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Old 10-07-2012, 03:57 AM   #21
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FYI, a wealth management firm would, I'm guessing, never ever hire a fee based financial planner. That is a conflict with what they do to make money. As a certified CFP myself, I can tell you that fee-based is the only ethical route AND I could never make any money in that line of work because people always want something for nothing. Therefore, they get 'free' plans from firms or individuals who will be making their money on the commissions from the products they recommend to you (life insurance, funds, etc.). So I just use my education to manage my own money but I still get a little freaked about the inability to make a living ethically in financial planning. Waah!
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Old 10-07-2012, 08:01 AM   #22
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Everything I'm running (FireCalc included) says we do, but I will feel better with a second opinion.
OK; you can retire.

Send me a check for my opinion ...

Seriously, I retired from a company where many of my cohorts in age and retirement assets were similar to DW/mine.

Many of them went with a planner - the same one (one started - the rest followed).

While I don't know if the planner helped or hurt their indivudial retirement plan, I do know that everybody who used the planner were still w*rking after I retired (at age 59; not early, but earlier than originally planned).

Three of us that did not follow the flock and did our own planning, using the tools available and just bouncing ideas off of each other (as we do here), all retired within six months of each other and all in our 50's.

I can't say that the go your own route we took gave us an advantage, but I would like to think that the situation just showed that there is a way (if you're willing to do your own homework) to the same end.

In all cases, regardless of the review/suggestion of the planner, it's up to you/partner to make the decision. The planner will not take responsibility if things don't turn out. Sometimes one must just put on their big boy/girl pants, and make the decision based upon what they (not somebody else) believes. If you haven't heard, there are no guarantees in life (regardless if you paid, or not ).

Just my simple POV.
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Old 10-07-2012, 08:36 PM   #23
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I can't say that the go your own route we took gave us an advantage, but I would like to think that the situation just showed that there is a way (if you're willing to do your own homework) to the same end.
I think doing your own financial planning leads to a greater understanding which then leads to more confidence as to when to pull the trigger and retire.

I'm sure there are people who have enough assets to retire but may not know it. Plus, a FP would probably lose money once people start drawing down their portfolio, so there is no incentive for a FP to encourage people to pull the plug and retire.
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Old 10-08-2012, 06:47 AM   #24
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OK, sport, enlighten us on the economics of the wealth management business.
I have been enlightening this board for years and either folks scoff or dismiss what I say as untrue. Funny, most of them are the same folks who know nothing about the business...........
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Old 10-08-2012, 06:48 AM   #25
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I
I'm sure there are people who have enough assets to retire but may not know it. Plus, a FP would probably lose money once people start drawing down their portfolio, so there is no incentive for a FP to encourage people to pull the plug and retire.
That is an uninformed statement..........
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Old 10-08-2012, 08:05 PM   #26
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Just went through the FP process with a big-name brokerage firm. Price was $1100 plus $200/hr for unusually complex circumstances. Our plan was covered by base rate & seemed quite reasonable. Even offered alternative scenarios (inc Monte Carlo analyses) for a few diff AA's based upon their firm's anticipated rates of long-term return of various investment classes (US lg cap growth, value, emerg mkts, bonds (muni & corp), Treasuries, etc.). FWIW- This firm had recently DEcreased its rec SWR to 3.5 from 4% for ER's. Honestly felt the process was not just finance but about personal re-eval of overall life circumstances (e.g. wills, ER life style choices (travel ,etc.), family issues, ER life goals, etc). Although I got a few tips, most of the financial stuff (AA's, etc) was old hat.

I have always been interested in investing & feel comfortable making my own AA's. After all, NO ONE knows what the future holds and each individual (NOT the FP) must live with consequences of financial decisions. Still recall late 1980's when most of the big name (well-respected) financial guru's were pushing heavy investment in Japan. That "best advice" turned out so badly. Nikkei Dec '89 @ 38,000, now over two decades later its still under 9,000. Fortunately-even as young adult I followed my own path & stuck with selected US utilities, value lg cap US mutual funds, & at least 6-12mo living expenses in cash. Cannot help but think about those late 1980's ER's who drank that Kool-Aid back then & then had to return to w*rk doing whatever they could find. Who knows what similar investment pitfalls lurk in today's world??
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Old 10-08-2012, 10:41 PM   #27
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I have been enlightening this board for years and either folks scoff or dismiss what I say as untrue. Funny, most of them are the same folks who know nothing about the business...........
I will take that as an obvious sign of rectal-cranial inversion.
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Old 10-09-2012, 09:19 AM   #28
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I will take that as an obvious sign of rectal-cranial inversion.
I did not say ALL, but most have no idea what an FA does. Sarah in SC and I and a couple others have given a lot of insight. If my job was so easy then more people would do it. People can believe what they want, it is a free country. Wealth management firms do not hire people and pay them 6 figures as fee-based advisors. I now personally know 6 former fee-based advisors who are no longer in the business. Maybe some people will pay $2500-$3000 to have a financial plan done, but not many. That is why firms like Ameriprise double dip their clients and try to average $3500-$4000 a year in fees or more.
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Old 10-09-2012, 01:23 PM   #29
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Just a quick note here, no opinion on the costs of the plan, but there are important distinctions in our industry that are important to note. Bobb mentioned fee-based planners and so did Finance Dude. I think the term you may have been looking for is fee-only. This quote might help explain the difference:

Fee-only is fairly straightforward, yet it is often confused with the similar sounding fee-based. The difference however can be as significant as making sure your waiter understands you are not only a vegetarian, but a vegan. Fee-only indicates that your advisor is compensated solely by way of fees paid by you. There are no commissions received based on product recommendations, no revenue-sharing agreements with investment providers. Fee-based on the other hand is a fee plus commission relationship where payments from investment providers can influence what products are recommended.

Fiduciary is the relationship standard that fee-only advisors accept in their client engagements. Being a fiduciary requires your advisor to act only in your interest, without regard to other parties.

From: Who are NAPFA Fee-Only Financial Advisors? - Forbes

So, fee-based is another thing altogether and should not be confused with fee-only. To my mind, fee-based is probably more of a euphemism for someone who is paid some commissions as well as fees, but predominantly fees.

AUM or assets under management, where the advisor is paid a percentage of assets under management, is another business model, and more typical in wealth consulting, where RIAs are also considered fiduciaries.
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Old 10-17-2012, 08:56 PM   #30
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I now personally know 6 former fee-based advisors who are no longer in the business. Maybe some people will pay $2500-$3000 to have a financial plan done, but not many. That is why firms like Ameriprise double dip their clients and try to average $3500-$4000 a year in fees or more.

This has been my experience too. Most (not all) of the people you meet doing fee only plans are people I wouldn't want doing my plan. Its just too hard to make a living doing it, and the clients still aren't used to being billed for it.

There are some exceptions, especially on the high end. But then you're talking about $20K for a plan and not $2,500. As a client what you should want is not the printed plan, but the insight and experience of somebody who has worked with hundreds of clients over many years, and seen just about everything. Problem is, those people aren't out there with those qualifications aren't selling their services at $2500 a pop.
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Old 10-17-2012, 09:05 PM   #31
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This has been my experience too. Most (not all) of the people you meet doing fee only plans are people I wouldn't want doing my plan. Its just too hard to make a living doing it, and the clients still aren't used to being billed for it.

There are some exceptions, especially on the high end. But then you're talking about $20K for a plan and not $2,500. As a client what you should want is not the printed plan, but the insight and experience of somebody who has worked with hundreds of clients over many years, and seen just about everything. Problem is, those people aren't out there with those qualifications aren't selling their services at $2500 a pop.
True true. We don't know anyone who does plans.
And it has been a while;hope you are well.
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Old 10-17-2012, 09:08 PM   #32
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And it has been a while;hope you are well.
Thanks

Been through a job change, a divorce, a new baby an engagement, and I'm still kicking
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Old 10-18-2012, 09:12 AM   #33
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Thanks

Been through a job change, a divorce, a new baby an engagement, and I'm still kicking
So, in other words, nothing going on?
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Old 10-18-2012, 09:17 AM   #34
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Thanks
Been through a job change, a divorce, a new baby an engagement, and I'm still kicking
Wow, I'd say you've been busy! Glad things are looking up and congrats on the new baby. You still got any dogs?
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Old 10-18-2012, 09:29 AM   #35
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Well, as someone mentioned, I was actually talking about fee only planners. not the way "fee-based" is currently interpreted.

But I would take issue with the comment that fee only planners aren't worth talking to. I still say that's the only ethical way to operate but, like me, I suppose, most of them have dropped out. I still, and I know this must sound crazy, but I still blame the clients really.

For my 2 cents, I'm now happily retired and not suffering from the financial crisis or any other financial issues because I DO know how to swim these waters. I just couldn't help anyone else do it, thanks to the issues I previously discussed.

And yes, it would be great if everyone could do it for themselves but my experience tells me that very few people can due primarily to a lack of objectivity. They don't see what they don't see....that is, to put it differently, they drink their own bathwater. Not to say they are stupid of course but not everyone is cut out to either do well, or even find interesting, financial planning. There is a reason why specialization is a hallmark of today's career paths. We shouldn't all have to be trained as doctors to stay healthy, etc.

So maybe most people on this forum have that interest/capability but this is a self-selected small group.
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Old 10-20-2012, 07:48 PM   #36
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Well,, I had my NAPFA advisor meeting today. First off, I was very impressed with her presentation. I learned a great deal, more than I expected actually. She covered it all: budget, insurance coverage, estate plan, taxes, tax planning, investments, asset allocation, wow... 2.5 hours of us and our money.....

She advised me to leave our 401(k)'s AA alone for now due to what she thinks will be severe market volatility until at least the election. She did advise me to put all my future 401(k) contributions and employer match into the Vanguard Wellington Fund, which is luckily one of my options. She also advised us to open Roth 401(k)'s, which we haven't done. My bad!

It's still sinking in. Not sure I get to stay in the class of 2017. At best case, I'll probably move to the class of 2018. That's the year DH turns 65, and getting him in Medicare will be critical to the rest of the plan.

We don't have quite enough saved, so if anyone has a couple extra hundred thousand dollars they'd like to send us, let me know.

We're saving like mad for the next few years, and need to discuss our budget going forward. We're debt free, so that helps, and our insurance is also what she would have recommended.

She's also a CPA, and offers a very reasonable rate for doing her retiree planning clients' taxes. I'm probably going to do that, and use her planning services every few years for tweaking and checking on our plan.

I'm very pleased, and am glad to have her input. I'm just the type that needs a second opinion on big stuff like this.

So, that's my story, and I'm sticking to it!
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