Financial planner or do it yourself?

[NoOneGetsIt]

We have never used a financial planner. Yesterday in a starbucks we had an indepth conv with a guy who helps dentists with financial planning (he was not trying to sell us we are not dentists)

Curious how many on this blog used financial planners versus did their planning themselves? What did you do?

 

[MichaelB]

Here's a poll from a year ago on that http://www.early-retirement.org/for...al-advisor-definitions-in-post-1-a-60948.html

 

[F4mandolin]

Both. Use Edward Jones for almost half of our stash....started up with them before I did more reading. I still think they are "ok", especially since I don't retain the financial info as well as I would like. Good for some hand holding, but I do have to fight them off on selling me things I don't want (example=variable annuities...twice lately....they really really wanted me to buy some of those). A little over half in TSP which will either stay there or get moved to Vanguard at some point.....although they have been trying hard to get their hands on that money as well.

 

[brett]

We do not do it ourselves. About two years ago we moved from a combination of a bank advisor and a stockbroker to a fee for service advisor.

We reviewed our portfolio and uncovered all of the known service charges and the unknown ones (these were the largest, such as MERs etc). We were not happy, nor were we happy with the advice and performance. We came to the conclusion that our money was working for them, not us. Now that we have a fee for service advisor we can quickly determine the cost/benefit. Wish we had done this sooner. We just returned home from six months of travel. Never had to worry about anything as we had confidence in our advisor...something we did not have before.

There is a cost, everyone has different abilities, interests, and strengths. You have to weigh this up. My best advice would be to completely understand the real costs (and watch out for the hidden costs) with each option and then weight the benefits.

When we started our seach we found that the real pros did not go out and shill for business. They have an established client list and work primarily from referrals.

 

[travelover]

I buy my own birthday cards and save $10,000 a year.

 

[heeyy_joe]

Here's a poll from a year ago on that http://www.early-retirement.org/for...al-advisor-definitions-in-post-1-a-60948.html

+1
The poll has spoken.

 

[timo2]

I suppose it depends upon how complex you want to invest. I like simple.

I'd had two financial planners (both fee based). The first one, in my 30's gave me a plan and advice that lasted the next 20 years without having to go back to him (#1 memorable line: "don't be greedy when investing" - it saved me in the big crash in 2007-08). The last planner I conferred with a couple years ago right before the big crash was useless.

 

[NanoSour]

Have never used a planner. The typical 1% of assets is a huge hit to your return. In today's environment of projected 5-6% returns, that giving away 20% of your profit. Much easier to low-cost index it with Vanguard, Fidelity, or Schwab. It's really is not that complicated.

Spend a week on this or the Bogleheads forum and you'll be well armed to invest for yourself and help any others that need investment advice.

 

[HighRoller]

I do have a specific advisor/planner assigned to me with my Schwab account (at no cost) but I have never really used him other than to have him explain some of their products. So I'd say I'm a DIY investor.

 

[Malcolm2]

There is no harm in a basically self-directed person getting an outside opinion before a major life event such as retirement. I can' imagine it would be worth $2-$3k for this unless you know little about retirement planning. If that is the case perhaps you should educate yourself.
Recently I looked around for such an outside set of eyes as I am near my first retirement. After reviewing options at Schwab, and outside financial planning, fee only firms, I ultimately went with a USAA CFP. They prepared a very useful 55 page report which cost me exactly $0. They do not try to sell you any of their products, not sure if Schwab does that.
If you are a USAA member I recommend checking it out.

M2

 

[SumDay]

I'm mostly self-directed, but we're ~4 years out from retirement, so I availed ourselves of the services of a fee only FP I found through NAPFA.org. Her suggestions for moving my "too much cash" was to put it in Vanguard Wellington and/or Wellesley, which I did. We'll use her again as we get closer to retirement to review SS options, asset allocation, etc. For us, it was money well spent. I question my abilities to manage thi$, and it was nice to have a professional pat me on the head and say "good girl". Of course, YMMV. It helps me sleep better, and at this age, you can't put a price on that.

 

[clifp]

There is no harm in a basically self-directed person getting an outside opinion before a major life event such as retirement. I can' imagine it would be worth $2-$3k for this unless you know little about retirement planning. If that is the case perhaps you should educate yourself.
Recently I looked around for such an outside set of eyes as I am near my first retirement. After reviewing options at Schwab, and outside financial planning, fee only firms, I ultimately went with a USAA CFP. They prepared a very useful 55 page report which cost me exactly $0. They do not try to sell you any of their products, not sure if Schwab does that.
If you are a USAA member I recommend checking it out.

M2

Another nice benefit of USAA that I was unaware of. Fidelity, Schwab, and Vanguard all provide retirement/financial planning at reasonable prices between $0-$1,000 depending on a bunch of factors. I think it make sense to take advantage of at least one such service before a major event like retirement, even if you are DIY.

 

[racy]

We used a fee-based planner once. As a result of the analysis of our finances we discovered the high fees being charged DW's employer for their 401k. When she mentioned this & suggested switching to Vanguard her boss discontinued the 401k plan! No more company match...

Since then we've kept our mouths shut, and done our own planning.

 

[SumDay]

When she mentioned this & suggested switching to Vanguard her boss discontinued the 401k plan!

This makes me angry, and it doesn't even impact me...

 

[Rustward]

We used a fee-based planner once. As a result of the analysis of our finances we discovered the high fees being charged DW's employer for their 401k. When she mentioned this & suggested switching to Vanguard her boss discontinued the 401k plan! No more company match...

Since then we've kept our mouths shut, and done our own planning.

I once had an employer (El Diablo, the owner) who behaved in this way.

After somebody left, they discovered that the guy who left had been squirreling away way more pens, pads of paper, and binder clips into his desk than any one person could productively use. All that stuff got put under lock and key. We then had to request these items from the 20 something admin (nice girl, just very inexperienced in working in an office) who would retrieve what we requested, then log the event into a spreadsheet for El Diablo. I started buying my own stuff and attaching photocopies of the receipts.

I went in only two days per week, w*rking the other five from home. One day I walked into the men's room and was greeted by an 8.5 x 11 sign in about 40pt font stating that we were not allowed to flush feminine hygiene products down the drain. This was an office of, maybe 15 males and two females.

It was a little fly-by-night place run by a bunch of amateurs. There is also a 401K story, and I choose not to go there -- the 401K story.

 

[NanoSour]

After reviewing options at Schwab, and outside financial planning, fee only firms, I ultimately went with a USAA CFP. They prepared a very useful 55 page report which cost me exactly $0. They do not try to sell you any of their products, not sure if Schwab does that.
If you are a USAA member I recommend checking it out.

M2

For what it's worth, I too used a USAA CFP to review my situation before my decision to ER (still pending) and I was not impressed at all. Felt like I was talking to a very inexperienced 25 year old right out of college who spent all of 10 minutes plugging numbers into a program which, yes did spit out a 55 page report. Wasn't worth the paper it was printed on.

From my POV, if you are serious about such a hugh decision as retirement, you must educate yourself and be very comfortable which the plan which YOU put in place.

Also, make no mistake about it, the USAA CFP is definitely there to try to sell you something.

Full disclosure, have been with USAA since '87 and am very please with the service they've provided over the years. Although, I must say I don't like seeing the advertisements on TV. Tells me a new day is dawning and who knows what that will bring.

 

[samclem]

One day I walked into the men's room and was greeted by an 8.5 x 11 sign in about 40pt font stating that we were not allowed to flush feminine hygiene products down the drain.

I'll betcha crumpling up that sign and flushing it would stop up the works. I'd find out, anyway.

"Yep, I found yer problem . . ."

 

[MBAustin]

I'll betcha crumpling up that sign and flushing it would stop up the works. I'd find out, anyway.

"Yep, I found yer problem . . ."

+1

 

[Tyro]

We were self-directed until ER was sort of thrust upon us (primary employer was going bankrupt, and people were bailing like rats off a sinking ship) ~2 years ahead of schedule, so we hired a fee-only CFP to help figure out how bad/well off we were and our chances of success w/o having to go back to w*rk for those 2 years.

There were some good points & some bad points, but (unfortunately) some of the advice given & followed was bad, resulting in our missing out on the recent run-up, which would have given us those 2 years worth of add'l assets.

As it turns out, we're borderline FI, and going back to doing it ourselves.

For someone who has time on their side, I'd suggest looking into adult continuing ed. courses on retirement planning. Not all classes/instructors are created equal, but many are taught by CFPs or other financial professionals (like the guy we took a 1 night class on SS from) and can be very worthwhile and inexpensive (compared to hiring one).

Tyro

 

[bUU]

We engaged a FP this year to sanity check our status and to help teach me a bit more about tax strategy (because I'm simply not getting a clear understanding of that topic from reading stuff online).

 

[enjoyinglife102]

I'm firmly in the camp that if you spend some time learning and keep it simple, one is far better off to be self directed. I'd also like to add that if someone makes a living providing financial advice/products, they are ALWAYS trying to sell you something. If you think that low key "free" consultation on retirement isn't an approach to have you retain their services then you're kidding yourself. Good example - a 55 page report? That sounds daunting, complicated and a lot of stuff I may not be capable of managing, maybe I should hire these guys.

 

[jollystomper]

When I was young I mistook the "advice" I received from an insurance agent and a stockbroker as thing that would help me financially instead things that help them financially. So having a gift for math I started reading a lot more about personal finances, taking a couple of classes on it at local colleges, and doing it on my own. Perhaps I am a little stubborn in that I would rather make a mistake on my own that put my trust in someone else and see them make a mistake. Also, I have been more of a "slow and steady wins the race" type of planner, and I seemed to encounter planners who wanted me to "swing for the fences" with my assets.

My Megacorp for about the last 15 years has given its employees free access to financial planners and planning tools, and I have used them more as a "sanity" check on my actions. I was pleasantly surprised the first time I went that, based on how they evaluated my goals, investment characteristics, and tolerance for risk, my investment mix was within a couple of percentage points of their recommendation.

 

[Grigori]

Vanguard FP did a plan for us this year, but it was not very detailed, and just helped us feel comfortable that we weren't making any gross errors.

We find that we need to do most of the FP ourselves. Many aspects of financial planning seem to come down to personal choices and values. We're the only ones who can decide, after learning as much as we can, what asset allocation to choose, or what withdrawal rate to use, among other things.

 

[Rustward]

<snip> I mistook the "advice" I received from an insurance agent and a stockbroker <snip>

The first misstep was going to an insurance agent and a stock broker for advice.

 

[NoOneGetsIt]

We engaged a FP this year to sanity check our status and to help teach me a bit more about tax strategy (because I'm simply not getting a clear understanding of that topic from reading stuff online).

I think we're going to do the sanity check/plan help in a fee only basis to feel more comfortable. I have had those big 'fears' of the jump and I think this will help me take the plunge.