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 Post subject: advice on financial/investment planners?
PostPosted: Mon Feb 25, 2013 8:09 am 

Joined: Sun Mar 02, 2008 11:55 pm
Posts: 55
hello!
So my husband and I have increasingly large incomes, which I'm not at all complaining about, but we have more money, literally, than I know what to do with, despite all the time I've spent reading GRS. :-) We decided we need to get professional consultation on how to deal with our assets.

I wasn't sure how to go about this because trying to find online reviews for fee-based financial planners (which is what GRS has told me I should find) didn't seem possible, and most of the people I know in our area don't have the assets to need this. So I found one group with random web searching which looks slick and fancy (that makes me suspicious) and then we also found another person through my husband's work. We have met with both and we are unsure what to do.

Financial guy #1 from the slick/fancy place: it is not affiliated with any investment company (i.e. not Schwab or Merrill Lynch or anything like that), it is a private group. They will do one of two things. They will either give you a plan for your finances that you can follow, which for us they said would cost $1500 or so. This option of course they downplayed and said that they "lose money" on it and the only reason they offer it was so they could get our business for other things later on. The second option was asset management. They would not only make the plan but also manage the money, and would charge 1% calculated quarterly for the amount of funds they were managing. In my brief online searching, 1% seemed fairly standard for this sort of arrangement. I was a little bit annoyed with them because we had an initial meeting where we gave them all our financial information, and then we had a second meeting where they would 'present us' the options, and it was really just a boilerplate portfolio with a fancy cover and nothing of substance to review.

Financial guy #2 is from Northwest Mutual. He says they are the only "non-brokered" investment company and that means that he can work with us on any investment or insurance product. I asked how he got paid and he said that he works on commission and that whatever products we would invest in on his advice, he would get "whatever the house gets" as his commission. I expressed my concern about that and said I was looking for a fee-based person because I didn't want commissions to dictate what products we were being recommended, and he said he understood that and he could refer us to someone else if that was what we were looking for.

Anyway. Both guys were of course kind of car-salesmanish, after all they are salesmen, and that always rubs me the wrong way. I liked the second guy a little better though. He seemed a little more human (probably because his wife works with my husband), he only works with physicians (we are both physicians), and after reviewing our information he pointed out that we really don't need life insurance at this point. It seemed refreshing for him to start off by telling us that we didn't need to pay for something.

But then again, he works on commission and I am not very cool with that. Or at least I believe I should not be cool with that. It seems like the GRS way would be to get the financial plan from the other set of guys for $1500 and implement it myself. The idea of having them manage it for us certainly has some appeal but it's hard to justify losing 1% off the top in perpetuity. Or maybe since neither of these guys were a perfect fit, the GRS way would be to find someone else, but at this point we've put like 4 or 5 hours into working with these other two guys and giving them all our information and had 3 different meetings with them (which are really tough to schedule because of work and baby)....

any advice?? Sorry for the long message.


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Mon Feb 25, 2013 9:34 am 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1558
What you wind up getting depends a lot on what you're looking for. A little guidance and handholding? A financial plan for early retirement? Tax mitigation?

You may already have access to discounted or free services if you're investing with one of the "Big 3" mutual fund companies if your portfolio is big enough. Since I'm limited to only 1 link per post, you'll have to do a little searching on each site. The services are as follows:

Vanguard
Investors with $50,000 to $500,000 in Vanguard mutual funds and ETFs
  • Commission-free Vanguard ETF® trades and reduced commissions for stocks and non-Vanguard ETFs. No account service fees.
  • A detailed financial plan at a discount. A Certified Financial Planner™ professional from Vanguard will analyze your investments and saving strategy.
Investors with $500,000 to $1 million in Vanguard mutual funds and ETFs
  • Sophisticated support from representatives who can answer your more complex investment questions.
  • Commission-free Vanguard ETF trades and additional reductions on brokerage costs. No account service fees.
  • A complimentary financial plan by a CFP professional from Vanguard that analyzes your investments and saving strategy.
Investors with $1 million or more in Vanguard mutual funds and ETFs
  • Exceptional service from a personal representative who is your guide to all that Vanguard offers.
  • "Ask a CFP® professional" program for guidance on particular financial issues as they arise. For long-range planning, a complimentary financial plan by a CFP professional that analyzes your investments and saving strategy.
  • Exclusive access to select Vanguard mutual funds that are closed to other investors.
  • Commission-free Vanguard ETF trades, 25 commission-free trades for stocks, options, and non-Vanguard ETFs and transaction-fee funds, and significant savings on other brokerage costs. No account service fees.

T Rowe Price
For clients with at least $250,000 at T. Rowe Price
  • Access to Personal Services Client Managers
  • Premium analyst ratings and estimates
  • Conversations with T. Rowe Price Managers CD
For clients with at least $1,000,000 at T. Rowe Price
  • Free Advisory Planning Services
  • Access to The Wall Street Journal Online
  • Personalized assistance with complex financial transactions

Fidelity
For customers with $250,000 or more in assets, our wealth management services offer such benefits as:
A personal relationship with an Account Executive who’ll provide you with one-on-one guidance consultations, supported by a team who will help you with your day-to-day account needs
  • Everyday low pricing on brokerage trades as well as certain fees waived, including annual fee and most low-balance fees for mutual funds.*
  • Full range of investment products and solutions backed by access to a dedicated team of experienced professionals, including Fixed Income.
  • Advanced performance reporting and automated e-mail alerts to help keep your financial goals on track
  • Special access to Fidelity insights through conference calls and seminars
We also offer other additional services and entitlements to help you with your long-term financial needs. Your Account Executive can refer you through our Wealth Advisor Solutions® program to registered independent advisors who have experience in specialized wealth management services.
Our complimentary wealth management services are designed to enhance your experience with us, giving you the guidance, investments choices, and the service you want all for a great value.

Now if you're bent on finding somebody local who will sit with you and go over everything, you might start with http://www.napfa.org/. Click on their How to Find an Advisor link and start there. Good luck.

Edit: added Vanguard services for people with portfolios between $500K and $1M, just for reference.


Last edited by VinTek on Wed Feb 27, 2013 9:42 am, edited 1 time in total.

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 Post subject: Re: advice on financial/investment planners?
PostPosted: Wed Feb 27, 2013 8:46 am 

Joined: Sun Mar 02, 2008 11:55 pm
Posts: 55
VinTek, that's a really good tip! We DO have >$50K with Vanguard. I will look into this.


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Wed Feb 27, 2013 9:21 am 

Joined: Fri May 04, 2012 2:23 pm
Posts: 810
If you want someone to give you a plan, you have to pay for it. I've found the VG "advisors" to be lacking, but knowledgeable on things like Roth conversions, rollovers etc.

Fidelity does a better job on the service side, so I hear.

I am also planning on moving $50k or so over to Wellsfargo before April 1. We'd get free checking as well as 100 free trades per year. As well as their "advisors" depending on how much you give them.

https://www.wellsfargo.com/checking/pma/

I've said it before, but educating yourself is key.

_________________
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Wed Feb 27, 2013 9:23 am 

Joined: Sat Jun 16, 2012 8:06 am
Posts: 79
Having worked with a couple of independent CFPs, I'll completely agree it isn't easy to find good fiduciary advisors. VinTek was right to remind you that you have access to some help already, and that nobody can really help you unless you have some idea of what you need help WITH.

That said, my nephew asked for my advice a couple of years ago because as he put it, "We've talked to all the discount brokers and I didn't really feel comfortable taking the advice of their CFPs, who were all younger than me."

My nephew at the time was.....32 yrs old!

He had a very valid point. Although brokerages are encouraging their advisors to get their CFP certification (which isn't easy), the fact is, most of them are young, not that experienced, and not well-established enough to go out on their own or get a job with a more prestigious/successful advisory firm.

Think of a bank. Customers have the most interaction with tellers (in fin.svcs., the generic "advisor"). If they have problems, customers talk to the Operations Officer, often disguised as an Asst. VP or other such impressive title which actually means nothing at a bank (VPs abound at banks like wastebaskets). An OO is equivalent to a discount brokerage CFP: some good ground experience, but no real rank; just one of several thousands at the same job for the company.

This is not to say you can't find a good CFP at a brokerage. You can, but it's the luck of the draw. You might get a really good one (my brother did and has used the guy for decades) but the odds aren't high in your favor that s/he will have or develop, the necessary expertise that YOU SPECIFICALLY NEED, for your personal situation - now and in the future going forward.

That said, unlike most here I have no problem with paying a good advisor. The key word is "good". My criteria differs from most here; I worked for a man I consider an extraordinarily good, ethical CFP. I learned a lot from him, and saw how he added considerable value to his clients' lives.

But if you didn't know someone who was in the industry, you'd probably never find him. He has a small Yellow Pages ad. He never runs public seminars, or sends out any advertising at all. Occasionally someone becomes a client through his YP ad, but 95% of his current clients are either referrals from other clients or second- and third-generation clients. He is very selective about who he takes, and has "fired" clients for being too much trouble/too rude to his staff.

Finding a good fiduciary advisor takes time – weeks, if not months. It will take time away from what I'm sure is a busy schedule already for you. Sheer inertia prevents the people who need help the most, from finding it easily.

I'll suggest you look at the Garrett Planning Network first. Sheryl Garrett has been a leader in helping people find an independent CFP. Yes, the first visit is always free. No, you won't accomplish much. Yes, you will be giving confidential financial data to several advisors because if you're smart, you'll search for and interview at least two or three names, INCLUDING getting long-term customer feedback by talking to one or two clients who have worked with said advisor at least five years and have a financial situation somewhat similar to yours (similar, not identical!).

There's a lot more to this process, btw. If I go into it my post will run pages long. Check the following websites for downloadable "discussion topics" on how to pick a CFP and what questions you should ask. Check the Garrett website, the SEC website, and the professional planners association website, called FPAnet.org (under Tools).

If you are serious about this – and you should be, a good fiduciary planner can be an essential partner in lessening the risk in your life (for better odds on achieving your goals, as well as helping to define what your goals are) – it will take some serious work on your part. But once done, it will run like a well-tuned car: an occasional tuneup, some minor maintenance, and you can whiz down the road while people in clunkers who couldn't/didn't plan properly, are broken down on the side, trying to fix two flat tires.


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Wed Feb 27, 2013 9:52 am 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1558
http://www.napfa.org/HowtoFindAnAdvisor.asp.

This basically echoes what jaiko advises, but in a nice condensed graphical format.


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Wed Feb 27, 2013 10:07 am 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1558
Bichon Frise wrote:
I've said it before, but educating yourself is key.

I agree with this 100%. One of the best ways to recognize a good planner is to be able to discern good advice from bad. And you need a foundation to do that. I habitually recommend that folks read http://www.transparentinvesting.com/uploads/wholestory.pdf to get that foundation. It's an easy read at 53 pages. BF usually recommends the Bogleheads, which is also a great source of information. But absolutely, get that education. It can be crucial in helping you determine which advisor is right for you.


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Sat Mar 02, 2013 7:21 pm 

Joined: Sat Jun 16, 2012 8:06 am
Posts: 79
And I should add, although it's important that you be able to work well and closely with a FIDUCIARY financial advisor, the most important role a CFP can fill is to ask you and your spouse the "hard questions".

Everybody plans, but many people don't think in terms of the many things that can go wrong with their rosy assumptions. Or they just don't know enough regarding legal issues, or a change in federal/state laws, to be able to judge how much risk they currently have in their lives.

A good fiduciary advisor is also that neutral 'sounding board' when you and your spouse disagree on something, whether it's goals, investments, or risk-taking. You want someone with experience in good times and bad times (preferably not just the 2008 market crash but the 2000 crash and maybe even the 1987 one!) who can keep you focused and calm you when you're panicking.

Remember, you don't use an advisor to get the best ROI. You use an advisor to help you develop a comprehensive and thorough financial plan that addresses your holistic financial well-being to ensure that your life runs smoothly, you achieve your goals with the least amount of risk possible, and that your heirs have an easier time when they are grieving.

There were several examples when I was working at the CFP's office where new clients transferred their accounts in and we were stunned by the bad advice they had been given (and often taken) about their inherited funds. One new client had been using a famous brokerage whose name you'd recognize instantly; they titled an inherited IRA incorrectly and we had to do some really fast paperwork to prevent the client from getting slapped with a big tax bill!


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 Post subject: Re: advice on financial/investment planners?
PostPosted: Mon Mar 04, 2013 12:43 pm 

Joined: Mon Mar 04, 2013 10:13 am
Posts: 9
this isn't exactly what you were asking, but I'd really suggest trying to look into investing yourself. I've had other people invest my money for the last 15 years or so, and overall wish I'd done it myself (which I do now).

That's not to say you have to actively pick stocks. Personally, I look into picking a range of index funds with low fee's. If you look at most of the data, it's really hard to beat the indexes before fee's, let alone after.

If you're still set on finding someone, you can always put your funds into a few index funds while you wait, and that will give you more time to research potential advisors. I would Never go with someone i didn't have a good feeling about. From my point of view, whatever makes me sleep best at night is the right choice. My stress isn't worth making marginally more.


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