fixed fee investment advisor

[JJac]

http://www.evansonasset.com/

This company appears to offer investment advisory services for relatively low fixed fees.

Any thoughts on this company?

 

[LOL!]

There are many such companies that give you access to DFA funds with various low fees and services. Have you looked and compared it to www.cardiffpark.com www.altruistfa.com www.assetbuilder.com www.portfoliosolutions.com www.ifa.com et al.?

 

[FinanceDude]

How about Vanguard? They're even cheaper............

 

[saluki9]

He's a well educated guy who from what I hear runs a good practice

 

[heyyou]

I like the articles on the Evanson website. They cover the investment territory well without the IFA marching band attitude. One of the articles talks about the costs of professional services and that after set-up, the annual time and costs should be no more than what you would pay other professionals for their time. Note that only brokerages and advisors directly ask for a % of your assets for their services. How many other advisors talk like that? When someone is investing your money for market returns and not alpha, that seems reasonable to not ask for a % of the nest egg.

 

[saluki9]

When someone is investing your money for market returns and not alpha, that seems reasonable to not ask for a % of the nest egg.

That gets a little more complicated in practice. What tends to happen is that as people get more money they expect more services. If you are only providing investment management services then what you say may be true, but not always. Even for just management the clients on the higher end want better reporting, more frequent meetings, more meetings with their other advisers, and more hand holding.

 

[2B]

That gets a little more complicated in practice. What tends to happen is that as people get more money they expect more services. If you are only providing investment management services then what you say may be true, but not always. Even for just management the clients on the higher end want better reporting, more frequent meetings, more meetings with their other advisers, and more hand holding.

The people I've talked to don't seem to get much attention from their advisors no matter how much money they have in their accounts. My recent convert from having his money managed had well over $1MM in several accounts with a manager. He'd get a quarterly statement and an occasional note about portfolio changes. If he asked a question it would take a month or more before he'd get an answer. He could never reach the guy by phone. When he sent in the paperwork to move the account he did get a quick phone call.

 

[saluki9]

The people I've talked to don't seem to get much attention from their advisors no matter how much money they have in their accounts. My recent convert from having his money managed had well over $1MM in several accounts with a manager. He'd get a quarterly statement and an occasional note about portfolio changes. If he asked a question it would take a month or more before he'd get an answer. He could never reach the guy by phone. When he sent in the paperwork to move the account he did get a quick phone call.

What a shame. The people I work with and others I know in this business take it very seriously. At our firm if two weeks go by and somebody here doesn't talk to a client, then the client must be on vacation or doesn't want to be talked to.

 

[FinanceDude]

The people I've talked to don't seem to get much attention from their advisors no matter how much money they have in their accounts. My recent convert from having his money managed had well over $1MM in several accounts with a manager. He'd get a quarterly statement and an occasional note about portfolio changes. If he asked a question it would take a month or more before he'd get an answer. He could never reach the guy by phone. When he sent in the paperwork to move the account he did get a quick phone call.

A MONTH?

I guess I'm EXTREME then......I return all client calls within 24 hours unless I have a personal emergency or I am dead.

 

[saluki9]

A MONTH?
... or I am dead.

That's going to give you a whole new chicken and egg conundrum as far as editing your U-4 won't it?

 

[Rich_by_the_Bay]

While I now manage our own investments, my experience before was lukewarm. My advisor would meet with us annually, provide a pretty printed color report of our investments, and usually gloat about good performers (usually in part due to things only that firm foresaw) and explain why the lagging investments were lagging (always something no one on earth could have foreseen). The presentation felt more like a powerpoint show than a personal interactive exchange.

Fees were always included in the report but in my opinion were buried and confusing to tease out, so I would always ask and after some tap dancing I'd get the number. Rarely was I asked about our personal goals beyond "when to you want to retire" and "how much will you need." And as far as customized advice (for example, starting to shift gradually to larger cash holdings in anticipation of FIRE) there was little to none.

I came away thinking that there was a place for honest, fee-only financial advisors for that vast majority of folks who lack the interest, ability, or motivation to manage it themselves. But for those who are willing to make at least a modest effort to inform themselves (books, web, etc.) the added value may be small.

Having said that, I do plan on meeting with a fee only advisor as FIRE approaches, mostly to do a sanity check, make sure I am not doing anything tax-foolish, etc. I'll share up front with him or her that I wasn't planning on major changes in my investments or allocation unless they could point out some major gaffes in the plan (i.e. I'm not gonna start tweaking to [maybe] eke out another 10 basis points).

 

[FinanceDude]

That's going to give you a whole new chicken and egg conundrum as far as editing your U-4 won't it?

That's why they call it "Uphoria".............

 

[saluki9]

I came away thinking that there was a place for honest, fee-only financial advisors for that vast majority of folks who lack the interest, ability, or motivation to manage it themselves. But for those who are willing to make at least a modest effort to inform themselves (books, web, etc.) the added value may be small.

Many of the client's we work with have a very high level of financial sophistication. There is still a lot of value to be had in a good advisor, something that you can't replicate on an internet forum or by reading a few books.

 

[Olav23]

I assume it is sorta a vicious self-fulfilling cycle.

If you find a good one, you start recommending him/her to others and others get word. They get more business. More business gives them less time to do all the previous things that drew you to them in the first place...

 

[FinanceDude]

Many of the client's we work with have a very high level of financial sophistication. There is still a lot of value to be had in a good advisor, something that you can't replicate on an internet forum or by reading a few books.

It's not scientific, but FWIW, I have only met 3 people with an investable portfolio over $2 million that go it alone. However, I have met MANY MANY people with a portfolio under $1 million that go it alone..................

 

[saluki9]

I assume it is sorta a vicious self-fulfilling cycle.

If you find a good one, you start recommending him/her to others and others get word. They get more business. More business gives them less time to do all the previous things that drew you to them in the first place...

Much like good active managers many good advisors have closed practices

 

[saluki9]

It's not scientific, but FWIW, I have only met 3 people with an investable portfolio over $2 million that go it alone. However, I have met MANY MANY people with a portfolio under $1 million that go it alone..................

Oh I've met plenty of HNW folks who are do it yourselfers. I was called into a sales presentation the other day (they usually don't let me near potential clients) to do a quick and dirty evaluation of a prospects portfolio. The guy have 4.0M+ in liquid assets. From his derivative positions we estimated his value at risk was far in excess of $2M in any 30 day period. The 75 year old guy didn't have too much of a problem with that.

Hey, you can't save the world

 

[Rich_by_the_Bay]

Many of the client's we work with have a very high level of financial sophistication. There is still a lot of value to be had in a good advisor, something that you can't replicate on an internet forum or by reading a few books.

My gut tells me that what you say is true, but could it be that there is another "value peak" for those who are very financially sophisticated or wealthy, and whose investment goals are highly sophisticated?

I wonder if there might be a large group of naive investors truly in need of good advice and guidance on the one hand, and a small but affluent group with complex financial goals or circumstances on the other hand. Both derive net value from cost of a good financial advisor.

Then you have that third group which I and perhaps others identify with, who are well-to-do but not slam-dunk multimillionaires; seek a sound plan recognizing the importance of the basic issues of diversification, SWR, minimal distributions; use mostly low cost index or managed mutual funds, etc.

Do you think there is net value for this type of investor in using a financial advisor charging 1 to 1.5% percent-of-assets? Fee-for-service may be a different story. I'm not asking in a cynical or challenging way, just curious and open-minded about it.

 

[saluki9]

It's an interesting question Rich. It's really two questions

1. Do I need the advisor
2. How should I pay for it?

I think part of the problem people here have is that they assume that all people are like them. I see a lot of people's statements. I can't tell you how many do it yourself folks went all cash in 2001 and didn't think about climbing out until last year. Would they have been better off paying 1% to a pro who would keep them focused? I think so.

In your case you probably are better off with a hourly or project fee based advisor. The problem I have is that many fee based guys don't do it as 100% of their business and the fee clients get shafted as far as attention. The really good fee based guys I know are VERY expensive.

 

[FinanceDude]

It's an interesting question Rich. It's really two questions

1. Do I need the advisor
2. How should I pay for it?

I think part of the problem people here have is that they assume that all people are like them. I see a lot of people's statements. I can't tell you how many do it yourself folks went all cash in 2001 and didn't think about climbing out until last year. Would they have been better off paying 1% to a pro who would keep them focused? I think so.

In your case you probably are better off with a hourly or project fee based advisor. The problem I have is that many fee based guys don't do it as 100% of their business and the fee clients get shafted as far as attention. The really good fee based guys I know are VERY expensive.

Makes sense to me.............I think people on here and in general confuse a true fee-based advisor with the 'average" insuranceplanner/financial rep/mutualfundspecialist/stockbrokerthatdabblesineverything/stocktrader, etc

 

[2B]

Do you think there is net value for this type of investor in using a financial advisor charging 1 to 1.5% percent-of-assets? Fee-for-service may be a different story. I'm not asking in a cynical or challenging way, just curious and open-minded about it.

I think the answer is no.

I've run across too many people that have an "advisor" that takes 1 to 1.5% off the top every year and puts them into high fee (1.5 to 2%) mutual funds. I have always assumed that there was some form of kick back involved for putting people into the high fee funds.

So, my basic experience says that people get put into situations where they are 2 to 3% poorer as a result of the "advisor" versus reading a few books/articles on asset allocation and the impact of fees.

I have never run across anyone with an advisor that was being "taught" anything other than to have blind faith in trust their advisor. I have not run across anyone with an advisor outperforming a broad mixture of asset classes over a long period of time. They were, however, always "outperforming" something. Unfortunately, the people I have talked with really didn't usually have a clue.

The "not having a clue" aspect is the only reason I do not call for making the activity of calling oneself a "financial planner" a capital crime. Education is the key for the great unwashed masses of us poor folks with less than many millions to possibly get there someday. I prefer to think that I'll never make it that high because I'll have the good sense to ER before that time comes.

I do know that back in the days when I had a "broker" that was usually the net result of taking his advice. When discount brokers started to be popular, all of the former brokers became (overnight) "financial advisors" where for a "minimal fee" they would manage your money. I never fell for the pitch so I don't have my personal tragedy to tell. I do know that if I had my return shaved by 2 to 3% every year I would be a lot farther from ER than I am today.

If by some chance I found myself in a complicated tax or estate issue, I would certainly hire the necessary experts to provide me with advice. I can assure this forum that I won't be paying 2 to 3% of my assets every year forward for this consultation.

I know there are a number of "financial advisors" on this forum and there certainly is a place for their input. Maybe, just maybe, some of these advisors provide good value to their clients. If they do, they'll be the first ones I've run across. With that being my history, I will continue to treat their comments with a grain of salt.

 

[cute fuzzy bunny]

It's not scientific, but FWIW, I have only met 3 people with an investable portfolio over $2 million that go it alone. However, I have met MANY MANY people with a portfolio under $1 million that go it alone..................

Whats the percentage of people that you know that have over $2M vs those that have under $1M?

Whats the percentage of people that have over $2M and therefore dont give a hoot how much they're paying someone to do some work for them vs those under $1M?

We might not have the cause and effect straight here

I've got your low fixed fee investment advice right here. Buy a target retirement fund in a date compatible with your risk tolerance and/or date of actual retirement. Now send me five bucks.

 

[saluki9]

I think the answer is no.


I know there are a number of "financial advisors" on this forum and there certainly is a place for their input. Maybe, just maybe, some of these advisors provide good value to their clients. If they do, they'll be the first ones I've run across. With that being my history, I will continue to treat their comments with a grain of salt.

I'm not an advisor per se, but I do work in an advisory (i.e fee only) firm. I can't speak to what you've seen as it isn't the business I know nor typical of what I see. There are many firms who do charge reasonable fees much less than the 100 to 150bps you mentioned. Despite what you say there are many clients who are happy with the service they get, they certainly have many other choices today. I know for a fact that many of the clients our firm works for are employed in other areas of the financial services business. Perhaps they too are just ignorant folks being taken for a ride, but if that were to case the relationships would be short which is the total opposite of what happens.

I'm sorry that you have had bad experiences in the past, but it's no reason to steer other people away from the valuable advice that a good advisor can get. Sadly as is the case for our firm employing good people (hopefully I'm included in that list) is a very expensive proposition. Therfor we aren't able to offer our services to those with less than 1.5-2M in liquid assets (without charging some of those off the wall high fees). Perhaps if you're so intent on it you should go file a form ADV and start advising them for free?

 

[LOL!]

Many of the client's we work with have a very high level of financial sophistication. There is still a lot of value to be had in a good advisor, something that you can't replicate on an internet forum or by reading a few books.

I read this saluki9 and wondered if you could give a "for instance" of the "lot of value to be had in a good advisor". Should I worry that I am missing something? So far, I haven't seen any benefit from an advisor for me. OK, I can think of one thing: My spouse will not rollover an old 401k with assets of about 0.1% of our net worth and terrible funds. I can nag until the divorce papers are served, so maybe an advisor would be more diplomatic and actually get something done?

 

[saluki9]

I read this saluki9 and wondered if you could give a "for instance" of the "lot of value to be had in a good advisor". Should I worry that I am missing something? So far, I haven't seen any benefit from an advisor for me. OK, I can think of one thing: My spouse will not rollover an old 401k with assets of about 0.1% of our net worth and terrible funds. I can nag until the divorce papers are served, so maybe an advisor would be more diplomatic and actually get something done?

Because I was trying to be polite and avoid saying that there are a lot of "know it alls" here. It comes down to this, if you feel that you're an expert in everything, or that any topic can be learned by a few minutes of web surfing then you aren't a good candidate for hiring an advisor. That being said, you would be shocked at the variety of questions we get from people.

Should I leave my job?
Is this severance package fair?
What health plan should I take at work?
Can you help my kids with... (NAME ANYTHING)
Can you help me find a realtor
Should I buy a second home
Where should I buy a second home
budgeting
What company should I use for...
Bill payments
please charter me a jet to and from....
Should I contest my property taxes?
should I exercise my stock options?
Should I take this new job?
Will you meet my attorneys, accountants, etc and make sure they are doing what they are supposed to?
Can you arrange to have my car moved from one city to another?
Are my other advisors charging me fairly?
Should I invest in my (sons, BILs, FILS) business?
Can you find me a 1031 exchange property?
Should I keep paying my insurance premiums
should I have an insurance trust?
How should we divide our assets up among our kids?
Who should my trustee be?
Will you be my trustee?
Can you get me a mortgage?
Can you help my relative get out of debt?
Will you set up our Quicken files to download all of our accounts
will you run performance reports for our outside assets?
Can you help find insurance for my Florida, CA, NC, condo, ours has been cancelled?


That's a small list of the questions a good advisor gets. If the average person reading this thinks about what they have learned in this forum about planning and their investments, imagine what you learn when you looks at hundreds of people's personal finances? As for me, I'm just the money guy, so I sure don't have the answers to all those questions. I hit the planners up at my shop with questions almost as much as the clients do.