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Old 01-11-2014, 02:54 PM   #21
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Hi,

I feel I get value from my FA found through yelp. Spouse has negative interest in financial stuff and I feel I need a sounding board and injection of expert ideas from someone who has a full financial/goal/life picture.

I pay $500 per year plus 1% assets under management but they manage ~3% of net worth (slowly increasing this, rest is low cost mutual funds and real estate) - I treat them kind of like an active mutual fund. I meet with them once every 6-8 weeks and topics range across the whole portfolio: include real estate purchases, kid's jobs, wills, individual stocks, asset allocation, expectations on oil, burma etc etc. Last year they performed a bit better than S&P500; so not the best and not the worst of my asset allocations.

bogleheads.org has quite a few strong, low cost FA recommendations.

I hope to have my kids fully educated/inculcated to low cost indexing before I am unable to manage portfolio, but if something sudden happened I think our FA plus some written direction (which I should write) would be better than nothing.
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Old 01-11-2014, 04:12 PM   #22
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Regarding trying to negotiate with them. My attitude is it never hurts to ask. In general, I don't think you'l be successful with somebody who is part of a larger organization Edward Jones etc. It is possible with an FA who is independent. When was looking for FA when I first retired, I got the impression that it was possible to negotiate fees. However, my demands for proof of their past performance were non-starters.
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Old 01-11-2014, 04:48 PM   #23
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Depends of the titling of the assets. Joint tenancy receives a step-up in basis on the decedent's share, while community property with rights of survivorship receives a step-up on the entire account (assuming one lives in a community property state).

bogleheads wiki/Step-up_in_basis

jlfwealth.com/tips/estate_planning/titling_property
I stand corrected. Thanks for the links.
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Old 01-11-2014, 05:25 PM   #24
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Thanks to eveyone who commented on the step-up basis issue.

I think I need to go see a pro and make sure I'm doing this correctly in Illinois. A large percentage of our non-deferred portfolio is capital gains. Having the basis stepped up would be a good thing for the survivor.
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Old 01-11-2014, 06:52 PM   #25
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Regarding trying to negotiate with them. My attitude is it never hurts to ask. In general, I don't think you'l be successful with somebody who is part of a larger organization Edward Jones etc. It is possible with an FA who is independent. When was looking for FA when I first retired, I got the impression that it was possible to negotiate fees. However, my demands for proof of their past performance were non-starters.
Thanks for the comment, good thoughts to the original post.

The others, related to the step-up stuff ....maybe should be a new thread for y'all. Just say'in.
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Old 01-12-2014, 10:19 AM   #26
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Hi,

bogleheads.org has quite a few strong, low cost FA recommendations.
May I ask where on the site this is?
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Old 01-12-2014, 10:32 AM   #27
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It is not in a specific place at Bogleheads.org

Also, many of the folks recommending the advisors don't use them, so they have no basis for their recommendation.

Actual client testimonials for specific advisors are very rare and seemed to be frowned upon at that site because they are so close to advertising.

Example: http://www.bogleheads.org/forum/view...p?f=1&t=117576
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Old 01-12-2014, 04:28 PM   #28
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May I ask where on the site this is?
The classic boglehead is a proponent of do it yourself, but financial advisor questions come up very often and can be found by searching. For example, Bogleheads • View topic - Picking a good financial planner?

The above is a typical thread which hits most of the popular categories: wiki advice, regular posters who are financial advisors and generally subscribe to low cost index funds, and pointer to general financial organizations. I did not use boglehead recommendations but thought it might be a good starting place checklist.
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Old 01-12-2014, 05:08 PM   #29
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I don't know, but I suspect my situation is not unique. I've always been, and will continue to be a DIY investor. But I've been ER'd for over a dozen years, and when DW finally retired last year I got the idea that it might not be a bad thing to get a completely independent opinion on what I was doing.

I went to this website:
Fee-Only Financial Advisors Home - NAPFA - The National Association of Personal Financial Advisors
and looked for fee-only advisors. I found about a dozen in my area, and all but one had websites. I went through all their sites carefully, and just kept getting more and more turned off.

Every single one of them was "percent of assets under management" instead of the hourly fee I wanted. The worst one made it very clear on their site that their percentage fee was based on my total net worth, not just the portion they managed.

Some of them tried (feebly) to disguise this by claiming they were not using this model, but looking through the verbiage it was clear that this was not true. They used wording like "bands" with different fees based on your band, but the bands were merely levels of your total assets.

The other issue was right up front. An initial consultation would cost at least several thousand dollars, sometimes considerably more. And that was just for the first meeting.

By the time I was through, I was so thoroughly turned off that I had totally lost any interest in going this route.

I still might have a (free) sit-down one of these days with a Fidelity rep to get his take, but that's about it. My Fidelity rep calls me about once a year to chat and invite me to something, but he's very low key and completely understands my DIY nature.
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Old 01-12-2014, 05:31 PM   #30
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Braumeister,

We did go to one of those guys, got the review for much less than his normal fee(mutual friend). His stuff was educational for us at that point in time. I could have learned more reading a couple of good books recommended here. His plan, it made pretty confetti. I'm sure YMMV.
My Fidelity guy sounds much like yous. I do get value from our meetings, and some of their training.
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Old 01-12-2014, 06:42 PM   #31
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Braumeister,

Based on your history of posts, I do not think you will find any value from using a financial advisor. However, if you have access to a free advisor through Fidelity or Vanguard, I think you would find it enjoyable to have someone to talk to and ask them to poke holes in your plan to see if you are missing anything.

I spent a full hour on the phone with my Vanguard advisor. He was very knowledgeable and had no desire to pressure me to buy anything. He made some good observations but in the end agreed that what I'm doing is just fine. It cost me nothing, it was an enjoyable conversation, and it felt good to know that someone who does this for a living looked at my plan and validated it.

FWIW, I spoke to an advisor at Fidelity several times last year. He connected me with Fidelity Portfolio Advisory Services, which wanted to charge me 1.25% to manage my assets. The guy from the FPAS group who I spoke to sounded like a complete moron, and very sleazy at that. It was my last time contacting that advisor, or anyone at Fidelity for that matter.

I read somewhere on the internet recently that only 30% of financial advisors will perform their services on an hourly basis. I can't recall the source, so I don't know how accurate it is. For those who really want one, I did read a good book last year called Bond Investing for Dummies by Russell Wild. I thought the book was well written, especially for novices. At the end of the book is his contact information, and he does specifically point out the importance of using an hourly fee advisor, of which he is one. I never spoke with him, but based on his book, I felt comfortable knowing enough about him that I'd likely be fine using him if I chose to pay for an advisor.

I won't post his contact information since I suspect I may be violating a variety of rules by doing so, but perhaps reading his book first might be a good idea, and then if you still think you need an advisor, maybe give him a ring?
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Old 01-12-2014, 09:21 PM   #32
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When we went looking for a FA a few years ago, we were appalled by their factless beliefs. We're trained as scientists and we assumed that there would be data behind their recommendations, but instead it seemed like they were pushing random, made-up stuff that they had heard on the TV. They all seemed to have multiple TVs, too. Admittedly, we went looking for an FA in the middle of a giant financial meltdown, but they just didn't seem to have any framework of facts in which they worked. OTOH, Vanguard was really great about helping us simplify all of our accumulated accounts and walking us through basic tax planning.

We also got everything set up in a family trust through a lawyer whose financial recommendations were eye-rollingly bad (”no one can afford to retire with less than $10M" still makes us laugh).
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Old 01-12-2014, 10:20 PM   #33
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Personally if I felt the need, I would use an hourly FA to get things in order, then manage myself. Since I'm pretty knowledgeable about such things (after quite a bit of study and reading, and a little practice) I don't use one. However, I understand the question well as my DW has zero interest in how to make the money she wants to spend. As long as green crosses her palm when she wants something, she is right as rain. I do expect, however, that my demise will be before hers, given longevity in her family and in her overall gene pool ...
I am in a similar situation, however I would be very worried that the way the FA treated me and the way they would subsequently treat the DW once they saw the chance to make some big bucks would be very different. The FA you can trust while YOU are watching them may not be the same after only your DW is watching them. I think going the VG FA route is the way to go. Leave instructions on moving everything to a balanced VG fund, and just setup a draw percentage. Might not be the best approach if you were alive, but a lot better than the once trusted FA is taking their 2% or more a year in upfront plus hidden fees.

I don't think you could trust a FA to handle things after you are gone. Not sensible at all. Kind of like having the fox guard the hen house don't you think?
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