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Old 08-25-2007, 05:35 AM   #21
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What about fee-only (not fee based) advisors, who are not commissioned and receive no kick-backs?
I am a rabid do it yourselfer. I will concede there are places "experts" and/or "professionals" can add value. Your wills/POA/living wills should go through an attorney. If you have $2-5MM you should consider an estate attorney. Over $5MM, I think it's a necessity. If you have complicated taxes, you might need a CPA; but if you do, you'd be better off simplifying your life so the standard tax software works for you.

As for investing, this is another place where you can save a few grand by educating yourself. No FA is going to get you into those "winner" stocks and get you a safe 2X or 3X market returns (without losses). If he could he'd be managing a mega pension fund and wouldn't even be available to you. But, the big pension funds don't have these super stars either because they don't exist. Pension funds and endowments are primarily driven by asset allocation. Their size makes them able to operate with very low costs when measured as a % of assets.

If your life is complicated, a FA can help you with questions about how much and what kind of insurance to have. The FA can also be the "bad guy" if you happen to be managing a trust for an unruly, ungrateful mob.

However, most of us mortals can have simple lives. Our insurance needs are straightforward and life planning can really be done successfully after reading a few personal finance books.

So, in summary, my answer is NO, NO, NO......
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Old 08-25-2007, 08:18 AM   #22
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See my post above. Essentially my guy (for me) is a fee-only advisor. Yes, he probably gets a coupla bucks from the commission on each transaction (or maybe not, since he now has converted my account to 'electronic' and I buy and sell by myself at lower commissions than before, (with suggestions from him)).
Then he would not be a fee-only advisor. He would be fee based. Fee only advisors belong to a group that has a strict code of ethics and commissions are not allowed. Ask for your guy to put in writing that he is fee only not fee based. You'll find out if he's scamming you about his fees or not.

Home Page - NAPFA - The National Association of Personal Financial Advisors
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Old 08-25-2007, 03:03 PM   #23
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Then he would not be a fee-only advisor. He would be fee based. Fee only advisors belong to a group that has a strict code of ethics and commissions are not allowed. Ask for your guy to put in writing that he is fee only not fee based. You'll find out if he's scamming you about his fees or not.

Home Page - NAPFA - The National Association of Personal Financial Advisors
I think you're missing my point. He IS an Ameriprise associated FA. He is interesting in that he does not 'tout' Ameriprise recommended products (to me). He has the flexibility to get 'paid' in various ways. For all intents and purposes he ACTS like a fee-only advisor to me. He is even doing an analysis of ETFs vs. Vanguard MFs for me. He charges me a flat fee per year for consultation. So for ME, he is a fee-only advisor ... yes I agree, he does not 'belong to the club' and is not certified or whatever they have.
He never represented himself as a fee-only advisor. I think he thnks that he might lose me as a customer if he pushed his products, so we mutually agreed that we would go to this yearly fee. So a grand a year is enough for him to spend time helping me ... and I will continue to do this until I see no value. My goal is to pay attention to this LESS in retirement, not more. Others on this board do this as a hobby, which is great. I choose not to.
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Old 08-25-2007, 07:11 PM   #24
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Corporateburnout - I am familiar with Evanson. The fees stated on the website are true. In essence, you are paying by the hour for service because you pay the same fee for $1 million as you do for $10 million.

I wanted access to DFA funds and I believe this is a cost effective way to do it. Send an email through their website. Dr. Evanson will call you personally to discuss what Evanson does and whether it's a fit for you. He provided me a list of 11 potential references and I contacted two (one MD and one PhD in Mathematics) who had been with Evanson for about 9 years. Both provided strong recommendations. The MD said Evanson had saved him enough money in fees to send his kids to college.
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Old 08-25-2007, 10:08 PM   #25
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Seems to me that there is a difference between a planner and an adviser. A planner may help with AA, insurance needs, estate/tax planning etc. An advisor tells you where (as in what stocks/MF/FI/) s/he thinks your money should go.

I might be willing to pay a planner but not an advisor.
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Old 08-26-2007, 11:18 AM   #26
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I have approached a FP once and was sent packing when they found out about my 'inherited' trust(s). I am a DIY'er (with money at least -- let's not talk about home improvement projects). My ego would have me believe I can do everything the best way. Experience shows this is not true. For people like me, perhaps the idea to see a fee only planner on a case by case basis would be good ... to have that 2nd opinion before major (and especially expensive or irrevocable) decisions.
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Old 08-26-2007, 11:37 AM   #27
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For people like me, perhaps the idea to see a fee only planner on a case by case basis would be good ... to have that 2nd opinion before major (and especially expensive or irrevocable) decisions.
The problem I see with this is that they don't charge "by the hour" for a specific issue like a lawyer or CPA. They want a flat fee of several thousand dollars to give you a computer generated printout. If you don't take too much of their time, they will chat about the specific issue you may have wanted input on above.

FWIW, I'd feel happier posting my question on this forum and seeing what input I'd get for free. There are a lot of very knowledgeable people here and few FAs that provide regular input.
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Old 08-26-2007, 04:32 PM   #28
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Seems to me that there is a difference between a planner and an adviser. A planner may help with AA, insurance needs, estate/tax planning etc. An advisor tells you where (as in what stocks/MF/FI/) s/he thinks your money should go.

I might be willing to pay a planner but not an advisor.
You may make that distinction, but I am not sure any of the 'professionals' do. The one question I always ask is 'how do you make your money from this?' good luck in your quest
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Old 08-26-2007, 04:37 PM   #29
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The problem I see with this is that they don't charge "by the hour" for a specific issue like a lawyer or CPA. They want a flat fee of several thousand dollars to give you a computer generated printout. If you don't take too much of their time, they will chat about the specific issue you may have wanted input on above.

FWIW, I'd feel happier posting my question on this forum and seeing what input I'd get for free. There are a lot of very knowledgeable people here and few FAs that provide regular input.
I agree with your comments. The only caveat is that you need to be able to separate the good advice from the bad. You will often find conflicting opinons and they will seem to have plausible logic behind each of them.
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Old 08-26-2007, 05:20 PM   #30
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and why don't they charge by the hour ? I think a lot more people would use them if they did .I was looking for a second opinion and called several they wanted a ridiculous amount to look at my portfolio .I ended up just taking a financial planning course for $82.00 and the professor answered all my questions .
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Old 08-27-2007, 04:55 AM   #31
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and why don't they charge by the hour ? I think a lot more people would use them if they did .I was looking for a second opinion and called several they wanted a ridiculous amount to look at my portfolio .I ended up just taking a financial planning course for $82.00 and the professor answered all my questions .
I think it may be negotiable. If I had pressed it, I probably could have got an hourly rate. If I break it down, I have over the years averaged 3 meetings of 3 hours each. So that comes to $111.11 per hour. I'm ok with that. The price needs to be low enough where I think I am getting value and large enough where he thinks it is worth his while to help me. And he does do some pre-meeting work ... sooooo
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Old 08-27-2007, 08:29 AM   #32
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I think you're missing my point. He IS an Ameriprise associated FA. He is interesting in that he does not 'tout' Ameriprise recommended products (to me). He has the flexibility to get 'paid' in various ways. For all intents and purposes he ACTS like a fee-only advisor to me. He is even doing an analysis of ETFs vs. Vanguard MFs for me. He charges me a flat fee per year for consultation. So for ME, he is a fee-only advisor ... yes I agree, he does not 'belong to the club' and is not certified or whatever they have.
He never represented himself as a fee-only advisor. I think he thnks that he might lose me as a customer if he pushed his products, so we mutually agreed that we would go to this yearly fee. So a grand a year is enough for him to spend time helping me ... and I will continue to do this until I see no value. My goal is to pay attention to this LESS in retirement, not more. Others on this board do this as a hobby, which is great. I choose not to.
Ameriprise has THREE business models, the CFP's can charge a FLAT yearly fee for "consulting", they can run a fee-based/commission business, or they can run both. Most FA's I know try to run both. However, the gravy train of charging clients TWICE is under scrutiny and may go away..........
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Old 08-27-2007, 08:32 AM   #33
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and why don't they charge by the hour ? I think a lot more people would use them if they did .I was looking for a second opinion and called several they wanted a ridiculous amount to look at my portfolio .I ended up just taking a financial planning course for $82.00 and the professor answered all my questions .
Because most hourly planners have to supplement their income or they are out of business.........

Hourly CFP's can't charge fees like attorneys.......
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Old 08-27-2007, 09:06 AM   #34
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I work at a fee only firm, as a portfolio manager not a planner. The planners can charge by the hour. I think the hourly rate is somewhere around $200 to $250 for planner's time and $40 or $50 for their assistants time. Usually they quote a firm number based on a project instead of an hourly rate. We really don't make any money on planning. Their fees really just cover the salary and expenses of the planners. The real money is in managing assets for a percentage based fee. The planners are good at servicing those clients and bringing in new clients.
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Old 08-27-2007, 09:56 AM   #35
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What about Garrett Planning network folks? Aren't they hourly?

FD, don't call them CFPs unless they are!
You'll sully the rep of good folks like that!

....still waiting another three weeks for my results!
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Old 08-28-2007, 07:42 AM   #36
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The problem I see with this is that they don't charge "by the hour" for a specific issue like a lawyer or CPA. They want a flat fee of several thousand dollars to give you a computer generated printout. If you don't take too much of their time, they will chat about the specific issue you may have wanted input on above.

FWIW, I'd feel happier posting my question on this forum and seeing what input I'd get for free. There are a lot of very knowledgeable people here and few FAs that provide regular input.

1. Your first comment simply isn't true. I don't know a single firm that isn't going to sit down with you for an hourly fee. Ours does it all the time. Expect to pay $175 - 300/hr and depending on your issues it should take 1-3 hours. 99.9% of firms aren't hourly fee only because the economics simply aren't there to make it work.

2. Free advice is nice, but it's true that you get what you pay for. I wouldn't flatter yourself by indicating that posting some questions on an internet forum is the same as working with a professional.
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Old 08-28-2007, 08:51 AM   #37
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1. Your first comment simply isn't true. I don't know a single firm that isn't going to sit down with you for an hourly fee. Ours does it all the time. Expect to pay $175 - 300/hr and depending on your issues it should take 1-3 hours. 99.9% of firms aren't hourly fee only because the economics simply aren't there to make it work.

2. Free advice is nice, but it's true that you get what you pay for. I wouldn't flatter yourself by indicating that posting some questions on an internet forum is the same as working with a professional.
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Old 08-28-2007, 05:49 PM   #38
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1. Your first comment simply isn't true. I don't know a single firm that isn't going to sit down with you for an hourly fee. Ours does it all the time. Expect to pay $175 - 300/hr and depending on your issues it should take 1-3 hours. 99.9% of firms aren't hourly fee only because the economics simply aren't there to make it work.

2. Free advice is nice, but it's true that you get what you pay for. I wouldn't flatter yourself by indicating that posting some questions on an internet forum is the same as working with a professional.
You say my first point isn't true by saying every firm including your firm will do it but then say 99.9% of the firms won't. Something isn't consistent however I'll be happy if I'm always 99.9% right.

I've found that there is great wisdom in the "free advice" on this forum. It gives me something to reflect on and to challenge my original opinion. Some I discount quickly and some takes a little longer. There have been numerous situations where a new idea was considered better and that's the way I went. I don't think I would be any different if I paid some FA a $1000 to tell me his opinion. Ultimately, I'd have to evaluate it and decide for myself on the path forward.
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Old 08-29-2007, 07:56 AM   #39
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2. Free advice is nice, but it's true that you get what you pay for. I wouldn't flatter yourself by indicating that posting some questions on an internet forum is the same as working with a professional.
Not always true. Not at all.

I could make a long list of things I needed advice on, and I got far better advice free from the internet than I got from the 'pros'.

Some things require a professional, and it is penny-wise-pound-foolish to try to avoid it. But not for everything, and IMO, far too many people who use an FA would be better off doing it themselves. It ain't rocket surgery for most people, and in many cases the fees they pay just get them in poor investments.

There are exceptions, but as I alluded to earlier, the same people who choose an FA because they feel they don't know enough to DIY also do not know enough to judge the competency of the FA.

Either way, I think you need to educate yourself, or rely on luck.

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Old 08-30-2007, 10:09 AM   #40
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You say my first point isn't true by saying every firm including your firm will do it but then say 99.9% of the firms won't. Something isn't consistent however I'll be happy if I'm always 99.9% right.
Please read my post again. I said that 99.9% of firms aren't HOURLY FEE ONLY.
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