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Old 02-13-2011, 09:17 AM   #121
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.... my intention was to put my money with a fp and let him make my investments grow, as that is why he took a percentage every year. when the years go by and you see minimal growth, but his commission stay the same, then it is time to rethink the premise...

Sounds kinda like a leech on a host.

I guess you can look on the positive side... at least you got minimal growth. Chalk the rest up to educational cost and move on.
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Old 02-13-2011, 11:15 AM   #122
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A lot of what has been said here about financial planners could also be said about lawyers, doctors, auto mechanics, plumbers, HVAC people, car salesmen, . . . you name it.
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Old 02-13-2011, 02:23 PM   #123
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how much money do you invest with you doctor, auto mechanic, plumber, hvac people. they work for you and charge you for their labor. you know how much it cost and it is not an ongoing drain. you only pay for their services when you need them.
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Old 02-13-2011, 03:12 PM   #124
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how much money do you invest with you doctor, auto mechanic, plumber, hvac people. they work for you and charge you for their labor. you know how much it cost and it is not an ongoing drain. you only pay for their services when you need them.
You're right all of the above work with totally transparent billing without any profit motive, intentional over billing, or putting their interests before their clients
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Old 02-13-2011, 03:18 PM   #125
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If you don't know what you are going to pay these kinds of people before they work for you. maybe you should work at it a little harder. I don't give people an open ticket to charge whatever they want.
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Old 02-13-2011, 03:22 PM   #126
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Nor does anybody in the financial services business have the ability to charge you any fees, expenses, or commissions that aren't fully disclosed beforehand

None of the professions you mentioned have the same requirement
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Old 02-13-2011, 03:54 PM   #127
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Maybe so but when I had a broker handling my investments he never gave me a disclosure of any costs. He did send me a picture of his 2 kids every Christmas though, he should have also provided their SS #'s.
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Old 02-13-2011, 04:32 PM   #128
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It's kind of interesting to watch this group of above-average people pile on when somebody criticizes planners and annuity salespeople. Not sure I understand the reason. Maybe it answers the question "Wadda you do all day?" The subject has been covered, over and over and over and over; check the archives. Nobody is forcing anybody to use a planner or buy an annuity.

This post made me wonder:
Quote:
Originally Posted by Bestwifeever View Post
So FAs do use Vanguard. Glad to see it.
I don't mean to be picking on you BWE, but it almost seems like before you saw FinanceDude's post your logic might have gone something like this:
Vanguard = good.
Planners = bad.
Therefore Vanguard and planners are mutually exclusive; planners do not use Vanguard.

Am I close? Of course planners use Vanguard.

Quote:
Originally Posted by Sarah in SC View Post
...I don't say it too much, but you folks sure have a broad ass paint brush ...
I couldn't agree more.


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Originally Posted by haha View Post
...We have a tendency to narrowly interpret actions of those who appear to make different choices from those chosen by us.

Ha
Very well said.


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Originally Posted by Orchidflower View Post
It's the popular thing to believe that all financial advisors are crooks...just like all salespeople are shysters..sigh. (Not that some aren't, of course, just not all.)
Flowers for you.


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Originally Posted by meierlde View Post
I am not sure what the rate might be but why not FA by the hour maybe $400 or so. It can't take but a few hours to figure out where folks are going and perhaps an hour a month beyond that.
Lots of FA's work this way. Here is an example: Garrett Planning Network - Fee-Only, Hourly Financial Planning and Investment Advice


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Originally Posted by haha View Post
What I am confused about is why in a capitalist country otherwise fairly normal people are upset about what someone charges for a service that can be used or ignored. It's not like a toll on the only bridge between your job and your home. It isn't even like doctors' salaries or civil servant retirements. You think they aren't worth the money, you are free to bypass their door. You think you want the service, but cheaper, bargain with them, or shop around. There is no union.

I sometimes wonder if a lot of our board members wandered in here after things got too free in East Germany or Russia after 1989.
Ha
Good post. East Germany --


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Originally Posted by Sarah in SC View Post
Ha, I agree it is odd. I mean, I don't buy hair color, but I'm not out there railing against the hairdressers who offer it.
Sarah, Sarah, don't you get it? If you don't use hair color (just because that is your choice) you should be telling everyone who does use it what a mistake they are making, and how the hair color industry is just a giant multilevel marketing machine designed to rip you off, and to add insult to injury you are required to compensate the cosmetologist who applied it! Lions and tigers and bears, Oh MY! The sky is falling and I can't get up!




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...I will tell you why some people need a financial advisor... I had a BIL who was a perfect example... in most everything, he did his homework... he talked to people... he worked through the problem...

When it came to taxes and investing... he freaked out... not a simple freak out, but a complete change of personality, not thinking etc. etc. freak out... I would put together a plan and give him options... for this type of investment you can choose fund A, B or C... for this you choose M,N, or O... etc. etc.... this did not satisfy him.. in his freaked out voice he said 'just tell me where to put the money'...
Yes, a lot of people don't want the bother, or are not comfortable making the decision. They need advice.


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And our forum tends towards a "pile on" mentality. Mention someone who lives less that a pure LBYM lifestyle and watch the crowds pile on with the criticism. Etc.

Perhaps it would be like participating in a computer hobbiest forum and suggesting a call to the "Geek Squad" would get a simple computer problem solved instead of learning how to handle it yourself.
Very good parallel. People must use Geek Squad or else it would have no reason to exist.


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Originally Posted by saluki9 View Post
Having now working in this business through two major downturns I can say this. The advisors that kept their clients invested when their client's emotions were telling them differently have saved their clients many multiples of a lifetimes of their fees. I know this because I have seen it with my own eyes, and had dozens of those conversations with end clients.
Have seen people buy near the top then freak out and sell at the bottom. Some good advice, if followed, would be worth a fraction of a percent of AUM.



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You're right all of the above work with totally transparent billing without any profit motive, intentional over billing, or putting their interests before their clients
Thanks. That's the point I was trying to make.
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Old 02-13-2011, 04:52 PM   #129
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how much money do you invest with you doctor, auto mechanic, plumber, hvac people. they work for you and charge you for their labor. you know how much it cost and it is not an ongoing drain. you only pay for their services when you need them.
Well if you take a maintenance drug, at least in my case, I have to go for an exam (which is mostly the dr telling you about his last vacation, his next vacation, or the grandkids) followed by a blood test that costs $9, but they try to charge $125 for, before he'll write a new script (for a max 6 month supply to keep you coming back on a regular basis). So for doctors, maintenance drugs are like annuities that pay twice a year. Oh dear -- I used the dreaded "A" word, didn't I?

Had a plumber once tell me that he bases his charges for water heater installation on the length of the water heater warranty because the better warranted ones last longer and he gets less install business on those. Not sure I agree or not, but that's what he told me.

Last time I bought firewood my rack was partially full when the guys loaded the rack, then proceeded to charge me for a full rack. I took the boss to the rack and put my hands on the old wood, and smiled and said "I already paid for this wood and I'm not buying it again." His reply: "I don't know what I was thinking." Yeah, right.
So, there ya go.
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Old 02-13-2011, 05:09 PM   #130
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Rustward, for transparency, do you use an advisor? Fee for service? % of funds managed? Both?
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Old 02-13-2011, 05:27 PM   #131
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Rustward, for transparency, do you use an advisor?
Yes, in fact, I do. But notice that I am not recommending that everybody use one.

My results are usually somewhere in the middle of the DIY pack, after all fees and expenses. If you can find the most recent "I'll show you mine if you show me yours" thread (2010 results) from last month you can see where I am.

Use mostly institutional class funds that are not sold at retail and have lower ERs than retail, but not as low as most Vanguard. Have one or two Class A funds for funds that have no institutional share class, but all loads are waived on those. Some individual stocks.

BTW I just finished one of Bernsteins books and started on a second. Not saying I am ready to become a DIY indexer -- nowhere close to that, but I am open minded enough to want to understand all the perspectives.

Edit to add: My planner is a CFP and a broker-dealer, but my individual stocks are in a managed account held elsewhere. I have made it clear over the years that if there is ever any churning or trust issue he will see everything transferred out -- not in a threatening way, but that is how I would propose to deal with the situation. These are discretionary accounts but he has never made a trade without speaking to me and DW about it beforehand.
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Old 02-13-2011, 05:34 PM   #132
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This post made me wonder: I don't mean to be picking on you BWE, but it almost seems like before you saw FinanceDude's post your logic might have gone something like this:
Vanguard = good.
Planners = bad.
Therefore Vanguard and planners are mutually exclusive; planners do not use Vanguard.

Am I close? Of course planners use Vanguard.
I don't know that you saw all my posts in this thread, RW. First, I tried to justify how an FA might be earning a larger commission on a larger portfolio in an earlier post. My comment in that earlier post about Vanguard was in response to FinanceDude's describing the company as a DIY firm (so to me that is saying an FA would not use Vanguard), which was then followed up by jimoh's post: "VG does not pay the advisor, so who does?
VG is choosing not to use a salesforce. The sales people need to be compensated. Fix that problem and you have a workable solution." (implying further that FAs do not use Vanguard because they won't get paid by Vanguard).

Saluki tells us that advisors DO use Vanguard, and then FinanceDude acknowledges that his company also does.

Hence my post that you quote. I apologize if that gives the idea that I think FAs are bad, as I do not. I just wanted to know if FAs used Vanguard (because honestly it seems FAs should consider any investment that might be appropriate for a particular client's needs). That's all.

PS (back to the thread)--it wouldn't bother me at all if an FA (especially one with great professional credentials) was "over-aged"--something to be said for having gone through firsthand many different economic climates imho. Doubtful the vintage successful FA needs the money anymore but like the "over-age" lawyer, he/she probably still enjoys the w*rk.
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Old 02-13-2011, 05:48 PM   #133
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I must be getting old. I thought that you suggested that she might be picking his pocket.
Understandable. It is a similar motion, and either way you are screwed.
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Old 02-13-2011, 06:03 PM   #134
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I don't know that you saw all my posts in this thread, RW. First, I tried to justify how an FA might be earning a larger commission on a larger portfolio in an earlier post. My comment in that earlier post about Vanguard was in response to FinanceDude's describing the company as a DIY firm (so to me that is saying an FA would not use Vanguard), which was then followed up by jimoh's post: "VG does not pay the advisor, so who does?
VG is choosing not to use a salesforce. The sales people need to be compensated. Fix that problem and you have a workable solution." (implying further that FAs do not use Vanguard because they won't get paid by Vanguard).

Saluki tells us that advisors DO use Vanguard, and then FinanceDude acknowledges that his company also does.

Hence my post that you quote. I apologize if that gives the idea that I think FAs are bad, as I do not. I just wanted to know if FAs used Vanguard (because honestly it seems FAs should consider any investment that might be appropriate for a particular client's needs). That's all.

PS (back to the thread)--it wouldn't bother me at all if an FA (especially one with great professional credentials) was "over-aged"--something to be said for having gone through firsthand many different economic climates imho. Doubtful the vintage successful FA needs the money anymore but like the "over-age" lawyer, he/she probably still enjoys the w*rk.
Understand. I might have been overwhelmed by the strong anti-advisor sentiment of the forum.

I have read about other posters experiences with Ameriprise and the others and I can report having no such bad experiences -- maybe a couple of hiccups over the years but generally smooth sailing.

Back on topic, yes, having experience through business cycles does help keep one from panicking. It breaks my heart to see somebody retire, take a lump sum and invest it in the markets with little or no prior investing experience, then sell at the bottom of a big dip. Somebody in that situation might be better with a planner -- maybe an older planner who has been through those situations.
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Old 02-13-2011, 06:17 PM   #135
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My results are usually somewhere in the middle of the DIY pack, after all fees and expenses.
I'm not sure exactly what the "DIY pack" consists of RW, but it's good that you're satisfied with the product you're buying and that you're getting what you consider resonable results. I know other people who employ an advisor and are generally satisfied. And I know one who is very dissatisfied because he was the victim of a shark attack. It seems to be a mixed bag.

For several years long ago, I was a client of a financial firm that is much criticized on this forum. While the criticism is much deserved, and I understand that now, the aggressive sales person served a positive purpose at that time in my life. As you study investing strategies, you may also transform to a DIYer and look back on the expenses of employing a general purpose advisor as an unnecessary extravagence as well.

Speciality advisors helping with estate planning, taxes and those sort of things are unique from advisors simply recommending AA's or determing SWR's. We all need to understand those things on our own to some extent.

Remember, this forum is about reaching FIRE and enjoying and maintaining FIRE status. DBP pensions, working spouses, income producing hobbies, inheritances, lottery winnings and the like are all part of it. But, the real interest for many of us is the process of accumulating wealth over a lifetime through saving and investing those savings to provide income to sustain a life without working.
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Old 02-13-2011, 06:35 PM   #136
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Back on topic, yes, having experience through business cycles does help keep one from panicking. It breaks my heart to see somebody retire, take a lump sum and invest it in the markets with little or no prior investing experience, then sell at the bottom of a big dip. Somebody in that situation might be better with a planner -- maybe an older planner who has been through those situations.
I have stories that would literally shock you, like the guy who took a lifetime only payment on his pension after a bout with testicular cancer and a wife 10 years younger. He was referred to me after the fact, not much I could do for him........... He got a whole extra $226 a month extra over life and 50% survivor, and he didn't need the extra money.........
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Old 02-13-2011, 07:15 PM   #137
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I'm not sure exactly what the "DIY pack" consists of RW, but it's good that you're satisfied with the product you're buying and that you're getting what you consider resonable results. ...
I was referring to this thread and assumed (possibly incorrectly?) that most are DIY:
How did your portfolio do in 2010 ?
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Old 02-13-2011, 07:51 PM   #138
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Rustward, for transparency, do you use an advisor? Fee for service? % of funds managed? Both?
Forgot to answer the fee part. I would rather not quote the fee directly. It is a percentage of AUM which is far lower than what most people here seem to assume that investors pay for wrap accounts. As they say: "Everything is negotiable.", and it took a lot of negotiating, mostly me saying "too much" a lot.

If by % of funds managed you mean how many of our accounts/funds are in this program, almost all, except for a -- here comes the "V A" term -- variable annuity in a 403B to which we stopped contributing in 2008. We'll rescue that one as soon as we can do it without significant surrender charges, but it is performing acceptably -- for a VA. ... and a smallish 401K at a past employer that for reasons I'd rather not disclose, have chosen to leave in place for now.
Also three stock accounts -- one mostly US large cap, one NASDAQish blended with a little international/multinational, and one international -- these do not come under the wrap fee structure, but have their own fee structures which are a little higher that the wrap fees for mutual funds, but they lack the ER's of mutual funds. International seems to incur the highest expense.
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Old 02-13-2011, 09:30 PM   #139
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I have two close friends who are financial planners. Both are well past normal retirement age but can't afford to stop working. Hmmmm.

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FIREd 7/1/2008

OK, the above was the original statement that started this thread.

I'd like to respond to it. Here goes: I think it's great that person can work past his retirement age if he so chooses. In the case of these two friends, there might be all sorts of reasons they continue working. And, I would assume that a financial planner might really enjoy his work once he was established and didn't have to hustle for clients. It seems a whole bunch of people on this board seem to enjoy the process of financial planning (if only for themselves) many years after they have retired. I find the process of financial planning interesting/challenging and fun. So, if I were a financial planner and enjoyed the work, why would I retire from the profession?
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Old 02-13-2011, 09:31 PM   #140
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I was referring to this thread and assumed (possibly incorrectly?) that most are DIY:
How did your portfolio do in 2010 ?
Perhaps you should be looking at a longer term than one year?

I have noticed that our self-confessed advisers, who work so hard for their clients, spend a lot of time here (judging by their post counts)?
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