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Old 01-19-2012, 09:50 AM   #61
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My test questions involved 'dumb beginners' annuity questions to see whether they would look at my circumstances, or take the dangling candy and run. Other questions involved asset allocation and fees for mutual funds. "Yum, candy!!!" was the result, even to smirking to my face while offering me the worst possible combination, in one case.
What kind of "dumb beginners annuity questions" did you ask? Was it kind of like putting your title and checkbook in your shirt pocket and walking into a car dealership and saying you are there to buy a car?
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Old 01-20-2012, 09:34 AM   #62
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Today's Dilbert offers another perspective on financial advisors:

Dilbert comic strip for 01/20/2012 from the official Dilbert comic strips archive.

What are the odds that Wally will be swindled out of his one billion dollars?
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Old 01-20-2012, 10:58 AM   #63
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My husband and I are a few months away from his retirement. We have decided to consult with a financial planner to make sure we have all our ducks in a row. We have limited financial planning knowledge and have a short window to accept or decline my husbands early retirement offer. We chose this planner on recommendation from a retired couple that have been working with and are pleased with him. This first meeting is at no charge to us. My questions for this forum are: what should we ask him to help us decide if he is the planner that will do a good job? What credentials should he have? What fees should we expect for his advice and potentially management of our assets? How do we know if he has our best interests at mind? Anything else that we need to find out?

thanks for any insight, advice
Infoseeker: I would suggest the following:
1) Who is your typical client? (you're looking to be part of a client base that is similar to your situation)
2) How many clients do you have? (You want enough to indicate experience but perhaps not so many that service may suffer)
3) What is your educational background and credentials? (look for finance or similar degree and CFP)
4) How do you get paid? (fee-only is the only right choice- not fee-based, commission, or other. If any compensation is paid to the advisor by anyone other than you, the client, then run. If they want to sell you something, run.)
5) Are you "fee-only" in the form of an hourly rate or do I have to turn over my portfolio for you to manage? (both can be fee-only. Hourly can be anywhere from $125 to $400 and for portfolio management fees can be as high as 2%. You shouldn't have to pay anyone more than 1% and less is better assuming they are well-qualified, especially if you have over $1 million).
6) If you are hourly, how do I implement my plan? Can you help me buy the investments? (if they say they can sell you some funds, they are not really fee-only. they should be able to give you specific advice regarding what low cost funds and how to go about buying them at a place with Schwab or Vanguard)
7) Can I speak to some of your clients? (for privacy reasons they can't hand out names without permission- if they do, run. However, they should be willing to contact a few of their clients and get back to you)
8) Are you a "comprehensive" planner or do you have a specific area of expertise? (a good planner should be at a minimum well-versed in areas of cash management, tax, retirement, investments, insurance and understand the basics of estate planning- being an "expert" in investments isn't sufficient.)
9) What is your philosophy regarding investment strategies and management? (a good answer would focus on using low-cost investments, managing risk in the portfolio, maintaining an allocation consistent with your risk profile and need for retirement income. Any promises of high returns or guaranteed results are unrealistic)
10) What are some ways we can ensure that we don't outlive our money? (An experience planner will talk about safe withdrawal rates, managing risk and the like. An inexperienced planner will talk about big investment returns or stare at you like you have two heads)

I'm sure there are many more, but those were the first 10 I could come up with. Good luck!
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Old 01-20-2012, 12:52 PM   #64
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FWIW Elvis infoseeker hasn't checked in since last Sunday...we must have scared her away.
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Old 01-20-2012, 01:55 PM   #65
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FWIW Elvis infoseeker hasn't checked in since last Sunday...we must have scared her away.
All that typing for nothing?? I had to ice my fingers after that last post!
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Old 01-20-2012, 02:04 PM   #66
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All that typing for nothing?? I had to ice my fingers after that last post!
That question will be asked again. Just bookmark it and then link to it when it comes up. Better yet, next time someone asks, cut & paste and take credit for a thoroughly original response.
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Old 01-20-2012, 02:09 PM   #67
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That question will be asked again. Just bookmark it and then link to it when it comes up. Better yet, next time someone asks, cut & paste and take credit for a thoroughly original response.
We call that a "wiki"...
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Old 01-20-2012, 03:10 PM   #68
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This discussion is a good one and similar ones are occurring as I type over at the bogleheads forum.

However, the 2 frequent financial pros at bogleheads are simply saying (at least from my perspective) "You want to pick a financial planner like me."

Finally, something on the forum for the folks who do not want to do-it-themselves might be written up in a wiki, such as the one maintained at the BH site.
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Old 01-20-2012, 03:42 PM   #69
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5) Are you "fee-only" in the form of an hourly rate or do I have to turn over my portfolio for you to manage? (both can be fee-only. Hourly can be anywhere from $125 to $400 and for portfolio management fees can be as high as 2%. You shouldn't have to pay anyone more than 1% and less is better assuming they are well-qualified, especially if you have over $1 million).
This is where I rebel against the whole idea of a financial planner. My plan is based on a 4% annual return, I'm not going to give 25% of that up to pay a planner who probably can't do any better than a sensible individual who takes the time to read a few Boglehead wikis.
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Old 01-20-2012, 03:46 PM   #70
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Today's Dilbert offers another perspective on financial advisors:

Dilbert comic strip for 01/20/2012 from the official Dilbert comic strips archive.

What are the odds that Wally will be swindled out of his one billion dollars?
I saw this Dilbert this morning and wondered if anyone else had!
Attached Images
File Type: gif 148769.strip.gif (53.3 KB, 6 views)
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Old 01-20-2012, 04:14 PM   #71
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This is where I rebel against the whole idea of a financial planner. My plan is based on a 4% annual return, I'm not going to give 25% of that up to pay a planner who probably can't do any better than a sensible individual who takes the time to read a few Boglehead wikis.
Agreed, assuming we're talking about a person who is really willing and able to put in the time. Clearly, for you and most others on this forum, financial planners are unnecessary but there are those that are better off paying some fees to help ensure that their long-term financial security doesn't blow up. Also, it doesn't have to cost has 25% of one's annual return to get this guidance for those that are more self-directed and wish to simply buy a few hours of a planner's time each year. It's usually pretty easy to recover $1,000 of added expense through tax planning, investment rebalancing and overall risk management.
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Old 01-20-2012, 04:24 PM   #72
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This is where I rebel against the whole idea of a financial planner. My plan is based on a 4% annual return, I'm not going to give 25% of that up to pay a planner who probably can't do any better than a sensible individual who takes the time to read a few Boglehead wikis.
No need to rebel, nun; nobody is trying to force you to do anything. Make your own choice and go with it. Peace.

For the life of me, I simply do not understand why this is such a contentious topic here.

And ... 1% aum is waaay overpaying for all but the smallest accounts.
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Old 01-20-2012, 04:40 PM   #73
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I find all this quite humorous........
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Old 01-20-2012, 04:45 PM   #74
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I find all this quite humorous........
+1. It's not contentious at all to most, some members enjoy their rants like to restate their views often...
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Old 01-20-2012, 05:21 PM   #75
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This topic is of interest to me since I'm in somewhat the same predicament but I hesitate in posting to this thread since I noticed there are a few sharp teeth wondering around. Maybe I should start my own thread, but I need to find a few bouncers first.

Bbbam1, you know of any?
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Old 01-20-2012, 05:26 PM   #76
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What kind of "dumb beginners annuity questions" did you ask? Was it kind of like putting your title and checkbook in your shirt pocket and walking into a car dealership and saying you are there to buy a car?
Here is the problem with your smirking, self-satisfied answer: car dealers are not supposed to be fiduciaries to their customers, while advisors are. The whole premise that it is OK for clients to be banged in the bakehole by an advisor selling them overpriced crap just because the client doesn't know any better is EXACTLY what is wrong with the financial sales advice industry.
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Old 01-20-2012, 08:11 PM   #77
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Here is the problem with your smirking, self-satisfied answer: car dealers are not supposed to be fiduciaries to their customers, while advisors are. The whole premise that it is OK for clients to be banged in the bakehole by an advisor selling them overpriced crap just because the client doesn't know any better is EXACTLY what is wrong with the financial sales advice industry.
There are also fewer conflicts of interest when buying a car.

If I invest in X, Y, Z and recomend A, B, C, there better be a good reason why.
If a mutual fund happens to own a stock of a company I used to work for, is that a conflict? What if I own stock in that company?

Those are the easy ones to spot. Most are much tougher and more gray.
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Old 01-20-2012, 08:12 PM   #78
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This topic is of interest to me since I'm in somewhat the same predicament but I hesitate in posting to this thread since I noticed there are a few sharp teeth wondering around. Maybe I should start my own thread, but I need to find a few bouncers first.

Bbbam1, you know of any?
Its the internet, you need to separate the fact from the fiction and the fact from the opinion.
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Old 01-20-2012, 10:29 PM   #79
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Here is the problem with your smirking, self-satisfied answer: car dealers are not supposed to be fiduciaries to their customers, while advisors are. The whole premise that it is OK for clients to be banged in the bakehole by an advisor selling them overpriced crap just because the client doesn't know any better is EXACTLY what is wrong with the financial sales advice industry.
And there are about 700,000 or so "licensed reps" in the USA. Almost 500,000 are so-called "insurance agents, or "planners", who have a Series 6 license if that, a fair number just have a life insurance license. Most reps are not fiduciaries, although they try to talk the talk. Some of us are fiduciaries......... I work with a moderate size RIA. We have 2 CFAs on staff, we only use investment policy statements, our team has 2 CFPs and and an MBA grad from Tuck. There are only about 200,000-250,000 people in the USA that hold a Series 7 and a Series 66 license. Since you are a part of the very industry you denounce, that seems a little self-serving itself.........
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Old 01-20-2012, 10:36 PM   #80
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This topic is of interest to me since I'm in somewhat the same predicament but I hesitate in posting to this thread since I noticed there are a few sharp teeth wondering around. Maybe I should start my own thread,but I need to find a few bouncers first.

Bbbam1, you know of any?



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