How to find a good *Independent* financial planner

[doneat54]

I'm thinking I might look into the services of an independent financial planner. My portfolio recently crossed 7 figures and I am 3 years and a little bit from retiring at 55. My Fidelity guy is great, but he's a Fidelity guy. I want someone who can look at my whole big picture, including real estate, and help me plan.

Not sure where to start. Are there good websites with directory listings? What to look for? What questions to ask?

Of course I realize a lot of this forum is "do it yourself" thinking. How many of folks here have such planners? My brother has one and pays 0.5% of portfolio quarterly. What is the going rate?

Thoughts and opinions welcome. No decision yet here, just considering...

[Ready]

I think you will find mostly do it yourself folks here, but most will agree that an independent financial planner who only charges hourly for their time and does not represent any products or companies, or earn any commissions on anything they sell, is certainly a reasonable way to go if you don't feel comfortable self managing. I believe there was a recent thread on this, and it was stated that the majority of CFPs do not work on an hourly basis, but as long as you find one that you are happy with that's all that matters.

As for your brother, if I'm reading that right you are saying that he pays 2% per year of his investable net worth for planning services? Given that bond funds are barely paying 2%, he may be effectively earning nothing on the fixed income portion of his investments if so. Most planners charge about 1% to 1.25% for their services. I have not heard of any planner charging 2%. Well, at least not one that hasn't been fired by their client for taking advantage of them.

[Animorph]

Try www.napfa.org

It's been a while since I've seen this directory recommended here, but I'm pretty sure that was it.

Using an FA once to verify your readiness for retirement and perhaps convince a spouse that your not crazy can be a comfort. Of course there's no guarantee they will agree with you.

[SteveL]

I have an hourly planner who I consult every other year of so. Even though this guy was in town, I found him through the following link: Garrett Planning Network | Making competent, objective financial advice accessible

I like my guy, but make no claims for anyone you might find here.

[Midpack]

The problem is 'by the time you know enough to choose a good financial planner, you don't need one.' But if you Google how to choose financial planner, there are some good articles with sound advice. Best of luck...

Here's how this crowd polled in Apr 2012...

[2B]

Quote:

Originally Posted by doneat58 I want someone who can look at my whole big picture, including real estate, and help me plan. Thoughts and opinions welcome. No decision yet here, just considering...

If you post your information here, you can get a whole lot of people to look at your big picture. We're very experienced at giving advice and our accumulated backgrounds are very broad. If you have something unique, I'm sure people will tell you that a "professional" is needed.

Your brother is getting hosed beyone belief. Get him to log on here.

[Ready]

Quote:

Originally Posted by 2B If you post your information here, you can get a whole lot of people to look at your big picture. We're very experienced at giving advice and our accumulated backgrounds are very broad. If you have something unique, I'm sure people will tell you that a "professional" is needed. Your brother is getting hosed beyone belief. Get him to log on here.

+1

I don't think any financial planner will ever have the wisdom you will find collectively amongst this forum. After all, if your financial planner was so successful, he would be part of the ER crowd here, rather than w*rking for a living.

Just kidding...sort of. But seriously, this group has far more wisdom collectively than any one person will ever have, and it's free. Pretty hard to beat.

[SteveL]

Quote:

Originally Posted by Ready +1 I don't think any financial planner will ever have the wisdom you will find collectively amongst this forum. After all, if your financial planner was so successful, he would be part of the ER crowd here, rather than w*rking for a living. Just kidding...sort of. But seriously, this group has far more wisdom collectively than any one person will ever have, and it's free. Pretty hard to beat.

Sorry, but I don't agree. Group think is really good, and this group is very good, as is the group on Bogleheads. However, there are things that I don't feel comfortable about discussing in an on-line forum, that can be discussed freely in person with a professional. The difficult thing is to find an adviser you feel comfortable dealing with, who isn't pushing you into lining his pocket. You just have to keep in mind that the clock is running at whatever the hourly rate is.

The person I use had a very successful career and went into planning as a second career. He is getting ready to retire again, and I think I'm not looking forward to finding someone else.

[youbet]

I think paying a fee based pro for estate planning, complicated tax situations and specific situational studies/projects (example: set up a trust for a special needs child) makes sense.

Paying an advisor to "look over your situation and make suggestions," not so much. If your personal understanding of your routine situation is so weak you need someone else to explain your situation to you, you've likely been avoiding educating yourself and getting involved with your finances on a frequent basis.

Paying someone 1% - 2% to recommend an AA and invest your money in MF's for you is a very expensive way to get the job done and leaves you vulnerable to shark attacks since you're among the naive and uninformed.

[2B]

Quote:

Originally Posted by SteveL Sorry, but I don't agree. Group think is really good, and this group is very good, as is the group on Bogleheads. However, there are things that I don't feel comfortable about discussing in an on-line forum, that can be discussed freely in person with a professional. The difficult thing is to find an adviser you feel comfortable dealing with, who isn't pushing you into lining his pocket. You just have to keep in mind that the clock is running at whatever the hourly rate is. The person I use had a very successful career and went into planning as a second career. He is getting ready to retire again, and I think I'm not looking forward to finding someone else.

Sorry but I don't agree.

The OP only has 15 posts so it's likely they are pretty much a novice. Their Fidelity guy is geared more towards saving recommendations, assessing risk tolerance and helping with asset allocation. After that, I suspect they have little or no expertise. Fidelity probably doesn't want their reps to go into these areas anyway.

The OP has just crossed into seven figures. Okay, they have $1MM and change since I'm assuming they are not counting both sides of the decimal point. I can't see where someone with that level of assets that is primarily in the saving mode (3 yrs to ER) has that complicated a situation. We certainly have many people that could give them insight into any real estate issues or questions they may have. I could be wrong but then we would be directing them to the estate lawyer for trusts etc. If they don't have a will, durable POA and medical POA that would certainly be our first recommendation.

I think I'd rather "bare my soul" here rather than pay ~$2,000 (or more) for a consultation and "plan" that is just one person's opinion. If the OP is dissatisfied with their response here, they will be better educated when they actually meet with their planner. Of course, this is all up to the OP.

[Gotadimple]

I disagree, respectfully. When you share personal information, you should get privacy. Sharing personal information on the internet doesn't guarantee anything.

Around here, you get opinions mostly based on personal experience and preference. There is some value to education and gaining a certification as a financial planner. Where we express concerns as to the value of a planner, it is not about his/her education, but the motive for recommendations based on how he/she is compensated.

Sharing information with a fee-based financial planner as a method to assess the road you have planned for yourself could be a good use of funds for some folks.

Yes, it's not that hard. But not everyone here will spend the time to read the financial publications that study retirement accumulation and decumulation strategies we discuss here.

Garrett Planning is highly recommended in several areas. A local planner could be very helpful for what may be on the surface a simple case, but more complex when considering tax and estate implications.

Rita

[brewer12345]

If you are impressed by certifications I think we have at least one of every flavor here.


[/B]

Quote:

Originally Posted by Gotadimple I disagree, respectfully. When you share personal information, you should get privacy. Sharing personal information on the internet doesn't guarantee anything. Around here, you get opinions mostly based on personal experience and preference. There is some value to education and gaining a certification as a financial planner. Where we express concerns as to thte value of a planner, it is not about his/her education, but the motive for recommendations based on how he/she is compensated. Sharing information with a fee-based financial planner as a method to assess the road you have planned for yourself could be a good use of funds for some folks. Yes, it's not that hard. But not everyone here will spend the time to read the financial publications that study retirement accumulation and decumulation strategies we discuss here. Garrett Planning is highly recommended in several areas. A local planner could be very helpful for what may be on the surface a simple case, but more complex when considering tax and estate implications. Rita

[tmm99]

Quote:

Originally Posted by SteveL I have an hourly planner who I consult every other year of so. Even though this guy was in town, I found him through the following link: Garrett Planning Network | Making competent, objective financial advice accessible I like my guy, but make no claims for anyone you might find here.

That's what I did too, back in 2007 I think it was. I haven't talked to anybody since then though. The cost was about $1000 total (He charged me by the hour and I got the estimated cost up front.)

[Midpack]

I don't think anyone here, including the many DIY investors, would rule out financial advisors for everyone. Some people are better off if they're able to work with a good cost effective financial professional (they do exist), but they may be harder to find than a novice will realize.

The biggest concern is those who sign on with a financial planner without realizing how much those services cost. Unfortunately people do post here with some frequency disclosing paying 1-2% per year. That may not sound like much, but in reality it's considerable, especially compounded over many years. Even if it's a 0.5% premium for a financial planner, most here would just want anyone who goes that route to do so with eyes wide open, having seen the actual math and what it can mean to a portfolio. It's not insignificant. FWIW

[LOL!]

Even when folks find a planner, they often ask here or at bogleheads.org if the planner advice is good or not. And that includes advice from Vanguard and Fidelity, too.

For the same reasons you want someone independent to check your plan, I think you need someone independent to check the suggestions of the independent planner.

[Ready]

As was stated earlier, if you have sufficient skills to qualify that the planner you are thinking about hiring is good at what they do, then you already have the skills to do it yourself. And if you're completely clueless about financial planning, then you need to have some method of ensuring that the planner you pick is really going to give you advice worth paying for. They do exist, but they are few and far between.

And 1-2% per year in fees sounds like a HUGE amount of money when they are charging those fees against your fixed income bond funds, which are likely not paying much more than 2% per year in returns.

[gerntz]

Quote:

Originally Posted by doneat58 I'm thinking I might look into the services of an independent financial planner. My portfolio recently crossed 7 figures and I am 3 years and a little bit from retiring at 55. My Fidelity guy is great, but he's a Fidelity guy. I want someone who can look at my whole big picture, including real estate, and help me plan.

I think two+ heads are better than one.

What do you think of your own understanding and abilities concerning your finances? I think you need at least a moderate level to know if Fidelity or someone else is blowing smoke at you. Assuming you have a decent understanding, yes, a fixed fee planner is a good idea imo as you can compare Fidelity, him/her, & your own thoughts.

Versus spending 2%/yr as I also understand your bro is doing, I'd stick with Fidelity.

[LOL!]

Quote:

Originally Posted by gerntz I think you need at least a moderate level to know if Fidelity or someone else is blowing smoke at you.

Well, if Fidelity is talking, they are blowing smoke at you. I have never seen a Fidelity plan presented on any forum that was not signficantly inferior to the best possible at Fidelity and did not take advantage of a Fidelity customer.

And I write that knowing that I have lots of assets at Fidelity.

[doneat54]

Thanks for all the great ideas and perspective.

I checked with my brother, he pays 0.5% total annually, 0.125% per quarter. My sense is that his guy is managing his portfolio, possibly with approval, making shifts, sales, investments, etc. Not just an "advice" guy. So for a $1M portfolio, it is $5k/yr. He is totally convinced that he is getting his money's worth.

If you are so inclined, you can read my other posts/threads here and get more info on my situation. I am a network engineer by profession, and an avid do-it-yourselfer. But I am close to a target retirement and realizing now that I need to shed risk, and start thinking about a financial plan in retirement. In 2017, I am eligible for a pension from my employer. They have also offered a lump sum buyout that looks very appealing and decays for every year past 2017. Typical corporate incentive to "buy me off" behavior. At modest growth rates and funding, my portfolio will reach 1.2-1.4M in the next 3 years, and the pension payoff is in the $300k-$400k range. So it all looks pretty good.

A by-the-hour adviser would be appealing to me. I would like someone independent to look at my overall holdings, current and expected living expenses, and the paper plan that I have now. I also own some land in the area that has appreciated significantly. And I have a wife who thinks that we can have a place in Caribbean to spend winter... ;-) I will look at the links and references posted here, thanks again.

[bmcgonig]

I think you should do both. Talk to the guys here who are very knowledgeable and to the right planner. Wade Pfau blogs a lot about retirement income generation, I.e. The decumulation phase, which u are about to enter three years hence. His blog mentions a relatively new category of planner, the "Retirement Income Certified Professional (RICP) designation and the Retirement Management Analyst (RMA) designation. If I were going to talk to anyone else besides this group I would talk to one of these if u can find one.