Who has used a financial advisor?

[freebird5825]

...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.

 

[Kabekew]

...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?

 

[Khan]

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'.

 

[REWahoo]

Some of the biggest ripoffs have been from 'affinity groups'.

Yep. One guy in particular Madoff with billions...

 

[Sarah in SC]

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.

 

[WhoDaresWins]

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.

 

[Nords]

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!

 

[LOL!]

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?

 

[WhoDaresWins]

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.

 

[Sarah in SC]

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.

 

[FinanceDude]

CFPs don't sell investments, they sell their advice and time. Period.

You are wrong. being a CFP does not mean you "take an oath" not sell investments or make commissions and/or fees.......

It means you have been certified by the College of Financial Planning to offer investment advice on areas like estate planning, college planning, etc. It is a very hard test but it does NOT mean you can't sell investments, annuities, whatever........

 

[FinanceDude]

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.

There are 600,000+ registered FAs in the USA, how many have you seen in the papers, 6? 10?

 

[FinanceDude]

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.

Most fee-only planners are out of business. Once online brokers like Vanguard started bought the software and started marketing it to their members, the business model was toast. My latest count is NINE fee only planners that have went out of business in the past 4 years.........

 

[Sarah in SC]

You are wrong. being a CFP does not mean you "take an oath" not sell investments or make commissions and/or fees.......

It means you have been certified by the College of Financial Planning to offer investment advice on areas like estate planning, college planning, etc. It is a very hard test but it does NOT mean you can't sell investments, annuities, whatever........

You've got some bad info my friend.

The College for Financial Planning is NOT the same thing as the Certified Financial Planner Board of Standards. The College, where I completed my educational component of the CFP requirements, is a fine institution, but does not grant use of the CFP marks.

Those are only given by the Board of Standards, upon completion of the educational program, the 10 hour comprehensive exam, a 3 year apprenticeship, and proof of a 4 year degree. There are also continuing education requirements.

I can't speak to the business model, but I know a number of fee only national organizations exist. Not everyone has to sell insurance and annuities to make it in the business, I don't think.

 

[FinanceDude]

You've got some bad info my friend.

The College for Financial Planning is NOT the same thing as the Certified Financial Planner Board of Standards. The College, where I completed my educational component of the CFP requirements, is a fine institution, but does not grant use of the CFP marks.

Those are only given by the Board of Standards, upon completion of the educational program, the 10 hour comprehensive exam, a 3 year apprenticeship, and proof of a 4 year degree. There are also continuing education requirements.

I can't speak to the business model, but I know a number of fee only national organizations exist. Not everyone has to sell insurance and annuities to make it in the business, I don't think.

The point I was trying to make is that freebird stated that CFP's DON'T sell investments, which is NOT the case, obviously.......

 

[Sarah in SC]

I got that, FD, but you know me...accuracy always. There's already enough misinformation out there about our hallowed and maligned profession. And I want these folks on the board to think you and I are the SMART ones.

 

[FinanceDude]

I got that, FD, but you know me...accuracy always. There's already enough misinformation out there about our hallowed and maligned profession. And I want these folks on the board to think you and I are the SMART ones.

The College provides the curriculum, the Board of Standards confers the mark.

BTW, the 3-year apprenticeship is not really an apprecticeship, it is 3 years of experience in financial services. The 4 year degree has been a standard for many years. I have not taken the exam but I have all the curriculum. My finance degree enables me to test out of 3 modules if I wish, based on a transcript review.

My business partner has been a CFP since 1988 and is an RIA. By the time he retired in 2-3 years, I will be a CFP.......

 

[FinanceDude]

And I want these folks on the board to think you and I are the SMART ones.

There's at least a hundred engineers on here that might beg to differ.....

 

[Dennis]

FYI #2.. After determining I only needed Mostly ALL BONDS for my retirement and some of them in Global and EMD's?

1. I went searching for a Bond Guru..
2. Comparing them to the Likes of Bill Gross @ PIMCO and Wm. Larkin -Cabot Mgmnt. /Kiplinger likes to refer too and some others
3. Most Did not Like just owning ALL Bonds and I suspect it was due to they could not make enough off them, buying and selling them for me..
4. Those that came up with Nice reports on their Recommended Ports with Equities and Some Bonds? I just pulled out my Ports on ALL Bonds and none hadn't beatne them for the past 5 & 10 yrs+ and I just got up and left..
5. Apparently Making their 1/2-1% annual Fee to mge my Account on $500k wasn't enough for them, basically just to be caretakers..
6. And to really put them on the defensive? Ask where THEIR Retirement $ is in? If they have A Decent Mid to Hig 6 or 7 figure one, they best be alot into bonds..
7. And a couple I had fun(d) with and Showed them a Port with just owning TGBAX and FNMIX funds for the past 11 yrs.. ( Ave +11.56% apy and 6.85% Ylds) and asked them why should I own anything else, let along your Index Equity and Bond Funds?
They tried to justify it by pushing the Lower Fee's in my face and That's a lame excuse.. Being a Penny Wise and A Dollar Foolish..
8. Another Putting on the Defense move? Ask if they came from an Insurance background? Most got started in that field..( I used to do Some Group Health and Life Ins. Yrs back an that is all most wanted to graduate upto, getting their Series 6,7 license and become a CFP and A CLU.. And many came from the ? Real Estate Business..
9. And I love Mark Hanes-Squakbox in the AM on CNBC.. he and I have similar Opinions and Personalities..I had him in my Limo a few times yrs ago and is down to earth and Ask's and tells it like it is..Like it or not..and his Personal Comments are ? Priceless.. Should be More like Him on CNBC

Bottomline? Most Want to Fund THEIR RETIREMENT with YOUR Retirement $..
LOL ;-)

 

[FinanceDude]

FYI #2.. After determining I only needed Mostly ALL BONDS for my retirement and some of them in Global and EMD's?

1. I went searching for a Bond Guru..
2. Comparing them to the Likes of Bill Gross @ PIMCO and Wm. Larkin -Cabot Mgmnt. /Kiplinger likes to refer too and some others
3. Most Did not Like just owning ALL Bonds and I suspect it was due to they could not make enough off them, buying and selling them for me..
4. Those that came up with Nice reports on their Recommended Ports with Equities and Some Bonds? I just pulled out my Ports on ALL Bonds and none hadn't beatne them for the past 5 & 10 yrs+ and I just got up and left..
5. Apparently Making their 1/2-1% annual Fee to mge my Account on $500k wasn't enough for them, basically just to be caretakers..
6. And to really put them on the defensive? Ask where THEIR Retirement $ is in? If they have A Decent Mid to Hig 6 or 7 figure one, they best be alot into bonds..
7. And a couple I had fun(d) with and Showed them a Port with just owning TGBAX and FNMIX funds for the past 11 yrs.. ( Ave +11.56% apy and 6.85% Ylds) and asked them why should I own anything else, let along your Index Equity and Bond Funds?
They tried to justify it by pushing the Lower Fee's in my face and That's a lame excuse.. Being a Penny Wise and A Dollar Foolish..

Bottomline? Most Want to Fund THEIR RETIREMENT with YOUR Retirement $..
LOL ;-)

Did you REALLY think you would find a bond "guru" as good as Bill Gross? Wow, that's interesting.........

Sounds like you had no intention of using an advisor and just wanted to show them up, and it ended badly........

BTW, most true equity FAs are not big bond guys.......

 

[Sarah in SC]

The College provides the curriculum, the Board of Standards confers the mark.

BTW, the 3-year apprenticeship is not really an apprecticeship, it is 3 years of experience in financial services. The 4 year degree has been a standard for many years. I have not taken the exam but I have all the curriculum. My finance degree enables me to test out of 3 modules if I wish, based on a transcript review.

My business partner has been a CFP since 1988 and is an RIA. By the time he retired in 2-3 years, I will be a CFP.......

There are a number of other colleges providing the curriculum now, including the American College and my own hometown favorite, the College of Charleston. It is definitely not limited to only the College for Financial Planning, although that is where both of my bosses got their educations.

The four year degree program is in fact new, and had I been able to complete my educational component in a year's time, I would not have had to have the four year degree at all in order to have the CFP. But I knew it would take longer than that, so I resigned myself to the new requirements--they were effective March 1, 2007.

I would encourage you to take all of the modules, if for no other reason then to prepare for the exam. It is a mother! Not as hard as the CFA, of course, but for folks like me--way tough!

Congrats on working towards the CFP--it took me three years to complete the courses and two tries at the exam. I hope you are able to finish up much sooner!

 

[ERD50]

FYI #2.. After determining I only needed Mostly ALL BONDS for my retirement and some of them in Global and EMD's?
...

4. Those that came up with Nice reports on their Recommended Ports with Equities and Some Bonds? I just pulled out my Ports on ALL Bonds and none hadn't beatne them for the past 5 & 10 yrs+ and I just got up and left..

LOL ;-)

So following that logic, if you went to them in Jan 2000 and they recommended a balanced portfolio, you would have shown them that a 100% stock portfolio would have beat them for the past 5 & 10 yrs+ and just got up and left..

-ERD50

 

[FinanceDude]

So following that logic, if you went to them in Jan 2000 and they recommended a balanced portfolio, you would have shown them that a 100% stock portfolio would have beat them for the past 5 & 10 yrs+ and just got up and left..

-ERD50

Like I said, he's not likely ever to be a client for an FA, but cherry-picking funds and stats to prove his point is quite funny, and looking for a "bond guru" like Bill Gross is flatout hilarious.......

I use PIMCO Total Return bond fund with clients because Bill Gross manages the fund. There's noone I have found that's smarter about bonds than him, but I never say never......