Family and CFP

saluki9 said:
Sadly no, which is a real bummer!

I will say that I severely compromised my independence by accepting a free fleece vest from Barclays iShares. I look pretty sweet in it though :cool:
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So, you can be bought? I got an NCAA basketball in the mail from some guy I nver heard of. I think the kids threw it at the school bus as it rolled by and it got smushed..........:eek:
 
Wow! Looks like I've started a pretty active thread. I'll have to start reading from the beginning and I'll answer people's questions along the way. I'm sure I'll have some additional questions as well. This forum is great!
 
clifp said:
I think that disadvantages are primarily from his perspective. Will I put my wife in an awkward situation with her brother if I suggest investments that don't work out.

In general there are three issues with using a financial adviser
  • Is he competent
  • Is he trustworthy
  • Does his fees justify what I can do on my own.
I think having a family member who is both knowledgeable and willing to help you with investments is terrific benefit. The same way that having a doctor, lawyer, CPA, or Vet in the family is great for if nothing else getting a second opinion.

Of all the silly letters that go behind financial advisers names the only two that should impress an individual investor, are CPA, and CFP in that order. The programs are rigorous and the pass rates for either credential are lower than the bar exam. I have an MBA, 25+ years of successful investing, and I can tell you that would take a full year of study for me to have a chance at passing a CFP. I have yet to meet somebody who has passed the CFP on their first try.

So while a CFP is no guarantee that guy is competent is an indication. Trustworthiness is an issue you will have to judge for yourself.

The final issue is fees, if he waives there is at least a reasonable chance he could make you more money than sticking your money in a couple Vanguard funds.

So my advice is unless your think your sister married, and stupid liar, you should at least listen to his advice. Now I don't think this gets you off the hook about learning about investing, because it is after all your money and your future. But to me 90% of successful investing is A. Saving more than you earn. and B. not doing anything stupid.
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I agree, I do need to continue to learn about investing and I also think that its important for me to actively manage my portfolio even if I do decide to work with a financial advisor. Ultimately its my decision on what to do with the money.

I do think that he's trustworthy and that is why I am considering using his services. I would be very unlikely to hire a financial advisor on my own because I would have a hard time finding someone that I trust to look out for my best interests. Also, by the time you add in their fees, I would think that I would do almost as well with a low cost fund such as Vanguard. However, with him waiving his fees, I may be able to do a little better.
 
brewer12345 said:
Ah, I'd argue there is one more designation that one might value, and getting it makes getting a CFP look like a walk in the park. Just sayin'...

To OP:

Given that your BIL is treating you as a family member and he is bound by the ethical standards that go with a CFP, I would be willing to trust him were I in your shoes. It is up to you to judge his competency. More importantly, you should make sure they you see eye to eye with him. Make sure he understands your goals, risk tolerance, etc. and doesn't color outside the lines with your portfolio.

I manage accounts for my parents and my wife's parents, and I manage them A) very carefully and B) with varying risk profiles (all of which are different from my own). It can work out just fine to let a family member help you.
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He has mentioned the ethical standards that he is bound to as a CFP in the past and from what I have seen with how he handles other family members' accounts, I believe that he takes this very seriously.
 
73ss454 said:
Read the first post, the BIL says he'll waive all fees. To me that would be fee based fees, 12B1 and ER fees. So most likely the BIL can't and is not going to do what he said he would.
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BIL or the original post didn't say "all" fees. I'm still trying to figure out which ones can and can't be waived and what impact that will have on investment choices and returns. This forum is helpful in coming up with what questions I need to ask him.
 
FinanceDude said:
I'm not missing your point, you are not understanding how things work. BIL of OP can buy LOAD mutual funds at NAV, because he's registered. With some fund families, you can buy at NAV for family members, so he could get American Funds or Franklin or Oppenheimer for NAV for family members. I'm sure NOT everyone on here knows that...........;)
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FinanceDude. This is one of the things that BIL mentioned. What exactly is the benefit of this? Thanks.
 
allwork&noplay said:
My brother-in-law is a CFP for a major brokerage firm and currently handles my wife's Roth IRA. I know that many on this forum don't care for Financial Planners due to the high fees and poor performance compared to low cost DIY funds through places like Vanguard. I tend to agree with that perspective, but in this case I think he will look out for our best interests.

He waives the fees for her and will do the same for me as a family member. Obviously there is the issue of mixing family and money, but other than that, are there any advantages or disadvantages to investing through him versus Vanguard? Thanks.
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Well, he didn't say some fees either. You said "he waives the fees" to me that would mean that there were none.

After thinking about this I would just put your money in a low cost company such at Vanguard or Fidelity and take the free evaluation and advise that you would get. Your BIL would still be getting his 12B1 fees and you'd be paying higher costs.

Now if that's OK with you that he's getting his fees and you don't mind paying them then use him. Just remember these fees are coming out of your hide.
 
brewer12345 said:
I manage accounts for my parents and my wife's parents, and I manage them A) very carefully and B) with varying risk profiles (all of which are different from my own). It can work out just fine to let a family member help you.
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brewer,

Did you offer to manage their accounts, or did they come to you asking for you to manage your accounts?

********************

allwork&noplay,

Same question.

********************

My MIL is convinced that market timing and stock selection are keys to good investing, and I've not been able to convince her otherwise, nor to get her to consider low-cost indexing. It's her money and she's an adult human being, so I've backed off and let her know that if she is interested in discussing finances, I'm there for her.
 
TickTock said:
brewer,

Did you offer to manage their accounts, or did they come to you asking for you to manage your accounts?

********************

allwork&noplay,

Same question.

********************

My MIL is convinced that market timing and stock selection are keys to good investing, and I've not been able to convince her otherwise, nor to get her to consider low-cost indexing. It's her money and she's an adult human being, so I've backed off and let her know that if she is interested in discussing finances, I'm there for her.
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You asked Brewer, but I will answer anyway. All but one of mine came to me. One I knew was making bad choices so I stepped in to volunteer.
 
saluki9,

Thanks.

I see a big difference in a family member coming to you vs. you offering to manage their finances.

(As noted above, I judge my MIL's choices to be sub-optimal, so I offer to talk finances with her, but don't push it when she's not interested.)
 
saluki9 said:
Gosh, I love this crowd. No, I'm sure this guy knows nothing about investments that can't be learned from a bunch of strangers on the internet :rolleyes:

I manage money for most of my family members. I can assure you that I look after those accounts very closely.

If you trust him, and he treats you well as a client I don't see what the problem is? My only caveat is that I tend to shy away from people who want to waive all of their fees for me. The fact is that he is running a business and you want this account to be important to him.
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OK, you just admitted to violating fair dealing. Sorry, exam reflex. :)
 
FinanceDude said:
I think I would rank them CFA, CFP, and THEN CPA. I know TOO MANY CPAs that are HORRIBLE at managing their money or any others for that matter..........:eek: I know saluki is a CPA but he "saw the light" and got a CFA..........



The first time pass rate on CFPis 52% or so. I know at least 5 people who passed it on their first try.



Agreed..........
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I know you did not put them in order... but people who think that a CPA knows anything about investing has been snowed by someone....

I am a CPA but know a lot about investing since I also got my MBA in finance... but a CPA knows about ACCOUNTING.... and any more is just... well, them learning something else...

The initial pass rate for CPA used to be 20% (and I think that was per section, not the whole thing... but I could be wrong)...
 
saluki9 said:
The CFP exam was a joke compared to the CPA or CFA exams. Even the CFA didn't compare to the CPA in the sheer amount of material to cover. That being said, 99% of it doesn't have anything to do with investments or financial planning.

Most people would be shocked if they knew how little training most CPA's have even in personal taxes. It was hardly a blip in my accounting schooling or CPA study. I had to learn most of it through my work.

I'm just glad my exam taking days are over.
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LOL... should have read down a few posts :D

That being said.... do you know what CPA stands for:confused:?







Can't Pass Again :D
 
TickTock said:
brewer,

Did you offer to manage their accounts, or did they come to you asking for you to manage your accounts?

********************

allwork&noplay,

Same question.

********************

My MIL is convinced that market timing and stock selection are keys to good investing, and I've not been able to convince her otherwise, nor to get her to consider low-cost indexing. It's her money and she's an adult human being, so I've backed off and let her know that if she is interested in discussing finances, I'm there for her.
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I have asked my BIL for advice on several occasions and he recently offered to take on my Roth account, which is a fairly small account. Most of my retirement savings is in my 401k.
 
TickTock said:
brewer,

Did you offer to manage their accounts, or did they come to you asking for you to manage your accounts?
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Different things happened with different people. With my parents, I came to them because otherwise the money would have languished in savings accounts. I am the executor of their will, will eventually become caretaker/POA if its necessary, and have been their advisor on all things financial for several years.

My MIL originally asked me to figure out whether she would come out ahead by buying extra years of pension credit (it was worth six figures by my estimation). One thing lead to another and I ended up managing her IRA, which is most of her invested assets.

My FIL is a classic smart guy who is dysfunctional about money (but frugal, which is his saving grace). He sold a rental house and didn't want to put the proceeds with the advisor who manages his retirement accounts, so he asked me to manage the account.
 
Texas Proud said:
LOL... should have read down a few posts :D

That being said.... do you know what CPA stands for:confused:?

Can't Pass Again :D
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Seriously! I have my Becker CPA books on my shelf in my office. Every once in a while I open them up just to see what I once knew.

I can't believe I was able to store all that crap in my brain if only for a year or so.
 
73ss454 said:
That's great but Saluki just posted that the 12B1 fees yearly ER fees would continue. So unless the BIL used no load funds there would be no way he could waive his fees and commissions for a family member. I don't necessarily think he should because he should get paid for his experties but he's the one that said he would waive them.

So back to square one. I'd like to see what the BIL would say about advising what funds he should put his money into with no loads and low expenses.
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I think that 73ss454 has pursued a very valid line of questioning and it was really what I was getting at with my original post. I figured there would be certain fees that could and could not be waived, but I need to find out from BIL which ones those are. IF BIL is just waiving his advisory fee and I still have to pay high management fees and 12b1 fees, then wouldn't I be better off just putting my money into a low cost fund?
 
allwork&noplay said:
I think that 73ss454 has pursued a very valid line of questioning and it was really what I was getting at with my original post. I figured there would be certain fees that could and could not be waived, but I need to find out from BIL which ones those are. IF BIL is just waiving his advisory fee and I still have to pay high management fees and 12b1 fees, then wouldn't I be better off just putting my money into a low cost fund?
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Until you find out WHICH fees he's waiving, and which ones he's not, all you can get from us is opinions and conjecture.........;)
 
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