... and some interpersonal skills like did I like the team presenting to me.

I told them all that I was interviewing multiple advisors and selecting a company to work with me for the long term, I selected a company that I have been very impressed with......

You can manage your own finances if you have a real interest, are savy at math and have about 10 hours a week to review the markets and to, without emotion, move your money around.......

Just my thoughts...... Past returns are not an indication of future performance.......
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
There are advisors that charge a set fee (amount) rather than a % of assets.
In addition to financial tools and systems to evaluate funds/stocks, Sometimes they need to talk you off the ledge when you are tempted to make a rash decision (as most individual investors do over time). That's why individual investors have a much lower long term return than the average market return. Can't figure out how to post that report/graph here.
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
I've had a financial planner for over 20 years, and she is one of the biggest reasons I was able to retire at 56. From the start, she asked my wife and I our goals and built investment strategies from there. When we adjusted our goals, she had the expertise to make recommendations on how we should adjust our investing. When external factors changed, it was more of the same. When I retired, she guided us through the process of transitioning the investments I had with the federal government to more beneficial accounts. When long term care insurance turned out to be a non-starter because of my medical history, she established a fund that will cover the care, if needed; can be used for other purposes if I don't need the care; and is cheaper than the insurance premiums. If you' have the expertise and the time, you may be able to do. Most people don't have enough of either.
 
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It depends on what you think you need one for. I believe in boring, long term index fund investing which in my opinion rarely requires help from a costly financial advisor which over time can add up to hundred of thousands in lost savings. If you do hire one, look for a certified CFP fiduciary that is required to have your best interests in mind. Many "advisors" are really salesmen (often whole life insurance salesmen) that get paid on trade commissions and they don't give a crap about their clients since they get paid as soon as the trade happens. Most CFPs get paid a percentage of the assets they manage for you so if they increase your portfolio they make more money so it's a win-win, but it still adds up to considerable fees over time and they will likely struggle to beat the main S&P 500 index performance long term especially after accounting for their fee.

You could also look into a handful of flat fee consultations instead of an AUM approach. I looked for one of these but found it hard to find one, likely because it pays them less than long term AUM. But if you can find one it might only cost you a few thousand bucks at an hourly rate to get your questions answered and set you up on a long term plan that you can manage and execute yourself. I'd find this more appealing personally but advisors that do a good job with this are harder to find. I did find a friend of a friend that offered me 4 hours for $1000 but after 1-2 hours he didn't provide what I was looking for and it didn't go well, but he didn't charge me either so no harm done. I do wish I could find one of these to consult with for a couple of hours every 5 years or so, or at big inflection points in my age or investing, but I haven't found a service I think it both effective at only doing flat fee consultations and is reasonably priced. I'd be particularly interested in one with tax expertise since I have a good handle on the investments stuff.
 
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It depends on what you think you need one for. I believe in boring, long term index fund investing which in my opinion rarely requires help from a costly financial advisor which over time can add up to hundred of thousands in lost savings. If you do hire one, look for a certified CFP fiduciary that is required to have your best interests in mind. Many "advisors" are really salesmen (often whole life insurance salesmen) that get paid on trade commissions and they don't give a crap about their clients since they get paid as soon as the trade happens. Most CFPs get paid a percentage of the assets they manage for you so if they increase your portfolio they make more money so it's a win-win, but it still adds up to considerable fees over time and they will likely struggle to beat the main S&P 500 index performance long term especially after accounting for their fee.

You could also look into a handful of flat fee consultations instead of an AUM approach. I looked for one of these but found it hard to find one, likely because it pays them less than long term AUM. But if you can find one it might only cost you a few thousand bucks at an hourly rate to get your questions answered and set you up on a long term plan that you can manage and execute yourself. I'd find this more appealing personally but advisors that do a good job with this are harder to find. I did find a friend of a friend that offered me 4 hours for $1000 but after 1-2 hours he didn't provide what I was looking for and it didn't go well, but he didn't charge me either so no harm done. I do wish I could find one of these to consult with for a couple of hours every 5 years or so, or at big inflection points in my age or investing, but I haven't found a service I think it both effective at only doing flat fee consultations and is reasonably priced. I'd be particularly interested in one with tax expertise since I have a good handle on the investments stuff.
Tax planning is often overlooked when discussing financial planning. I talk to my accountant as much, if not more, than I talk to my FA. And I see them as having very unique and discrete skills and knowledge.
 
Tax planning is often overlooked when discussing financial planning. I talk to my accountant as much, if not more, than I talk to my FA. And I see them as having very unique and discrete skills and knowledge.
I don't have an accountant since I do my own taxes which are relatively straightforward, for now. That will change in the future though, so it's something I'll need to look into eventually.
 
If you are asking the question it may be likely that a well vetted pro is worth it for the peace of mind alone. My wife and I had been letting our former corporate 401ks sit with our old companies and as we are both in education right now, much of our "savings" is already taken out by our pension contribution.

We are closing in on a hopeful sweet spot where car loan is paid, mortgage is within 4 years and I'm finally getting some raises which will hopefully help us really sock away hopefully my wife's whole paycheck.

Our planners were vital in helping us get organized and be realistic about our planning. At one point their numbers indicated that we could retire when my wife was 58 and I was 56. We excitedly went to our meeting last Spring just as the education world was at a low point. We both wanted to quit, and when we asked our planners if their "data" was still valid they hedged and recommended we didn't join the Great Resignation.

Boy am I glad we had them in our corner. You do need to be careful with them selling different long term care and other insurance options but they also respect our wishes when we say "no."

Honestly, I sleep better knowing that someone who has helped friends just like us retire nicely is watching our back. In a perfect world we would change our account executive, but we bought in to the Partnership, not necessarily her, and it is working.

Good Luck!
 
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It’s worth it to me. He has access to other instruments that can help me maximize my returns. You see how much you pay and it hurts but what you have to realize is that your standard mutual funds have fees built in. He continues to outperform the market so I no longer check my performance as frequently. He’s locked into my goals and knows what we want. And while our strategy doesn’t change often, it’s worth keeping him long term because the market changes and investment options change.
What instruments?
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
The performance of fund money managers is tracked and guess what? In the latest full year, 79.6% of the pros didn't beat the market and it gets worse over time. What's a financial advisor typically do? They put you into a mix of these funds, presumably managed by the best of the best, and charge you 1 to 1.5% for that privilege. You might be better off looking into robo-advisors if you really want someone to do it for you, the fees are much less.

Check out this link, lots of good information.

 
Thanks for all the replies. This has been useful although I'm still not sure what to do. I came to the "Just do index funds rather than paying someone to find the best investments" conclusion long ago. I've been doing that and maxing out tax advantaged retirement accounts for a good while now and I'm getting near (5-ish years) away from retirement and I just want to make sure I don't do anything stupid with all I've accumulated. Managing well what I've accumulated so far is my current purpose rather than aggressively accumulating more.

I have several different accounts, some Roth and some not, and I'm not sure if it's worth it to continue to pour my salary aggressively into Roth's until I retire, or whether to consolidate some of these accounts, or what to have them all in at the point of retirement, and how to not pay an unnecessarily high amount of tax. Stuff like that. I'm not complaining, it's better to be in this position than to not have the money to worry about how to manage in the first place.

I think I'm either going to manage it myself or have a session or two with someone to make sure I'm going in the right direction. I don't think I need a consistent, hands on money manager. Then again, maybe I'm wrong.
 
Thanks for all the replies. This has been useful although I'm still not sure what to do. I came to the "Just do index funds rather than paying someone to find the best investments" conclusion long ago. I've been doing that and maxing out tax advantaged retirement accounts for a good while now and I'm getting near (5-ish years) away from retirement and I just want to make sure I don't do anything stupid with all I've accumulated. Managing well what I've accumulated so far is my current purpose rather than aggressively accumulating more.

I have several different accounts, some Roth and some not, and I'm not sure if it's worth it to continue to pour my salary aggressively into Roth's until I retire, or whether to consolidate some of these accounts, or what to have them all in at the point of retirement, and how to not pay an unnecessarily high amount of tax. Stuff like that. I'm not complaining, it's better to be in this position than to not have the money to worry about how to manage in the first place.

I think I'm either going to manage it myself or have a session or two with someone to make sure I'm going in the right direction. I don't think I need a consistent, hands on money manager. Then again, maybe I'm wrong.

It seems like you're asking if and how much to convert 401k funds to Roth funds. If that's the case, then no one can really answer that because there are so many different scenarios to analyze that are unique to your situation.

I have a suggestion for you, look into a Financial Software package called MaxiFi Planner. It costs $109 for a year, you can simulate as many combinations of conversion, amounts, and timing as you wish among everything else involved in setting up and analyzing your financial plan. It is extremely powerful software that inputs current and future known tax laws into the calculations. A couple of things, 1) I don't like that you can't input your actual budget/spending, it basically spits out maximum yearly fixed and discretionary spending until you want your money to run out, or if and how much you want to pass on to your heirs, 2) The amount of data it presents in the reports is so large it can be unwieldy to sort through it.

This is the type of software that financial planners use, so could start by spending $109 to see if that works for you.

 
Thanks for all the replies. This has been useful although I'm still not sure what to do. I came to the "Just do index funds rather than paying someone to find the best investments" conclusion long ago. I've been doing that and maxing out tax advantaged retirement accounts for a good while now and I'm getting near (5-ish years) away from retirement and I just want to make sure I don't do anything stupid with all I've accumulated. Managing well what I've accumulated so far is my current purpose rather than aggressively accumulating more.

I have several different accounts, some Roth and some not, and I'm not sure if it's worth it to continue to pour my salary aggressively into Roth's until I retire, or whether to consolidate some of these accounts, or what to have them all in at the point of retirement, and how to not pay an unnecessarily high amount of tax. Stuff like that. I'm not complaining, it's better to be in this position than to not have the money to worry about how to manage in the first place.

I think I'm either going to manage it myself or have a session or two with someone to make sure I'm going in the right direction. I don't think I need a consistent, hands on money manager. Then again, maybe I'm wrong.
We are in the same spot age wise. Our decision to hire somebody came from our own relative disorganization as we struggled to pay for college for our kids and just breathe as we became empty nesters (we called that period the 20 year hangover).

Once we got organized using their planning tools, streamlined various life insurance policies, and set realistic goals for where/how we plan to retire our guy said "it would be really hard to screw this up."

That has always stuck in my craw. You seem to be more comfortable and much more well versed in finance than we are. Your consultation plan likely is best for you...maybe split the "healthcheck" amongst 2 reputable planners to get more outside perspective?

Good luck!
 
Thanks for all the replies. This has been useful although I'm still not sure what to do. I came to the "Just do index funds rather than paying someone to find the best investments" conclusion long ago. I've been doing that and maxing out tax advantaged retirement accounts for a good while now and I'm getting near (5-ish years) away from retirement and I just want to make sure I don't do anything stupid with all I've accumulated. Managing well what I've accumulated so far is my current purpose rather than aggressively accumulating more.

I have several different accounts, some Roth and some not, and I'm not sure if it's worth it to continue to pour my salary aggressively into Roth's until I retire, or whether to consolidate some of these accounts, or what to have them all in at the point of retirement, and how to not pay an unnecessarily high amount of tax. Stuff like that. I'm not complaining, it's better to be in this position than to not have the money to worry about how to manage in the first place.

I think I'm either going to manage it myself or have a session or two with someone to make sure I'm going in the right direction. I don't think I need a consistent, hands on money manager. Then again, maybe I'm wrong.
Ask yourself a few simple questions and be honest. Do you enjoy managing your investments? Do you have time to watch the market? Do you have the fortitude to make changes when conditions make sense or will you sit back and wait?

Since you're asking I suspect investing isn't your hobby and therefore you don't enjoy following the market. Your strategy of dumping money into index funds is the typical response of a wise investor who doesn't like being very involved.

Here's my advice. Call your local branch of TD Ameritrade and ask to meet with a Financial Consultant, preferably a Senior Financial Consultant. They will sit down and review your portfolio and give you some suggestions and most importantly answer any questions you may have for free. They'll explain what they can do vs getting you moved to a managed portfolio, which TD has as well. Note, TD Ameritrade was recently purchased by Charles Schwab and will be changing names soon.

This won't cost you a dime. Show up prepared with copies of all statements and a list of questions in order to start the conversation. You'll generate more questions during the meeting but have a few important ones written down prior.

Why TD? Because I'm familiar with their service. I have accounts in other places and have had accounts in many of the large houses over the years and I think TD is one of the best.
 
Your strategy of dumping money into index funds is the typical response of a wise investor who doesn't like being very involved.
Disagree. Index fund investing doesn't indicate anything about interest level. It indicates that someone is smart enough to realize that over the long term actively managed funds, after accounting for their higher fees, rarely outperform the large indexes after accounting for their low fees.
 
Disagree. Index fund investing doesn't indicate anything about interest level. It indicates that someone is smart enough to realize that over the long term actively managed funds, after accounting for their higher fees, rarely outperform the large indexes after accounting for their low fees.
Maybe you missed "of a wise investor".
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
I would definitely get an advisor. Investing and the markets are a hobby of mine so I spend a fair amount of time and still find them beneficial. I would suggest 3 things:

Understand their investment philosophy and be sure you agree with it. If they can't explain it I would take a hard pass.
Hire an advisor that you pay a flat fee or a fee based your asset value [the more you make the more they make.] and not a transaction based advisor that the more they trade the more you pay.
Even if you understand the philosophy and think you can do it yourself having a pro do it removes the emotion involved. Do not underestimate the power of emotion.

The single best advice by a large amount was in 2008/2009. I had just retired and taken a lump sum. The stock market had fallen from 12,000 to under 7,000. Think about a market drop today from 31,000 to 18,000. I had a decent 401k from working and it was getting hammered daily. It is easy to say now but in the emotion of the moment it was anything but easy. Their advice keep your 401 k and take your lump sum and dollar cost average into the market over the next 6 months. I did that and and pretty happy today. Now their philosophy is slightly more complicated than that but not much. Have 10 years of assets out of the market in laddered bonds or an equivalent and put the rest in high quality stocks. So over the years we miss the big upticks and weren't as heavy in tech as hindsight would tell you but it is reassuring.
 
No, I'm a married man. First of all, that gets rid of most of my disposable income. And then my wife tells me what to do with the rest of it. 🙂
 
At what net worth does it become advisable to check out FAs? 100K 2M 4M 10M ... ?
Also any thoughts about local (to where you live) versus remote FAs? Can it become a source of discomfort knowing there's someone in your town who knows how much and where you've stashed your monies particularly if you end up firing them?
 
Thanks for all the replies. This has been useful although I'm still not sure what to do. I came to the "Just do index funds rather than paying someone to find the best investments" conclusion long ago. I've been doing that and maxing out tax advantaged retirement accounts for a good while now and I'm getting near (5-ish years) away from retirement and I just want to make sure I don't do anything stupid with all I've accumulated. Managing well what I've accumulated so far is my current purpose rather than aggressively accumulating more.

I have several different accounts, some Roth and some not, and I'm not sure if it's worth it to continue to pour my salary aggressively into Roth's until I retire, or whether to consolidate some of these accounts, or what to have them all in at the point of retirement, and how to not pay an unnecessarily high amount of tax. Stuff like that. I'm not complaining, it's better to be in this position than to not have the money to worry about how to manage in the first place.

I think I'm either going to manage it myself or have a session or two with someone to make sure I'm going in the right direction. I don't think I need a consistent, hands on money manager. Then again, maybe I'm wrong.
Dont confuse picking investments with actual planning. A real plan has a target ror that is needed to make ur goals a reality. Anything above the target is gravy
 
Dont confuse picking investments with actual planning. A real plan has a target ror that is needed to make ur goals a reality. Anything above the target is gravy
Yes, I don't think I need investment advice per se but rather planning advice.
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
Hunter Biden
 
An advisor when I reached 50. I became way too emotional. Too easy to click computer keys when things go south. Now I am retired and I let the pros handle it.
 
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I do it myself but use a fee based advisor when needed. Google Garrett Financial Network, I'm sure there are others too. No ties to brokerages and you pay by the hour.
 
At what net worth does it become advisable to check out FAs? 100K 2M 4M 10M ... ?
Also any thoughts about local (to where you live) versus remote FAs? Can it become a source of discomfort knowing there's someone in your town who knows how much and where you've stashed your monies particularly if you end up firing them?
That's pretty tough to answer, it really depends on your knowledge level, goals, ability to stick to a plan, and willingness to do things yourself. For some that could mean they want help at <$100k and for others it might mean the get help after several millions.
 
I'm at the point where I need to decide whether I need to contact a pro or whether I can figure it out myself via Google University and You Tube Tech. The thing is, I don't think it'd be that complicated if I was sure I was doing it right to start with, so what I might need is just a session or two with a good financial advisor (that I'd pay handsomely for of course). But I'm afraid if I do that they might want to try to BS me into making me their longtime client instead of just giving me good advice that I can then go away and follow.

Thoughts? TIA.
Visit a Schwab or Fidelity office in your area. They'll sit with you for an hour and try to guide you in the right direction for no charge

You could start with something like this before going to an investment advisor:
  • 6 months living expenses in a savings account at a place like Ally Bank
  • $10k per year per family member in iBonds through Treasury Direct
  • Max out your 401K match
Additional investments: Some say you should have 100 minus your age in equities. Keep it simple with a low cost broad market ETF like SCHB.
 
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