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Old 05-09-2012, 10:13 AM   #21
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Originally Posted by MooreBonds View Post
A female friend (self-employed) mentioned how her financial advisor told her about some sort of 'safe, guaranteed' investment paying 6%, and guaranteed to double in 10 years (this was 3 months ago). I tried to tell her her that nothing these days is paying that high of a yield that has a guarantee of anything (other than a guarantee of a fat commission to the sales person). She REFUSED to even want to listen to me! It's not like I was hitting her over the head with reams of printouts of ER Forum threads, or waxing eloquently about expense ratios, withdrawal rates, and the like. I was barely saying anything, yet she absolutely wanted no part of it.
I have been in a similar situation a long time ago... a former friend was looking to buy his first home (that is how long ago it was )... he was telling me his budget and how his taxes would be 20% less due to homestead... since I was already a home owner, I knew this was not true and pointed it out... he got mad at me and started an argument because the RE agent (who is trying to sell the home) HAS to be right...


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(as a side note, I am surprised that so many people on this forum buy tax software or even pay someone to do their taxes for them, given how uncomplicated it can be for many returns, and given the self-sufficiency and fairly high level of familiarity with numbers the forum members have)

As many has pointed out, the cost benefit ratio is pretty good for this product (even more so if you get it free)... and with me who does my mother's, sister's, my boss and his mom and mine, I get a LOT of benefit from that small cost. But, to be fair I used the H&R Block program.







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Originally Posted by Nords View Post
Even the "good" advisors like USAA's Scott Halliwell say that people are too busy (or too overwhelmed) or not interested or not confident in their own abilities. Scott never hears from guys like us. He hears from people who want to know what an IRA is and why they need one. They don't know where to start, and they won't go there even if someone shows them the way. They just want someone they can trust, and USAA scores big-time from that corporate quality. "Convenience" and "consolidation" just make it that much easier. They have to be internally motivated before they'll seek knowledge, let alone teach themselves about these topics.

Yes, a lot of people are more like one of my sisters. When she asked me to take a look at her 403 options, I was surprised she was in funds with a 1.25% fee... she mentioned that her "FA" had recommended them.... I got on her for these high fees etc. Her response "If it weren't for him coming by my desk and cajoling me to sign up, I would not have anything to invest"..... SO, in this sense I think he did something good and the costs were worth the benefit... it got my sister to start investing... she learned and changed when the actual dollars mattered...
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Old 05-09-2012, 11:03 AM   #22
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donheff, thanks for the additional detail. You summed up the article nicely.

I think the author leaves out a third category of advisors who are an important influence for many investors with limited assets: Money Magazine and others. They routinely publish advice and specific recommendations and I see no reason this will change.
Anyone who religiously follows Money Magazine will lost lots of money.......
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Old 05-09-2012, 11:06 AM   #23
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Financial advisers have their time and place, as jennypenny pointed out. Using an adviser with fiduciary duty, is wise IMO, and why I too like Vanguard, but even so, I am cautious.
What fiduciary duty do Vanguard advisors have and use?
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Old 05-09-2012, 04:35 PM   #24
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(as a side note, I am surprised that so many people on this forum buy tax software
I am a corporate tax accountant, and I use turbo tax. My stuff is just complicated enough (cap gains, AMT, foreign tax credits, etc) that its worth it for the ease of populating the forms.

I don't use a FA though. My most financially savy (though young) brother-in-law just hired USAA. He spends way too much time worrying about whether he is missing out on things, its probably better in the end that he has handed it off.

I tell him to focus on savings and a basic allocation and he'll be fine.
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Old 05-09-2012, 04:51 PM   #25
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Why would 99% of us need a financial adviser unless you feel it's necessary to hire a mommy or daddy to tell you the obvious? Index fund investing and basic asset allocation are certainly not complicated. There are many simple books on the subject. After that, we get will, POAs and Medical POAs from a lawyer.

Unless we have something very complicated in our lives, what is there for a FA to do that would add value? I can't see paying for an on-line version any more than one with flesh and blood.
But unless you've had some education in investing (reading, parental training, etc), most don't know that this stuff is easy.

We had a FA for years because I had been convinced by the media that investing was hard and was best left to the experts. My ignorance ended with the crash of 2008 and the loss of tens of thousands of dollars.

When I realized that our FA was not infallible I found Bogleheads, started reading and quickly understood that it CAN BE simple.

We no longer have a financial advisor.
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Old 05-09-2012, 10:18 PM   #26
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Tonight as I was talking with several other women friends, one mentioned she was going to a seminar this week on "Estate Planning for Women" and handed me the information sheet. It was sponsored by Ameriprise. I said that it was a great idea to go to a women-oriented financial discussion, but I would hesitate to invest through Ameriprise after the seminar due to their high fees. It turned out that not only this friend but another already were investing through Ameriprise and were happy.

So I simply said if they felt their fees were reasonable and they were happy that all was fine, but there were other options with less fees out there.

Very scary - these are smart women with smart husbands. I am SO glad my father taught me how to pick mutual funds on my own and be financially literate. (Thanks, Dad...miss you)
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