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Old 04-26-2013, 07:21 PM   #21
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We use a financial adviser for our IRA's. I've been tracking progress and it seems like our IRA's are performing very close to our accounts that I manage. For me, it looks like the difference is due to a difference in asset allocation.

If you're only paying 0.5% and you're happy with his results, I'd stick with him.
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Old 04-26-2013, 10:14 PM   #22
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$250K avg annual portfolio X 60 working and retirement years X .05 annual fee = $75,000 lifetime adviser fees.

$500K avg annual portfolio X 60 years working and retirement years X .05 annual fee = $150K lifetime adviser fees.

$1M avg annual portfolio X 60 years working and retirement years X .05 annual fee = $300K lifetime adviser fees.

You can buy a lot of investing books for that kind of money. And ask questions here for free. Or buy a rental house for cash and get income every month with the money not spent on adviser fees.

$1.25K in average annual adviser fees, with another $1.25K added every year, invested for 60 years @ 5% interest = $464,078.63 according to the monkey chimp online compound interest calculator.
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Old 04-27-2013, 05:19 AM   #23
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I'm a bit disappointed today, after meeting with our financial adviser yesterday. He is basing everything on 1 year, 3 year, and 5 year returns, saying that fees don't matter. I'll listen politely, but at the end of all this, that's $2k wasted, I think.

I'm actually hoping that he just plots out plan based on asset class, and then I can insert in whichever fund I prefer, i.e., the benchmark index.
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Old 04-27-2013, 12:22 PM   #24
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I'm a bit disappointed today, after meeting with our financial adviser yesterday. He is basing everything on 1 year, 3 year, and 5 year returns, saying that fees don't matter. I'll listen politely, but at the end of all this, that's $2k wasted, I think.

I'm actually hoping that he just plots out plan based on asset class, and then I can insert in whichever fund I prefer, i.e., the benchmark index.
Would you trust the plan of an advisor that says fees don't matter?
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Old 04-27-2013, 12:52 PM   #25
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He is basing everything on 1 year, 3 year, and 5 year returns, saying that fees don't matter.
Hmmm, so fees do not matter to him huh? If that is so, would he be agreeable with eliminating them all together or rebating them to you?

Fees/commissions etc is how he is able to provide for his family. They not only matter, they are essential TO HIM.
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Old 04-27-2013, 01:11 PM   #26
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Old 04-27-2013, 03:18 PM   #27
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Any recurring expense, even a small one, matters a lot to retirement portfolios. $10 a month invested at 5% instead of going towards extra cable channels for thirty years, would mean an extra $8.4K in the retirement portfolio.

The problem with investment fees is that they are usually much larger and more insidious than a line item on a cable bill.

If you are spending $1.25K a year in fees on a 60 year portfolio, how many hours would it take you to learn to do your own investing? 50 or even 100 hours to figure out how to buy CDs, I bonds, TIPS and index funds? Even at 100 hours you could be making the equivalent of $4,641 per hour over the lifetime of your portfolio.
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Old 04-27-2013, 03:20 PM   #28
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............
The problem with investment fees is that they are usually much larger and more insidious than line a item on a cable bill.
And worse, fees didn't even used to be a line item. They just sort of got sucked off the top.
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Old 04-27-2013, 05:33 PM   #29
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The answer the OP's question, my financial advisor is with Edward Jones but I would like someone who could also advise me about taxes, not CDs or munis only.
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Old 04-27-2013, 06:27 PM   #30
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Do You Use A Financial Advisor?

In the past I would have said no... Today I'd still say no, but I'd qualify that by saying "not one that I pay for".
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Old 04-28-2013, 09:09 PM   #31
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The answer the OP's question, my financial advisor is with Edward Jones but I would like someone who could also advise me about taxes, not CDs or munis only.
You are a wealthy dude, a doctor, and you listen closely to what your advisor tells you. You are every planner/advisor's wet dream. Find a fee only planner that is a CFP or CFA that can do it all.
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Old 04-29-2013, 06:53 AM   #32
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Not as wealthy as many, many others here, which is fine with me. :-)

Nonetheless, I have been looking for a good CFP, no luck so far.
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You are a wealthy dude, a doctor, and you listen closely to what your advisor tells you. You are every planner/advisor's wet dream. Find a fee only planner that is a CFP or CFA that can do it all.
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Old 04-29-2013, 08:48 AM   #33
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Originally Posted by daylatedollarshort View Post
$250K avg annual portfolio X 60 working and retirement years X .05 annual fee = $75,000 lifetime adviser fees.

$500K avg annual portfolio X 60 years working and retirement years X .05 annual fee = $150K lifetime adviser fees.

$1M avg annual portfolio X 60 years working and retirement years X .05 annual fee = $300K lifetime adviser fees.

You can buy a lot of investing books for that kind of money. And ask questions here for free. Or buy a rental house for cash and get income every month with the money not spent on adviser fees.

$1.25K in average annual adviser fees, with another $1.25K added every year, invested for 60 years @ 5% interest = $464,078.63 according to the monkey chimp online compound interest calculator.
60 years with an advisor, are you nuts?
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Old 04-29-2013, 09:14 AM   #34
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I'm a bit disappointed today, after meeting with our financial adviser yesterday. He is basing everything on 1 year, 3 year, and 5 year returns, saying that fees don't matter. I'll listen politely, but at the end of all this, that's $2k wasted, I think. ...
You shouldn't be disappointed, you should be thankful. He has given you a very solid backing for DIY being > FA for most people. Move on with a DIY plan, and save that $2K (and probably more in expenses).

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Old 04-29-2013, 09:25 AM   #35
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And to be fair, this wasn't unexpected. It was a calculated risk, in the interest of spousal-confidence, and the spouse saw the inconsistency between the adviser's advice and what would be best for us, so arguably "mission accomplished".
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Old 04-29-2013, 08:40 PM   #36
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Friday I was talking to a friend who just met with a Financial Advisor, and he related one of my favorite bits of Doublespeak that they use:
He told him that while the charge is 1% of Assets Under Management, the fee goes down as the portfolio grows.

This is such a misleading load of cr@p. Yes the PERCENTAGE they skim off becomes smaller, but the fee keeps going UP! Saying it like they do is part of the basically dishonest nature of all the AUM chargers out there, as far as I am concerned and that have been pushing this baloney so long they do not even realize how misleading and dishonest they are being.
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Old 04-29-2013, 09:20 PM   #37
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No, never have (no brag but MBA Int'l Fin.) point is after graduated spent some years thinking about what I learned - theories - not relevant in the real world. Advisors (almost all) give the same advise: diversified portfolio / long-term. That's based on the Machlowitz theory from the 40's which requires you to disregard factors that exist in real world. Most individual investors as a result buy high / sell low. Today mutual funds are borrowing money to buy more stocks for individual investors - cash near all time low. Insiders are selling into it, at the near high, as usual. Financial advisors are making money though.
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Old 04-29-2013, 09:26 PM   #38
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Not as wealthy as many, many others here, which is fine with me. :-)

Nonetheless, I have been looking for a good CFP, no luck so far.
I've not used them, but friends in Cincy say Foster & Motley are good CFP's. If not convenient, perhaps they can direct you.
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Old 04-29-2013, 10:39 PM   #39
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I think if a person is interested in personal finance, and they enjoy learning, researching, and are discipline, then they can do a good job managing their own portfolio.

On the other hand, if one doesn't find it interesting, and they don't have great discipline, then a financial advisor may be very worthwhile, especially if it means saving and investing (even with higher fees), versus not saving/investing at all.
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Old 04-30-2013, 08:25 PM   #40
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The Mass Affluent are More Self-Directed Investors. Now at 44% for NW > 1M, according to;
http://www.millionairecorner.com/art...cted-investors
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