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Old 07-10-2009, 01:07 PM   #41
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I shudder to think what a "best client" means to a FA. Goose that lays golden eggs and lets you have them?
Ouch. Cynicism meter jumping off the charts here....
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Old 07-10-2009, 01:13 PM   #42
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I was curious if y'all could speculate why financial journalists have financial advisors? For instance, Paul Sullivan of the NYTimes writes obliquely about switching advisors in this article: http://www.nytimes.com/2009/07/10/yo.../10wealth.html
and Ron Lieber of the NYTimes is known to have used an advisor who was indicted for fraud: http://www.nytimes.com/2009/06/11/yo...s/11money.html
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Old 07-10-2009, 01:23 PM   #43
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I shudder to think what a "best client" means to a FA. Goose that lays golden eggs and lets you have them?
People who know what goals they are trying to reach, or the challenges they face and who will listen to advice. It also doesn't hurt if they are nice respectful people either.
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Old 07-10-2009, 01:26 PM   #44
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So other than stupid rich people...
I couldn't figure out the answer to the question so I stopped trying to become one.
Well, one out of two isn't so bad!

I think many of a FA's customers start as "Holy crap, I just realized that 90% of my net worth is in my employer's restricted stock and unvested options. I'm already working 80 hours a week to avoid the upcoming layoffs, my wife wants to remodel the house, my six kids want to go to college, and I don't have time to deal with all of this. What can you do for me?!?"
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Old 07-10-2009, 01:30 PM   #45
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Well, one out of two isn't so bad!

I think many of a FA's customers start as "Holy crap, I just realized that 90% of my net worth is in my employer's restricted stock and unvested options. I'm already working 80 hours a week to avoid the upcoming layoffs, my wife wants to remodel the house, my six kids want to go to college, and I don't have time to deal with all of this. What can you do for me?!?"
Hey, wasn't that one of my comments in a previous thread?

Yes, that is fairly common, but not always the case.
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Old 07-10-2009, 01:32 PM   #46
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I think many of a FA's customers start as "Holy crap, I just realized that 90% of my net worth is in my employer's restricted stock and unvested options. I'm already working 80 hours a week to avoid the upcoming layoffs, my wife wants to remodel the house, my six kids want to go to college, and I don't have time to deal with all of this. What can you do for me?!?"
That happens MORE than one would like to think. As for the so-called "financial journalists" of the NYT, well it is amazing to me that those folks still have jobs......almost ANYONE on this forum could submit better articles........
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Old 07-10-2009, 02:09 PM   #47
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Most folks in your situation DON'T WANT to invest themselves, you are different.
No, I didn't want to have to do everything myself -- I would love to just pay someone to manage everything for me and create maybe a few choices of realistic financial goals for me to pick from. But at least everyone I checked with wanted me to make all the decisions and they would just carry it out.

It's like ordering something at a restaurant, then the chef comes out and asks me what ingredients I want him to put in it, what suppliers to buy them from, what seasonings I want him to use, and how long I want him to cook it. I don't know! Surprise me! I'd like to pay for someone's expertise, experience and recommendations and not just a hired hand to carry out my detailed instructions. Do financial advisors like that exist, or did I just happen to pick bad ones?
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Old 07-10-2009, 02:57 PM   #48
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So, you're a mooch..........

hey, its your money.......

Remain skeptical no matter WHERE you get advice from. Pretty hard to sue an anonymous person on the Internet if their advice blows up your nest egg..........
1 - By your definition, a mooch. However, I see it as similar to consumers being paid to discuss a company's new products. Let's not forget, the FA eats too, some or all of the cost is written off, or reimbursed by the parent company.
2 - My money, shared with the family and the taxing authorities.
3 - Always skeptical. Listening to FA sales pitches, reading books, conversing on the internet at M* and Bogleheads. Seems like a balanced approach, and the nest egg will make many omlettes in the future.
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Old 07-10-2009, 06:13 PM   #49
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No, I didn't want to have to do everything myself -- I would love to just pay someone to manage everything for me and create maybe a few choices of realistic financial goals for me to pick from. But at least everyone I checked with wanted me to make all the decisions and they would just carry it out.

It's like ordering something at a restaurant, then the chef comes out and asks me what ingredients I want him to put in it, what suppliers to buy them from, what seasonings I want him to use, and how long I want him to cook it. I don't know! Surprise me! I'd like to pay for someone's expertise, experience and recommendations and not just a hired hand to carry out my detailed instructions. Do financial advisors like that exist, or did I just happen to pick bad ones?
Well, there was Bernie........ but he's in jail now. Still, there must be others willing to take your money, "manage" it with no/few inputs or oversight from you and collect fees and commissions.

I've never, ever used that kind of advisor-money manager so I'm just guessing but I'd say they have a concern that if their strategy leads to substantial losses, the client (you) would whine and probably sue. So, they want/need substantial proof that you are fully aware of and approve of what's happening.
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Old 07-10-2009, 06:36 PM   #50
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I think this is going to end up being a pay off the mortgage never ending debate with no right answer.

The chef is an interesting analogy. I am a decent cook when I set my mind to it, but there is tons of chefs who make a better tasting meal, I suspect that vast majority of moms on this forum are far more efficient at preparing a decent meal than myself. Judging the quality, cost and efficiency of a chef is a easy, immediate and requires minimal knowledge.

Hiring a contractor/handyman/mechanic is a bit more difficult, since you may not have any knowledge of the subject. Books are somewhat helpful, but there is no substitute for getting your hands dirty (which involves breaking things in my case). Still it is relatively easy to tell after a few days/weeks/or rarely months if the guy is any good or not and price shopping isn't too difficult. On the other hand there is minimal certification and there are plenty of incompetent/crooked mechanics and handymen.

Judging the skill of doctor/dentist/lawyer is much more difficult. It is generally impossible for the lay person to have the knowledge of their skill without going to medical/law school. The results aren't typically evident in periods shorter than a year and can take decades to really know. (e.g. a will,contract, cancer treatment). It is also very difficult to separate the skill of the professional from the situation. Did the patient die/lose the case, because the doctor/lawyer was incompetent or cause the person was really sick/case really weak. So people often judge the quality of a professional on the basis of their interpersonal skills. Fortunately, the bar association and AMA have implemented a certification process which sets a pretty high bar so that most of the truly incompetents are weeded out.

The problem with FA as profession is that they combine the worse of lawyers (it generally takes years to judge results, highly situational dependent) with the lack of certification that you get with auto mechanics, handyman etc. I know we've seen a lot more complaints about financial planners this last 6 months than we saw 3 years ago. I also think that for people with decent math/money skills you can learn the basics of financial planning by reading 3 or 4 books from among the boards reading list. All in all I find by that the time you've acquired the knowledge to properly evaluate an FA skills, you've also got the knowledge to do it yourself.
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Old 07-10-2009, 06:47 PM   #51
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...I'd like to pay for someone's expertise, experience and recommendations and not just a hired hand to carry out my detailed instructions. Do financial advisors like that exist, or did I just happen to pick bad ones?
Expertise - memorize these three letters...CFP.
CFPs don't sell investments, they sell their advice and time. Period.
I used a CFP years ago. I am a DIY right now.
If I ever felt I did not have a handle on my financial affairs, I would not hesitate to re-engage this same CFP for a sanity check. I am not a trusting person at all, in fact I am downright cynical. But I do know to get help when I am out of my element or need an outside opinion. That's my solution. YMMV.
If you want someone to drive your portfolio transactions, just pay the non-CFP financial advisor fees and commissions and there you go.
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Old 07-10-2009, 07:20 PM   #52
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...there must be others willing to take your money, "manage" it with no/few inputs or oversight from you and collect fees and commissions.

I've never, ever used that kind of advisor-money manager so I'm just guessing but I'd say they have a concern that if their strategy leads to substantial losses, the client (you) would whine and probably sue...
I suppose it comes down to mutual trust, then. No, I wouldn't sue, but they don't know that because they don't know me. Maybe the answer is to find a FA from your small hometown who you grew up with and your kids and parents all know each other?
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Old 07-11-2009, 03:15 PM   #53
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I suppose it comes down to mutual trust, then. No, I wouldn't sue, but they don't know that because they don't know me. Maybe the answer is to find a FA from your small hometown who you grew up with and your kids and parents all know each other?
Some of the biggest ripoffs have been from 'affinity groups'.
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Old 07-11-2009, 03:17 PM   #54
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Some of the biggest ripoffs have been from 'affinity groups'.
Yep. One guy in particular Madoff with billions...
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Old 07-12-2009, 07:52 PM   #55
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I suppose it comes down to mutual trust, then. No, I wouldn't sue, but they don't know that because they don't know me. Maybe the answer is to find a FA from your small hometown who you grew up with and your kids and parents all know each other?
Oh, the stories we know about the nice insurance man you met at church. Shudder.
Look for someone who isn't trying to sell you something, that you pay a fee for time, just like with a lawyer. Try NAPFA, the National Association of Fee-Only Financial Advisors. But never forget it is your money.
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Old 07-13-2009, 07:20 PM   #56
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I just signed up to do a comprehensive financial plan with USAA. I will pay $81.00 a month(money back guaranteed if I'm not satisfied) for advice from a CFP(fee-based only) for up to one year. I want to rectify some things in my AA, as much as I can, without taking a bath. My elderly Aunt is a knowlegeable resource but right now all she talks is CDs and Treasuries. Which would be great except that I can't entirely jump ship from some of my positions. Have to work through some things that I flung myself headlong into in the past, focus on retirement, and, to a lesser degree, formulate my estate plan. I have done the survey of my assets via USAA's website and have an appointment to talk to the planner in several of weeks.
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Old 07-13-2009, 08:15 PM   #57
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I will pay $81.00 a month(money back guaranteed if I'm not satisfied) for advice from a CFP(fee-based only) for up to one year.
To make sure you're getting your money's worth, you should review "The Boglehead's Guide" and Bernstein's "Four Pillars" and then give the CFP a pop quiz.

See what opinion you can get of FIRECalc and "Work Less, Live More" too!
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Old 07-13-2009, 08:19 PM   #58
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I just signed up to do a comprehensive financial plan with USAA. I will pay $81.00 a month ... and have an appointment to talk to the planner in several of weeks.
Why would you start paying before the day of the appointment?
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Old 07-13-2009, 08:49 PM   #59
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Why would you start paying before the day of the appointment?
I don't, until we begin consultation. Everything I have done so far(the survey) is just a preliminary. They wanted to start sooner, but I am packing for a week's trip to London to visit my son...flying out on Thursday. I can cancel at anytime if I am not satisfied.
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Old 07-14-2009, 11:14 AM   #60
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Careful with the term fee-based. That doesn't mean anything.
There is only one term that means fee-only, and that is "fee-only".
Everything else is a hand in your pocket, so you better be sure you know how deep it goes and how far.

Having said this, our clients pay a percentage of AUM that is split between our firm and the manager. We are not fee-only and I did not want to give the impression that the only reputable CFPs are those that are Fee-only, just that you want to be absolutely sure what that "based" part is all about.
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