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How Do I Find a Hourly Fiduciary CFP?
Old 03-18-2014, 08:22 PM   #1
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How Do I Find a Hourly Fiduciary CFP?

We are two years out from retiring and DW wants to double check that we are on track and wants us to see a CFP in the Chicago area, affirm our AA. We've also seen our Fidelity rep, CPA and the teachers pension consultant. We had met a very competent CFP last year but he won't do hourly, he only wants clients who accept his "plan" and meet regularly. So...

I see a lot of CFP advisors around but how do you find one who is a true fiduciary, who has no interest to sell anything and has the Monte Carlo calculator? Here's what the Wall Street Journal says about fiduciaries:

"The planner has pledged to act in a client’s best interests at all times. Investment professionals who aren’t fiduciaries are often held to a lesser standard, the so-called sustainability standard. That means that anything they sell you merely has to be suitable for you, not necessarily ideal or in your best interest. This point is critical, and should be a deal breaker if a prospective planner is not a fiduciary."

So is acting as a fiduciary, does that mean they have to sign a separate paper saying they will act as our fiduciary? Aren't they already acting as one if I say I will not be buying anything from them? Lastly, Fidelity's calculator is very sophisticated running various scenarios, including me dying at various points. Doe the typical CFP have the same level of calculator?

Thanks for your advice.
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Old 03-18-2014, 08:41 PM   #2
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I'd say go for a fee-only planner and ask if the planner does an hourly.

Fee-Only Financial Advisors Home - NAPFA - The National Association of Personal Financial Advisors
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Old 03-18-2014, 10:17 PM   #3
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This topic has been discussed extensively on the forum. I think it was Midpack who made the statement that by the time you've done enough research to know whether a CFP you have interviewed may be qualified, you will no longer need them.

If you do choose to seek one, make sure you identify what specifically you want them to be an expert in. Is it just a sanity check to see if you have enough to retire? Do you want advice on when to take social security? Expertise on long term care insurance? Estate planning? Tax planning? Investment advice? Budgeting?

Different CFPs will have different areas of expertise, but nobody will be an expert at all of these topics, so make sure you know what's important to you before choosing one.
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Old 03-18-2014, 10:47 PM   #4
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Recently read an artical in USA Today (hey- I was traveling, bored, and it was free) and an FA was saying it took 17 individuals with various areas of expertise a total of 40 hours to produce an initial plan for the typical new client. The number of hours and the number of people both seem high to me, unless they are digging through shoeboxes of old statements.
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Old 03-19-2014, 12:47 AM   #5
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Recently read an artical in USA Today (hey- I was traveling, bored, and it was free) and an FA was saying it took 17 individuals with various areas of expertise a total of 40 hours to produce an initial plan for the typical new client. The number of hours and the number of people both seem high to me, unless they are digging through shoeboxes of old statements.
That estimate (40 hours) jives with my experience. There was quite a lot of detailed input which required digging into statements, there were several supplementary questions, followed by validation with me and two more drafts. By the end of this process I understood the origin of all the numbers. They used a comprehensive modeling program that accounted for taxes. But I wish I could just buy the program and input the data myself so I could do more sensitivity analyses, e.g. What if the tax laws change? Black swan? Etc.etc.
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Old 03-19-2014, 07:55 AM   #6
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Garrett Planning Network » Welcome To Garrett Planning Network
This is a network of hourly planners. I use one in Seattle once in a while.
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Old 03-19-2014, 08:10 AM   #7
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OP here. Yes I know all the basics of AA, etc. What I need help with are "scenarios" because we are in a unique and possibly dangerous situation, as I have posted previously for advice:

My wife is a teacher receiving a government pension in IL so if I die first, and I am sure I will, she gets ZERO of my social security. So...we are looking into buying a Deferred Income Annuity from MassMutual that will kick in when I hit my early 70's. There are many variables as to how much to buy, when it kicks in, etc. My brain is not big enough to do this type of math and the calculators don't have these options of sudden drop off in revenue if one spouse dies and the other gets none of the SS. At least I didn't see these types of options in FireCalc and the rest.

So...my slogan in 33 years in business is Fidis Nomi (Trust No One). That's why I want to learn how to find a fiduciary rather than a regular CFP, or...how does a CFP become your fiduciary, which is my original post.

As to Garrett, the very impressive CFP I met that does not want to do hourly, the reason I rejected his plan (which would have cost over $3K), he was a member and I researched them. The CFP pays dues and gets access to their software that prints out very impressive folders and I felt he would just "plug in" our numbers. I'd like to find a CFP with an accounting background who is not affiliated with an org and is my fiduciary.

Easy to find a CFP but what do I have to do to make them my fiduciary? Is there are separate contract for them to sign?
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Old 03-19-2014, 08:30 AM   #8
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As to Garrett, the very impressive CFP I met that does not want to do hourly, the reason I rejected his plan (which would have cost over $3K), he was a member and I researched them. The CFP pays dues and gets access to their software that prints out very impressive folders and I felt he would just "plug in" our numbers. I'd like to find a CFP with an accounting background who is not affiliated with an org and is my fiduciary.
I don't think what you are looking for exists. When you pass the CFP, you agree to a code of ethics that you will act in a fiduciary interest.......kind of a Hippocratic oath for advisors.

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Easy to find a CFP but what do I have to do to make them my fiduciary? Is there are separate contract for them to sign?
I doubt such a contract exists. Such a document would make it very easy to sue them with no recourse, for something as arbitrary as "I just don't think he had my best interest at heart"..........and his E&O company would probably drop him or her if they did enter into such an agreement. Caveat Emptor..........
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Old 03-19-2014, 08:34 AM   #9
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I don't think what you are looking for exists. When you pass the CFP, you agree to a code of ethics that you will act in a fiduciary interest.......kind of a Hippocratic oath for advisors.



I doubt such a contract exists. Such a document would make it very easy to sue them with no recourse, for something as arbitrary as "I just don't think he had my best interest at heart"..........and his E&O company would probably drop him or her if they did enter into such an agreement. Caveat Emptor..........
+1, I have never heard of an hourly contract with that sort of thing. E&O would have a fit. No benefit to the advisor in that kind of arrangement.
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Old 03-19-2014, 08:48 AM   #10
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My wife is a teacher receiving a government pension in IL so if I die first, and I am sure I will, she gets ZERO of my social security. ... My brain is not big enough to do this type of math and the calculators don't have these options of sudden drop off in revenue if one spouse dies and the other gets none of the SS. At least I didn't see these types of options in FireCalc and the rest.
You can model this situation in FireCalc and the rest. I have a similar situation as I will not receive any of my H's pension after his death and he will probably die earlier due to various issues.

You can model the SS as if it were a pension with no survivor benefit. In FireCalc use the other income tab and make one line for pension income when it starts and one line as an off chart spending when it ends. Do not use the SS fields at all. This is also easy to do in Quicken and in Fidelity RIP. I really think you do not need to use a planner and can model this yourself.
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Old 03-19-2014, 08:58 AM   #11
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Typically advisors will only take on the fiduciary status when they have an ongoing relationship with you accompanied by an ongoing fee such as a wrap fee. It would not make sense for someone to take on fiduciary status when they may never see you again (after they have given you the plan for $3000 or whatever.) The suitability (not sustainability) rule more or less says that the advisor has to inquire into all appropriate circumstances and give you a recommendation (and usually an alternative) that fits within those circumstances at that moment in time. The fiduciary relationship is ongoing, which is why you are going to be hard pressed to find someone who will agree to one if they only meet with you (and get paid by you) once
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Old 03-19-2014, 10:23 AM   #12
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Garrett Planning Network » Welcome To Garrett Planning Network
This is a network of hourly planners. I use one in Seattle once in a while.
I went through Garrett to get a second opinion on our plan. The planner had a law degree and had passed the CFP exam on her first attempt. She was personable and knowledgeable.

The plan we received was so full of errors that I received a full refund from her.
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Old 03-19-2014, 07:05 PM   #13
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Garrett Planning Network » Welcome To Garrett Planning Network
This is a network of hourly planners. I use one in Seattle once in a while.
I tried someone from this group in my area. I explained I was looking for advice and wanted an hourly rate. I was told they had hourly rates of $150 and could look at what I was doing and see if they could help/improve my plans. I was told the consultation was free but to fill out the forms that they would be sending in an email and bring with me to meeting. When I received the email, it was requesting all financial information and my fee would be $2,000. to $10,000. Even at $150 an hour($2000 is 13 hrs of work!!!) I don't have that much financial stuff.and practically no debt. I assumed that a financial advisor would know all the ins and outs of retirement so it wouldn't take that long. He should know the questions that I don't even think to ask!!
I got a recommendation from my tax accountant for an advisor that they like. They said this person doesn't try to sell them things so I'm gathering my stuff and the rate is $150 an hour
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Old 03-19-2014, 08:24 PM   #14
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I was going to say that if 40hrs is the reasonable amount of time to sift thru a client's financial, insurance, tax, and estate data and the rate was $100/hr - that is $4000 for a snapshot analysis and recommendation.

The quandary is the supposition that they are an 'expert' in their field(s) - esp in regards to tax strategy, retirement planning, etc so their time is worth the coin, yet the resulting analysis is only a snapshot for the client's situation at that moment, so the next year things could have changed.

The downside to going it alone is that, I am not a CPA or tax expert, nor do I play one on tv, nor do I have the inclination to want to be - so there is value, to me, to have a 'pro' do the analysis and give me recommendations as they are up to date.

For instance, I found out today from our CPA doing our taxes this year there is a 20% LTCG bracket for 2013. Frack.....

Maybe there is value in having a good fudiciary/CPA/CFP give a 'sanity check' to our situation before pulling the trigger to retire.
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Old 03-19-2014, 08:57 PM   #15
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Could not agree more that after digging out all your financial info & walking though it with a good fee-only CFP most reasonably intelligent folks could re-do their own FP a few yrs down the road. Reality is most FP's are simply generic corporate plug-in SS's with a few mods tailored to specific client needs/wants. NO ONE can fully predict future returns of various investments, nor future tax changes (US,state, & local), nor Black Swan events (global or personal). And I have seen no independent evidence that private, proprietary 'Monte Carlo' investing outcome programs are better than good 'public use' programs like Firecalc. That said, I also agree it's a smart idea to have a FP done prior to retirement by a solid fee-based independent CFP...if only for piece of mind you get from a trusted 2nd opinion.
But hiring the best CFP to devise the best FP does NOT save you from living with the consequences of severe Black Swan events. IMHO- Refusing to take an ongoing interest in one's FP (for whatever reason) is like refusing to check whether the stoplight is green or red before proceeding into the intersection. It's possible to waltz through or get killed whatever the stoplight shows, but your odds of survival are MUCH better if you keep your eyes open & proceed with caution
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Old 03-20-2014, 07:52 AM   #16
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1. I don't understand your need for a fiduciary. Unless you are turning your portfolio over to someone to manage for you, I don't think you can create a fiduciary relationship with an adviser.
Definition of 'Fiduciary'


A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person rather than for his or her own profit.

2. I understand that the Garrett person you found wasn't hourly. Call others in their network until you find one you like.
3. Another possibility, is to talk to a CPA. Some of them are quite good at math.
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Old 03-20-2014, 11:21 AM   #17
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......
3. Another possibility, is to talk to a CPA.....
In my experience most CPA's are not CFP's nor offer FP services per se. But many could prob recommend good CFP's used by their other clients.
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Old 03-20-2014, 11:57 AM   #18
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In my experience most CPA's are not CFP's nor offer FP services per se. But many could prob recommend good CFP's used by their other clients.
If CPA's do include these services, typically they have the PFS (personal financial specialist) designation as part of their CPA.
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