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Re: The Biggest Misconception about FA's..............
Old 12-08-2006, 04:34 PM   #21
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Re: The Biggest Misconception about FA's..............

I think that the biggest problem for most people is that if you are qualified to tell a decent FA from the hordes of crooks that pretend to be a FA ( include insurance salesmen and stockbrokers as well), you are probably pretty close to being qualified to do it yourself.

How does someone who is financially illiterate determine who is qualified to give them advice about money?

How does someone who is financially illiterate determine that they are being charged a reasonable amount for the services provided?

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Re: The Biggest Misconception about FA's..............
Old 12-08-2006, 04:43 PM   #22
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Re: The Biggest Misconception about FA's..............

Quote:
Originally Posted by runchman
What a coincedence, I just recently bought a TIG welder and am having great fun pushing molten metal around.
Runchman, did you go to some classes, or just look at the pictures and start out?

What welder did you buy? 120 or 240 v?

How did you choose the arc welder rather than gas?

Thanks,

Ha

Apologies for heading OT
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Re: The Biggest Misconception about FA's..............
Old 12-08-2006, 04:55 PM   #23
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Re: The Biggest Misconception about FA's..............

There are lots of bad lawyers, bad doctors, bad contractors, etc. too and it takes either intelligence - or dumb luck - to find a good one of those just the same as with a good FA. Some people do get ripped off and some people here may never need the services any of one of these, but that doesn't mean they are worthless to everyone or that they don't help many people enormously.
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Re: The Biggest Misconception about FA's..............
Old 12-08-2006, 05:28 PM   #24
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Re: The Biggest Misconception about FA's..............

Quote:
Originally Posted by HaHa
Runchman, did you go to some classes, or just look at the pictures and start out?

What welder did you buy? 120 or 240 v?

How did you choose the arc welder rather than gas?

Thanks,

Ha

Apologies for heading OT
Ha,

I've had an oxy-acetylene for some time, and a mig for quite a while, and just recently broke down and bought a tig. I then sold the mig...anyway, I got an htp invertig201 which is a 220v model. HTP is a 30 minute drive from me, and a better bang-for-the-buck than miller, hence my decision.

Pretty much self-taught, did some welding back in high school which was a while ago now! If you have some mechanical aptitude, it really isn't tuff to learn. Maybe if you're making a nuclear reactor it's a different story, but for hobby stuff anyway my skills are good enough. Drop me a line at runchmanATcomcastDOTnet if you want to chat about it further...

- John
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Re: The Biggest Misconception about FA's..............
Old 12-08-2006, 05:31 PM   #25
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Re: The Biggest Misconception about FA's..............

Hindsight being what it is: I've often pondered how much I'd have saved in time and money - starting in 1966 with a good mentor/FA rather than my somewhat expensive school of hard knocks/learning by investment mistakes.

heh heh heh heh - sigh!
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Re: The Biggest Misconception about FA's..............
Old 12-08-2006, 06:10 PM   #26
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Re: The Biggest Misconception about FA's..............

Every person needs to assume responsibility for their own finances. I believe this because it takes money to live in this world. There are plenty of fine books to learn this from. You can survive quite well in this world without woodworking skills, and if you do not have good wood working skills can still probably tell a fine piece of furniture from mass produced junk. But every woodworker needs to know how much to charge for their product.

An individual who is ignorant about money and relies on a financial advisor has set himself to the whims of the quality of the individual they deal with, hopefully they will find an individual of the quality of Finance Dude. Yet only upon acquiring the knowledge they need to run their own finances can they independently judge how good their financial advisor is, and then they should not need one!

I would support an early consultation as a means for mentoring to learn about money while one is young and early in the accumulation phase. It is unfortunate for anyone ignorant about money to become suddenly thrust upon a pension cash-out or an inheritance or life insurance proceeds later in life with little interest in managing their money.

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Re: The Biggest Misconception about FA's..............
Old 12-09-2006, 12:27 PM   #27
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Re: The Biggest Misconception about FA's..............

I talked to an FA that was loosely connected to the company I was retiring from, just before I pulled the plug. I wanted someone to tell me that all the net calculators and my own judgement was right and I could retire early. He took a quick look and said I was in good shape to retire. The rest of the first meeting was a feel good pat me on the back for a good job, meeting. It ended with him saying I did well so far with out an FA and could probably do it myself if I wanted (best advise I got from him) and to setup another meeting if I wanted details on what he had to offer. Well he had shared some pretty good numbers with me from one of his clients, making sure to keep the identity hidden. I setup a second, longer meeting. That was the meeting that I found out he charged 3% for his services (he said that included all investment fees, loads etc). Then with some probing I finally found out he was running some hybrid annuity deal that I would be committed to for at least 5 years and 7 if I didn't want high withdrawal fees. I thanked him and said I would think about it. When his assistant called awhile later I told her I was doing it myself.

After my first meeting with the above FA, I still wanted more assurance so I met with another FA that a friend recommended. He was a young kid (seems like a lot of them around) he talked a good talk. He initially said I was good to retire (later said he would have to study the numbers more). He quickly fell off my list when he showed me one of his clients numbers with name and address clearly showing (lived about 5 miles form me), then started telling me what I should be invested in without looking at what I already had. I thanked him for the free visit and left.

I had planned on talking to one more FA that another friend liked, then decided it wasn't worth the effort and took the advise of yet another friend (and this group) and am doing it on my own and open a Vanguard account for my before taxes accounts.

An interesting postscript on the second FA. I talked some more with the friend that recommended him. He was also retiring but was already over 65 and did sign up with him. He ended up with a bunch of OK funds (sounds like a lot more than he needs), an annuity and signed him up for Social Security. He is financially in very good shape and could have retired years ago and didn't. He really didn't need the annuity for cash flow and wasn't even told what the benefit of waiting on SS might be. His Father is in his 90s and he has more energy than me even though he has 10 years on me. He fell in to the class that didn't want to bother doing it himself.

Oh well, I have probably made enough mistakes over the years to have paid for an FA. An experience with an Investment Broker turned me to a do it yourselfer when he talked me into some IPOs and other investments that eventually lost me about $10K and that was the bad part, he talked me out of buying Apple twice. The first time would have been a current cost bases of about $3 and the second time about $6.

Jeb
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Re: The Biggest Misconception about FA's..............
Old 12-09-2006, 07:17 PM   #28
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Re: The Biggest Misconception about FA's..............

I'd like to put my 2cents into this discussion. I was a bank (FC) Financial Consultant for ten years before I retired and worked for a major brokerage house before that. In my situation I covered several branches in smaller towns.

The typical bank customer was older, conservative and not too financially sophiscated. I looked on my job as an investment educator as well as advisor. In this situation some FC's sometimes stepped over the line putting their needs above of their customers. It boils down to integrity and living with yourself at the end of the day. Yes, you must make sales, generated commissions and meet your quotas or you will be replaced. These things are not mutually exclusive. Many times over the years I walked customers across the lobby to have them open CD's or a more appropriate bank account. Why, what I had to offer them was not suitable for their needs, risk tolerance or time frame.

I did not make a huge income as a bank FC but had a comfortable living and above all I could look myself in the mirror without guilt. There are many Joe and Jane six-pack folks who need help with investments. Many do not have the education, temperment or skills to invest for themselves. They need a full service FC to help educate them and steer them toward suitable investments. Some folks like to do their own taxes and feel competent, others would rather have a root canal than try to do their own taxes. Many customer feel the same way about investing.

2soon
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Re: The Biggest Misconception about FA's..............
Old 12-10-2006, 06:08 AM   #29
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Re: The Biggest Misconception about FA's..............

Having read this thread with considerable predjudice* I must conclude that if you can recognize a shyster, you probably don't need his service; If you can't; you probably can't risk his service.

* With the predjudice and embarrassment of personal experience.
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Re: The Biggest Misconception about FA's..............
Old 12-10-2006, 11:41 AM   #30
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Re: The Biggest Misconception about FA's..............

Has anyone sat down with a cfp and got a full plan or worked with a fee only planner for any time.
I think a big part of the issue is many people meet salespeople. Either someone thats an insurance person or maybe a stock broker and they think thats financial planning.
Its obvious from many of the posts here and on other forums that many people would be better off today if they met with a planner at various stages in their lives.








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Re: The Biggest Misconception about FA's..............
Old 12-10-2006, 12:00 PM   #31
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Re: The Biggest Misconception about FA's..............

Quote:
Originally Posted by spideyrdpd
Has anyone sat down with a cfp and got a full plan or worked with a fee only planner for any time.
I think a big part of the issue is many people meet salespeople. Either someone thats an insurance person or maybe a stock broker and they think thats financial planning.
Its obvious from many of the posts here and on other forums that many people would be better off today if they met with a planner at various stages in their lives.
Good point, Spidey. If a good planner could get them from ground zero to at least the basics by the time they are 30 or 35 it would be a major coup. The rest is just time and discipline. I would have benefitted then. Now, probably not.
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Re: The Biggest Misconception about FA's..............
Old 12-10-2006, 12:41 PM   #32
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Re: The Biggest Misconception about FA's..............

Quote:
Originally Posted by spideyrdpd
Has anyone sat down with a cfp and got a full plan or worked with a fee only planner for any time.
A few years ago I was searching for the ultimate number-crunching financial-planning tool (of course this was before I encountered FIRECalc!) and at the time AXA was popular for their version of Monte Carlo software.

When I called up for a consultation they sent me a data package that was so comprehensive and detailed that it was almost a full plan in itself. It was certainly more informative than the subsequent meeting with their sales guy analyst...

I was nibbling on the bait until he mentioned that they were coming out with a new version of the software in six months. (Computer geeks, remember the announcement of the "new" Osborne PC?) I wonder if he figured out that he shouldn't have brought it up or if he just wanted to get rid of me.
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Re: The Biggest Misconception about FA's..............
Old 12-10-2006, 03:24 PM   #33
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Re: The Biggest Misconception about FA's..............

Quote:
Originally Posted by spideyrdpd
Has anyone sat down with a cfp and got a full plan or worked with a fee only planner for any time.
Shortly after I retired but before I discovered this board, I met with a fee-only CFP who lives in the neighborhood. I wrote up the details of what we are invested in, our expenses and expectations and engaged her to review that "plan" and critique it. Basically, I just wanted a trained second opinion. She advised me to add a little international and small cap and talked about whether it might be more prudent to have more bond exposure. She prefers to engage in a permanent relationship for a percentage but was good humored about the more limited engagement. I thought I might check in with her every few years to get a reading but then I discovered this board and realized I could get the same or better advice free.

Thanks.
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