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Old 02-04-2016, 01:24 PM   #21
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I am a financial advisor. Some people are perfectly capable of handling their own investments without the help of a financial advisor, some are not. The thing that makes managing your own investments difficult is that it isn't just money. Its your life savings, its your security and its the difference between working longer or retiring, and also living comfortably in retirement or not. It's a very emotional thing and it is hard for some people to make rational decisions about their money when the stakes regarding failure are so high. If you are not sure if you can stick with your plan if your portfolio declines in value by 25, 40 or 50%, you may want to hire some help. If you can stand the volatility, you will certainly get off cheaper doing it yourself. Financial Advisors, (like Doctors, Lawyers, Accountants, Engineers etc all have to earn a living)

Financial Advisors are accustomed to being "interviewed" by prospective clients. He/she should explain all of your options and all of the fees, and explain what you expect to get in return for your fees. Referrals are a great idea- one of the best indicators of a good financial advisor is when they advise you of something that is clearly not in their best interest- its in yours. Ask your friends which of their advisors have told them NOT to sell in a down market, have discouraged them from buying "hot stocks" they heard about on the golf course, and have steered them away from expensive products they don't need.

Y'all are a very self-sufficient bunch. Anyone who has the self-discipline to accumulate the assets you have requires intelligence and good decision-making skills. Recommending to EVERYONE that they invest on their own assumes that they have the same er, intestinal fortitude that you do- could be a mistake. Tons of investors sold out during 08-09 and will never recover from that loss. Don't tell everyone they can do it alone- everyone can't!

Everyone who logs in here can do it with our advice as a starting point.
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Old 02-04-2016, 03:07 PM   #22
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I think Midpack and Rodi covered things well. After 25 years of self management I went with an advisor for 1/2 of my investments. Over a number of years I did not find that he was doing better than I was and now I again handle it all myself. Except for the 401K, my funds are at Fidelity, and due to the amount I have a specific guy there that I can work with as needed. I do not have to pay him a fee, although they offer that too for those who need full service management.
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Old 02-04-2016, 03:42 PM   #23
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Originally Posted by ugeauxgirl View Post
I am a financial advisor. Some people are perfectly capable of handling their own investments without the help of a financial advisor, some are not. The thing that makes managing your own investments difficult is that it isn't just money. Its your life savings, its your security and its the difference between working longer or retiring, and also living comfortably in retirement or not. It's a very emotional thing and it is hard for some people to make rational decisions about their money when the stakes regarding failure are so high. If you are not sure if you can stick with your plan if your portfolio declines in value by 25, 40 or 50%, you may want to hire some help. If you can stand the volatility, you will certainly get off cheaper doing it yourself. Financial Advisors, (like Doctors, Lawyers, Accountants, Engineers etc all have to earn a living)

Financial Advisors are accustomed to being "interviewed" by prospective clients. He/she should explain all of your options and all of the fees, and explain what you expect to get in return for your fees. Referrals are a great idea- one of the best indicators of a good financial advisor is when they advise you of something that is clearly not in their best interest- its in yours. Ask your friends which of their advisors have told them NOT to sell in a down market, have discouraged them from buying "hot stocks" they heard about on the golf course, and have steered them away from expensive products they don't need.

Y'all are a very self-sufficient bunch. Anyone who has the self-discipline to accumulate the assets you have requires intelligence and good decision-making skills. Recommending to EVERYONE that they invest on their own assumes that they have the same er, intestinal fortitude that you do- could be a mistake. Tons of investors sold out during 08-09 and will never recover from that loss. Don't tell everyone they can do it alone- everyone can't!
Many of us didn't suggest anything for EVERYONE.

There is a market for FA's. And it would be good to have someone, like an FA, in your corner when the market overreacts up or down to try to talk a neophyte investor out of doing something stupid. That said, if William Bernstein couldn't talk his high net worth clients out of selling off in 08-09, they did in droves, having a FA is no guarantee. An inexperienced investor may still decide to act against their own best interests.
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Old 02-04-2016, 03:58 PM   #24
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One is paid a one time fee and sets you on a course that the average person can continue themselves as long as their mental faculties stay with them.
This is what we did when we were offered a lump sum from DH's pension. This forum recommended finding one from Fee-Only Financial Advisors Home - NAPFA - The National Association of Personal Financial Advisors

It was VERY reasonable, VERY time consuming, and even more eye-opening. She wanted details of our expenses, and then compared our spending in each category to several different surveys. As she (and this forum) say: "it's not what you have saved, it's what you spend." She gave me suggestions for which funds to invest in in my 401(k), and suggested we put the lump sum in Vanguard. She charges an even more reasonable fee for subsequent visits, and we've been back once, and will go again right before I give notice at my j*b. It helps me sleep at night to have someone telling me I'm doing it right. #Priceless

Good luck to you!
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Old 02-04-2016, 04:46 PM   #25
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There's many others on this site. Google "FA Name rip-off or sucks etc" you will find many folks who get taken. There's a funny parody on utube regarding E.D. Jones and how they treat their clients. You have to find it through utube as Jones' bots attempt to clean up their searchs.
Is this it? There seem to be several but I liked this one.

Note: R-rated so perhaps NSFW - turn the volume down if you're at w*rk.

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Old 02-04-2016, 04:54 PM   #26
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Everyone who logs in here can do it with our advice as a starting point.
Or despite our advise............
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Old 02-04-2016, 05:03 PM   #27
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My experience-

DW has her IRA through an FA
I have a small IRA through the same FA (as demanded by DW)
I have separate 401k and other separate accounts that I manage

All of my accounts that I manage get slightly better returns than the FA managed account - usually by 0.5 to 1.5%. Kinda makes sense since the FA gets 1%.
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Old 02-04-2016, 05:10 PM   #28
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Is this it? There seem to be several but I liked this one.

Note: R-rated so perhaps NSFW - turn the volume down if you're at w*rk.

That's the one. I forgot it's NSFW. It's a pretty accurate description of what they push.

OP, if you use a FA only deal with someone working as a fiduciary, never accept someone working under suitability.

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Old 02-04-2016, 05:49 PM   #29
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I fired my FA years ago when I asked him why he was't retired (he was in his late 60's). His reply was "I'm not debt free". The way he said it sounded like he was buried in debt. That sealed the deal.


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Old 02-04-2016, 06:00 PM   #30
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I fired my FA years ago when I asked him why he was't retired (he was in his late 60's). His reply was "I'm not debt free". The way he said it sounded like he was buried in debt. That sealed the deal.


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Old 02-04-2016, 06:13 PM   #31
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Before deciding on any financial advisor, you might want to watch the 2 part ABC movie (Madoff) that's airing now (last night and tonight)

And for the honest ones, I've always wonder why they are still working for a living, if they are so financially gifted.

Regarding your 401k. Do you have good investment options in your 401k? Many (not all) have a good range of investment options and very low management fees. Also, be aware of the IRS rules when moving tax deferred money from your 401k to avoid an unpleasant or unexpected tax surprise.
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Old 02-04-2016, 06:37 PM   #32
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Another thought on 401(k) vs rolling it out.
Some 401(k)'s offer a stable value fund. This is similar to a CD - pays interest... but usually at a higher rate than current CD rates. This is something that isn't available outside 401(k)s... so if you have one, you might want to keep at least some of your money in the 401(k)... but do it based on your asset allocation that you'll figure out after doing some research, reading, and/or consulting a fee-based FA.
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Old 02-04-2016, 07:15 PM   #33
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And for the honest ones, I've always wonder why they are still working for a living, if they are so financially gifted.

Hey I'm saving just as hard as I can to quit, just like everyone else!
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Old 02-04-2016, 07:35 PM   #34
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We save this much by not paying someone else to manage out investments.
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Old 02-05-2016, 05:12 AM   #35
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Thanks for all your comments. Certainly changed my opinion on Financial advisors. I'm so glad that I stumbled upon this website.


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Old 02-05-2016, 05:27 AM   #36
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There are some decent ones like Evanson and Cardiff that don't overcharge because you're loaded.
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Old 02-05-2016, 07:51 AM   #37
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We save this much by not paying someone else to manage out investments.

That's one side of the coin. I look at return after expenses against benchmarks. If they're outperforming then the fees are well-spent. Would you choose a fund with a 0.5% expense ratio and a 5% average return after expenses over a fund with a 2% expense ratio (assuming similar investment objectives) and an average net return of 6%, just because the former has a lower expense ratio?
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Old 02-05-2016, 07:57 AM   #38
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That's one side of the coin. I look at return after expenses against benchmarks. If they're outperforming then the fees are well-spent. Would you choose a fund with a 0.5% expense ratio and a 5% average return after expenses over a fund with a 2% expense ratio (assuming similar investment objectives) and an average net return of 6%, just because the former has a lower expense ratio?
I'm a novice compared to most on this board so perhaps someone else can chime in as well. However, the point is the only way an FA is going to over or underperform the benchmark by so much is through active management. And statistically speaking it's less likely to find someone that over-performs consistently so year over year, the investor is better off taking what the market returns given one's allocation and keeping expenses as low as possible.

That said, if one has behavioral issues with sticking to an investment plan then one is better off finding the lowest cost FA available. There are a good number who charge a fixed fee, not AUM, and may be worth the cost to help their clients stay on the plan.
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Old 02-05-2016, 08:16 AM   #39
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That's one side of the coin. I look at return after expenses against benchmarks. If they're outperforming then the fees are well-spent. Would you choose a fund with a 0.5% expense ratio and a 5% average return after expenses over a fund with a 2% expense ratio (assuming similar investment objectives) and an average net return of 6%, just because the former has a lower expense ratio?
I'm pretty sure this thread is about showing the OP how a core of index funds is used, rather than guiding him towards higher expense funds.

Expenses are negatively correlated to managed fund returns. That is something Bogle mentions quite a bit. I believe him.
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Old 02-05-2016, 09:25 AM   #40
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Another thought on 401(k) vs rolling it out.
Some 401(k)'s offer a stable value fund. This is similar to a CD - pays interest... but usually at a higher rate than current CD rates. This is something that isn't available outside 401(k)s... so if you have one, you might want to keep at least some of your money in the 401(k)... but do it based on your asset allocation that you'll figure out after doing some research, reading, and/or consulting a fee-based FA.
+1 - these are generally only offered to institutional investors
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