Financial Advisor fees etc.

[kgtest]

It's your future. Did you take an active role in your future when you were in college learning all that BS?

Basically I got to the point I couldn't afford to NOT know what I was doing. My future is quite valuable. It started with me talking to a FA and then I found this forum, and less than 6months later the rest is history.

1. Setup a spreadsheet
2. Log into all your accounts, update your benificiaries and record your current investments and allocations in a spreadsheet
3. Once you have record, you have a benchmark. You will feel a lot better once you reach this step. Trust me I felt great.

6months ago I wasn't able to tell you my wife and I's net worth, however now I can tell you at any given moment how much we gained or lost in the market that day, week or YTD, I can tell you my A/A (asset allocation) and I could tell you what % of my portfolio is in indexed international growth funds...none of which I understood 6months ago. Owning your own spreadsheet and data comes a long ways, I am telling you!

 

[Hermit]

I put some money in Vanguard and then had them do a Financial Plan for me. I spent an hour or so on the phone with them answering questions about my finances and my financial knowledge. They created a report that told me what money to move where. They even moved the money for me when possible. I had to move my own 401k money. About 4 very low cost funds total. The advisory fee for the plan was $200. The bummer was no "free" lunch.

 

[wolf]

Thanks for all the good posts. You've certainly made me think!

I would say this in response to those who posted that "I should do it myself"

For the time I've used them AND for the foreseable future....(5-10 years?) I believe I'm probably fine with the status quo. The main reason is I just didn't have the interest in learning about all the ins and outs of doing it myself with everything else going on in our lives.

Not to mention, I am scared of my shadow when it comes to investing so I would be a nervous wreck and the stress wouldn't have been worth it. I personally feel that I'm a long ways off from being able to manage my own $. A long ways.


I do think that in 10 years or so if I have my biz on even more cruise control than now, I will jump in and learn and take a more active role in our investments.

For now, I think I just feel most comfortable leaving it up to someone else. I know that doesn't sit well with some and some cannot fathom how I could leave it up to someone else or pay that much out for someone to do something that they could do in their sleep. I get it.

It's like hiring a cleaning lady, (Ok, no it isn't
Have heard


but hopefully you get my point) YES, I could save a lot each year by simply vacuuming and dusting for myself and it would be done RIGHT, but it is something that I would rather someone else do so my time and effort is freed up elsewhere.

My time is pretty valuable (as is everyones) and if I have time to do other things like cleaning or investing or playing golf, I always look at how much $ I could have made at my real job if I had used that time differently (residual commission based and self employed)

Thanks again. This board is interesting.

Have seen your response from my friends. They are concerned, but give the same reasons you've given why they stay with a FA.

Very scary. A lot of excellent posts, with solid suggestions and examples.
Good Luck.

 

[comicbookgujy]

1% is typical. But you might be paying more. The Financial Advisor or Wealth Advisor might have you invested in Mutual Funds, so you might be paying another 1% for the Mutual Fund, so now you're really paying 2%. And if they are really greedy, they might stick you in some F class share or some load fund. I have seen some real greedy Advisor sticking people into load fund and annuities.

 

[Buckeye]

Thanks for all the good posts. You've certainly made me think!

I would say this in response to those who posted that "I should do it myself"

For the time I've used them AND for the foreseable future....(5-10 years?) I believe I'm probably fine with the status quo. The main reason is I just didn't have the interest in learning about all the ins and outs of doing it myself with everything else going on in our lives.

Not to mention, I am scared of my shadow when it comes to investing so I would be a nervous wreck and the stress wouldn't have been worth it. I personally feel that I'm a long ways off from being able to manage my own $. A long ways.


I do think that in 10 years or so if I have my biz on even more cruise control than now, I will jump in and learn and take a more active role in our investments.

For now, I think I just feel most comfortable leaving it up to someone else. I know that doesn't sit well with some and some cannot fathom how I could leave it up to someone else or pay that much out for someone to do something that they could do in their sleep. I get it.

It's like hiring a cleaning lady, (Ok, no it isn't but hopefully you get my point) YES, I could save a lot each year by simply vacuuming and dusting for myself and it would be done RIGHT, but it is something that I would rather someone else do so my time and effort is freed up elsewhere.

My time is pretty valuable (as is everyones) and if I have time to do other things like cleaning or investing or playing golf, I always look at how much $ I could have made at my real job if I had used that time differently (residual commission based and self employed)

Thanks again. This board is interesting.

Make sure you actually write the check to whoever is managing your money. Don't let them make an automatic withdrawal out of your funds under management or your checking account. Your fees are probably quarterly so you will be doing this 4 times a year.

This will make you fully aware of how much money you are giving them every year. The impact is blunted when the adviser is allowed to make an automatic withdrawal.

 

[2B]

If you really feel you have to have someone giving you advice, I suggest first to move a bunch of money to Vanguard and get a plan from them. It's free if you have over $1MM. If you don't feel comfortable with using the next guy in line from Vanguard, find a fee only advisor that doesn't sell anything and that works on an hourly rate. For probably less than $500 or $1000, you will get a good, cold eyes review of everything going on in your life. They can look at your insurance coverage, estate plan and other non-financial assets in addition to looking over your investment portfolio. If you don't need all the other stuff, I'd go with Vanguard. Of course, I really recommend you do it yourself.

The bottom line is that you are providing for your FAs retirement and lifestyle at the expense of your own. You are probably reducing your eventual retirement income by over 25% or extending the time required to be FI. Managing your own investments takes minutes per year. In many ways you will be better off if you don't know too much and just stay with a simply index portfolio.

 

[F4mandolin]

Or.......just stick it in something like Wellington and forget about it....