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View Poll Results: Do You Currently Use an Advisor?
Advisor Dependent 10 4.61%
Advisor Assisted 19 8.76%
Life Event Investor 8 3.69%
Self-Directed Investor 180 82.95%
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Old 04-11-2012, 11:18 AM   #41
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...(snip)...
He said he accepted that some investors like me prefer to manage their own money instead of turning over control to an investment firm. He also said that he knew there was little point in his trying to change my mind, as my way of thinking is a belief system rather than a financial decision.

It was the last phrase (in bold) that bugged me. If he'd told me that if I ever changed my mind, he'd be happy to help, and left it at that, that would have been the professional approach. With that comment, what he was saying was that my approach was based on dogma rather than sound reasoning. It was his way of ending the call by telling me that he was right and I was wrong. He just had to get his own smug dig in. I agreed with him just to shut him up and get him off the phone, but it just confirmed the fact that -

I HATE salesmen
This guy did you a real favor by showing his hand.

Sometimes encounters can make us angry on afterthought and we begin to think of endless ways we could have responded. I comfort myself with the fact that knowing the person's real thoughts is a blessing in disguise.
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Old 04-11-2012, 11:25 AM   #42
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I really do not think that anyone cares about my nestegg and financial well being as much as I do. So, being an entirely self-directed investor is one risk that I am willing to take.
Exactly.

When the market is going down like the fall of 2008 or the fall of 2011, that is the time I feel particularly alone. Yes, unfortunately in the end we are in control of our financial destinies. Some people try to shove the burden off on others so they can blame someone else for the outcome. Even Bogleheads sometimes turn and run in the opposite direction. There is no comfort in loosing money, even if the other guy is feeling the pain too.

I guess financial maturity means -- the buck stops here.
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Old 04-11-2012, 11:28 AM   #43
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Exactly.

When the market is going down like the fall of 2008 or the fall of 2011, that is the time I feel particularly alone. Yes, unfortunately in the end we are in control of our financial destinies. Some people try to shove the burden off on others so they can blame someone else for the outcome. Even Bogleheads sometimes turn and run in the opposite direction. There is no comfort in loosing money, even if the other guy is feeling the pain too.

I guess financial maturity means -- the buck stops here.
+1. As I've heard forever: no one cares as much about your money as you do.
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Old 04-12-2012, 04:19 AM   #44
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I have always been a self directed investor and plan to stay that way.
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Old 04-12-2012, 08:23 AM   #45
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Self directed. (Learned the hard way. Gave all of my 401ks to an advisor back in 99 and lost 2/3 of it in the dot com crash. 4 of my holdings went belly up and the rest just tanked. Killed my former dreams of retiring by 53.)

So, realized I needed to take control myself and have been self directed since then. Read everything I could about investing. Have had some ups and downs, but the satisfaction of understanding what I am doing and why I am doing it far exceeds the disappointments.

And so I keep learning, and this board has given me more resources to learn from!

Thanks!

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Old 04-12-2012, 10:50 AM   #46
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Man, if you lost money in 1995, that's pretty bad. Monkeys with darts were making double digit returns in the mid to late 90s.
'95 was my first full year as an investor and I thought I was an above average monkey

You are spot on that if a financial advisor lost money for his client in '95 then he must either have been a really bad advisor, or an excellent rip-off artist.
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Old 04-12-2012, 12:02 PM   #47
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Good poll.

I'm a little confused (no surprise there--always a little confused) about what an "advisor" is. DH had a conversation back in the '80s with someone in our bank who had a portfolio of Putnam funds to suggest (we passed). Advisor? Salesman? Account executive?
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Old 04-12-2012, 12:23 PM   #48
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Good poll.

I'm a little confused (no surprise there--always a little confused) about what an "advisor" is. DH had a conversation back in the '80s with someone in our bank who had a portfolio of Putnam funds to suggest (we passed). Advisor? Salesman? Account executive?
The lines have been blurred a lot so it is hard to tell. If I had a quarter for every insurance agent I met who was not securities licensed but held himself out as a "planner", I would be a multi-millionaire.......
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Old 04-12-2012, 01:06 PM   #49
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We are self directed. There is an article in the current AARP magazine by an financial advisor that is very interesting. Anyone else read it It seems that the way they are compensated is not always highly visible plus it can conflict with your best interests.
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Old 04-12-2012, 01:14 PM   #50
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If I had a quarter for every insurance agent I met who was not securities licensed but held himself out as a "planner", I would be a multi-millionaire.......
You must know some great places to invest those quarters
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Old 04-12-2012, 01:17 PM   #51
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We are self directed. There is an article in the current AARP magazine by an financial advisor that is very interesting. Anyone else read it It seems that the way they are compensated is not always highly visible plus it can conflict with your best interests.
DW read it first then asked me about it. I told her that there had just been a discussion here on a similar story.

Article: Financial Advisers Flunk Undercover Sting
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Old 04-12-2012, 01:33 PM   #52
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You must know some great places to invest those quarters
Most of the local "known quantity" avoid me.......
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Old 04-12-2012, 02:56 PM   #53
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Most of the local "known quantity" avoid me.......
Then you'll have to consult a financial advisor
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Old 04-12-2012, 03:48 PM   #54
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I consider myself a self-directed investor, though when I FIRE'd I did hire a fee-only advisor to go through my numbers with me.

To rephrase, I say I'm self-directed, but leave the door cracked open and never say never. Similar to taxes. I'm been a Turbotax user for years, but if my taxes get too complicated, I keep the option open to hiring a "professional."
Sounds like the category I'd be in. Have not used an advisor yet...but might pay an hourly fee for an "evaluation" when I get close to FIRE.
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Old 04-12-2012, 05:49 PM   #55
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Self directed.
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Old 04-12-2012, 06:15 PM   #56
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Lost money with advisers at a firm that I will prefer remain anonymous.
I have been able to loose a truck load of money all by myself, completely self-directed and with no help from an advisor whatsoever! Threre was nuttin' to it!
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Advisor-Dependent/Self-Directed
Old 04-21-2012, 01:14 AM   #57
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Advisor-Dependent/Self-Directed

I'm responsible for two portfolios:
- Our personal (DH and myself) is self-directed by me
- MIL, who lives with us, is advisor-dependent.

Since it doesn't seem like many here have really investigated the financial planning industry, here's what I learned from working (as a lowly paid back-office admin) in banking, insurance, and financial planning services.

a) ALL Certified Financial Planners (CFP) are financial advisors. But VERY FEW financial advisors are CFPs. The SEC is currently collecting financial industry titles. The count is up past 8,000 titles, most of which are worthless substitutions for "stockbroker" and "sales rep".

b) "Financial Planning" is an actual legal term. Only certified/registered advisors, a grand total of about 5 of those 8,000 titles, are legally allowed to do "financial planning". Confusingly, anyone can do a 'financial plan', or a 'retirement plan'. Those aren't protected terms. Personally, I wish they'd go back to the original term, "Estate Planning". It was a lot less bewildering for the average consumer.

So – why use a CFP? Because yes, even with certification there are bad CFPs, just as there are bad doctors and bad lawyers and...well, you get the idea.



We use an independent CFP firm for MIL because she has a high possibility of outliving us. If anything happens to us, successor trustees are honest but frankly ignorant about handling estates, dealing with complex tax and inheritance issues, and investing good-sized portfolios. We needed advisors who have fiduciary duty to her, not just following the legally worthless "suitability" standard (that's the difference between the 5 "real" advisor titles and the other 7,995 worthless titles).



We wanted an advisor with a twenty-year track record, of moderate size (big enough to stay in business, small enough for personal service), willing to provide multiple referrals from long-term (at least 5+ years) clients, of unimpeachable ethics and deep financial services knowledge. They need to be experienced in "hand-holding" a client through extremely stressful, critical decisions in ALL areas: financial, tax, and legal. They will be part of the trio of pros needed in those areas, and must excel at communicating so that any possible issues can be pro-actively managed by the successor trustees.



I have access to two independent CFPs whom I respect highly and have learned a lot from. They are generous with their time, love to educate and help people, and can count a high percentage of multi-generational family clients.



I handle our own portfolio because I enjoy doing so. I also do our very comprehensive financial planning because I learned how to evaluate risk unemotionally and analyze the most cost-effective risk mitigation for us. We never made a lot of money and have definite health negatives genetically. For us to successfully take early retirement meant a solid, well-tested financial plan was absolutely essential. I retired in 2006 and my DH retired as planned in 2010. The market chaos had no effect on us, despite the fact we are rampant consumers and have never done a formal budget in the four decades we've been together.



This is because a financial plan has very little to do with investing ROI, budgeting and other financial basics. What I learned from long experience in filling out paperwork was to never mistake fundamentals for risk analysis. Most people handle risk by ignoring it. If you're lucky everything will work out. Of course, the media seems to be full of stories these days of Boomers and WWII seniors for whom ignoring risk eventually came back to bite them. We personally see this problem a lot among our friends and family as well.



If anything happens to me, DH doesn't enjoy investing as I do. He will sell the house (no mortgage) and transfer the proceeds and the portfolio to the CFP firm who handles MIL's portfolio. These are non-discretionary managed accounts with all funds bought at NAV. Quarterly reports (and personal meetings any time we want) always detail in full what funds are being used and the proportion of the portfolio assigned to that market sector.



More importantly, DH will have the firm as his first-line resource for any questions on any subject concerning whatever affects his or MIL's financial situation. All good advisors develop a wealth of knowledge and numerous professional contacts. They will be there for those times when DH needs a referral beyond the legal/tax advisors we already use.



You use a fiduciary advisor as a collaborative effort. A good one will say "no" to you if they think you're taking on too much risk. They are not there to give you above average returns on the latest "hot" market sector. They are there to help you get good returns with the lowest possible risk. We do not grudge them their fees, any more than we grudge what we pay to our excellent mechanic, or our skilled orthopedic surgeon.



A trustworthy certified advisor will save you time, money, and energy. A bad one, which is most of them, should be avoided at all times.
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Old 04-21-2012, 07:45 AM   #58
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I've been retired for 17 years, have a current income that is about 2X my final annual salary, and doubt I would be any better off if I'd relied on the advice of a CFA .
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Old 04-21-2012, 10:48 AM   #59
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You may have missed my point

Many people have never seen the difference using a CFP (not CFA, BTW) makes, for some people. I have, and I assure you, the difference a good advisor can make is substantial.

Think of basic examples: many people change the oil in their cars. CAN everyone do it? Yes! SHOULD everyone do it? Maybe. I can't see my 84-yr old MIL doing it, can you? MUST everyone do it? Nope, and many don't do it either themselves nor go to a pro to have it done, they just drive as long as they can on gunked-up engines. And sometimes they break down on freeways and are put to a lot of trouble and $$$, but they want to risk it. Their choice.

You can write your own will. There's lot of books on the subject, free advice on the Web, legal forms available from many reputable vendors. CAN you? Certainly, and doing something is better than nothing, as I can tell from having settled an estate. SHOULD you? Again - maybe, and maybe not. The money we spent on a probate attorney was well spent, in our opinion. She raised issues we had never thought of. That's her job, and that's what we received - invaluable, as I'm sure you would agree.

I have no problem doing both the investing and the financial planning for us. But they are two different things, requiring different skills and different knowledge base.

We have seen from personal experience that most people are very poor at financial planning, because they have no idea of the right questions to ask of themselves, and they are afraid of objectively analyzing the amount of risk they have allowed to accumulate in their lives.

A fiduciary advisor is a trusted professional resource when you encounter life-changing events (these are defined in financial planning as birth, death, marriage, divorce). How many people have you known who forget to do something as simple as change the beneficiary on their accounts when they get married or divorced?

In my MIL's case, she has dementia and cannot even add/subtract accurately. As fiduciaries for her trust, it would be negligent of us to not make certain that her finances will be professionally handled so that the successor trustee has an easier time.

I've been there, when my sister died at age 38. You do not want to be searching for sound financial and legal advice when you are grieving with the other family members, while trying to understand all the issues around settling an estate, most of which you are totally unfamiliar with and many that carry substantial legal/financial penalties for making an error.

A good advisor helps clients stay organized. If you don't need that, more power to you, that's great! But many people DO need it, and do not want to be involved in day-to-day investing. And like our estate attorney, a good fiduciary advisor makes sure 'all the bases are covered.'
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Old 04-21-2012, 11:11 AM   #60
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A trustworthy certified advisor will save you time, money, and energy. A bad one, which is most of them, should be avoided at all times. A certified advisor may or may not save you money. At 1% of assets (not uncommon for an FA) - $10,000/yr per $1MM assets! Someone retiring with $1MM might hope to generate $40,000/yr in income using 4% SWR just for example - another $10,000/yr for an FA is relatively costly, and will have a considerable effect on retirement income over the long run. That's a pretty big incentive to DIY if you can. And your latter point is yet another reason to DIY, unfortunately "bad ones" prey on those who most need their services all the time.

Many people have never seen the difference using a CFP (not CFA, BTW) makes, for some people. I have, and I assure you, the difference a good advisor can make is substantial. For some people no doubt, my MIL couldn't DIY invest. This is a community of people who have consciously chosen to learn to DIY, so the poll and POV here isn't going to match the mainstream view - any more than preaching Hummers & Corvettes on a Prius forum.

Think of basic examples: many people change the oil in their cars. CAN everyone do it? Yes! SHOULD everyone do it? Maybe. I can't see my 84-yr old MIL doing it, can you? MUST everyone do it? Nope, and many don't do it either themselves nor go to a pro to have it done, they just drive as long as they can on gunked-up engines. And sometimes they break down on freeways and are put to a lot of trouble and $$$, but they want to risk it. Their choice. Paying $50-100 for someone to change my oil doesn't compare to $10's of thousands a year for a financial advisor.

You can write your own will. There's lot of books on the subject, free advice on the Web, legal forms available from many reputable vendors. CAN you? Certainly, and doing something is better than nothing, as I can tell from having settled an estate. SHOULD you? Again - maybe, and maybe not. Again, paying a (few) thousand for a complete will & other docs several times during retirement doesn't really compare to $10's of thousands per year for an FA.
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