Hired a FA

[Jerry1]

I told DW that I would be flogged for telling the forum this, but today I signed off on a FA. We will move basically everything to Raymond James (RJ). This FA is paid on a percentage of our investments under management but is not connected with RJ. They are a fiduciary and came highly recommend to me by two previous bosses of mine who are also retired and using this FA.

One of the oddest things regarding the recommendation is that these are two very frugal people. I've never known either of them to waste money. Money they both have plenty of. However, they both feel it's worth it. Their main reason for the FA and one that I have come to share, is that they don't want to have to think as much about the finances. That's not to say that I don't know what's going on now or that I won't know what's going on in the future, it just will not be something I need to concentrate on.

From another point of view, and the main reason I engaged the FA, I want help making good decisions. True, I could research and understand things like whether to take my pension or a lump sum, when to take SS, how to handle a ROTH . . ., but it's a lot of work that I just don't want to do any longer. This FA (a group, not just one person) has great tools and has already been very helpful. The members of this forum have been equally helpful and for that, I'm thankful. It was certainly easier to accumulate than to spend down and make the accumulated money last. I figured that if I'm not happy, I can always cancel the engagement, but so far, I'm happy with them.

Well, that's my update for today. Today, about 9 months into retirement (sort of - I'm on my severance package until 2/1/2019), I handed over the bulk of the work for my finances to a FA. Go easy on me.

 

[pb4uski]

....The members of this forum have been equally helpful...

+ we are very reasonably priced.

Just curious... what % of AUM are you paying? Also, will the FA have authority to trade or just to recommend trades to you?

 

[braumeister]

I told DW that I would be flogged for telling the forum this, but today I signed off on a FA.

The only people here who will give you a hard time over this are those who can't keep an open mind. In fact there are quite a few members here who use FAs for the same reason you do -- they understand the cost and don't want to put in the time to DIY.

As long as you keep your own records showing what you're paying them and what your return is, you are the one in control. Enjoy the freedom from worry that you're buying.

 

[Midpack]

You won’t be flogged here, ER.org is largely a community of DIY investors that’s all. You’ve chosen to own a Ford and post on a GM forum, both fine, many things in common, just different. If an FA is worth it to you, that’s fine. Lots of people would be better off with an FA, but not all FA’s are created equal (there may be more bad than good) - sounds like you’ve found one you have confidence in.

 

[bingybear]

How dare you let us all down

There is a time when it is a good idea to have some help. Wanting not to spend your time on investments and tax planning so you can enjoy life can be a good trade. The difficultly I have is trusting the FA. I don't think I can let go.

good luck

 

[ShokWaveRider]

My Cat-a-nine-tails has officially been taken down and dusted off from the attic! We are preparing the rough cut wooden post to tie you to, along with a crown and wrist/ankle bands of thorns to secure you to it. Removing your shirt will be optional.

 

[45th Birthday]

Well, we outsource a lot of tasks that we have neither the knowledge or the interest to spend the time doing them well. So, I understand. FA services require a higher level of knowledge, skill, and trustworthiness, but can have value nonetheless.

Like we do with all service providers, I hope you evaluate and manage this service with a critical eye, with regular review of performance vs. cost. Don't put it on autopilot and let it run.

 

[Bamaman]

I have a relative that is a FA for Raymond James. Let me just say be has nothing to do with my portfolio.

The company wants him to be a man about community, be seen at all university sporting events and be in every civic organization. RJ is always hauling their people (and families) to ultra expensive resorts for meetings. And be lives in much too expensive of a house--show dog being highly visible.

It I am going to hire a financial advisor, it is going to be a few based Certified Financial Planner who is paid for his time.and not.on commission.

Raymond James is not a low cost broker. Then are.quite large, but many serious investors' business seems to be wit h other companies wit h lower commissions.

 

[Rustward]

You won’t be flogged here, ER.org is largely a community of DIY investors that’s all. You’ve chosen to own a Ford and post on a GM forum, both fine, many things in common, just different. If an FA is worth it to you, that’s fine. Lots of people would be better off with an FA, but not all FA’s are created equal (there may be more bad than good) - sounds like you’ve found one you have confidence in.

WTF? Are you serious? Your statement is absolutely inconsistent with the general sentiment in these forums.

 

[Big_Hitter]

I think it's great you got a FA

 

[Jerry1]

+ we are very reasonably priced.

Just curious... what % of AUM are you paying? Also, will the FA have authority to trade or just to recommend trades to you?

Their sliding scale works like tax brackets. Starting at 1.2% for the first $500K and then .9% for the next bracket. I didn’t figure out the exact percentage but I think I’ll be close to 1%. Yes, that hurts, but Fido wanted .8% and I just couldn’t get comfortable with them. This company is much broader in their support. They are not tax experts, but they know how taxes work, they also seem more holistic in that they’re encouraging use to get all are other paperwork in order (will, trust, etc).

Regarding taxes, I am a CPA who worked outside of the tax area. I know enough to understand my taxes, but they are able to keep up on all other things that need to be kept up on like estimating my RMD’s and combining that with a ROTH conversation strategy. Their models are well thought out and are something I could not have created myself.

 

[ERD50]

No flogging. But I am curious - things like "take my pension or a lump sum, when to take SS, how to handle a ROTH" are specific events, could you pay by the hour for this?

I suppose you could part ways after a year, you should be able to get those questions answered and settled in a short time with their expertise. Do you see any need for on-going hand-holding?

It's also interesting that you said "The members of this forum have been equally helpful"? So why do you need them (I'm guessing there is a reason it just sounds funny how you worded it!)?

-ERD50

 

[footenote]

Agree with those saying if you're aware of and willing to pay the FA instead of DIY, do so without embarrassment.

DH is intimidated by financials. So we split the difference: part of our investments are with an adviser we trust and to whom he can relate. I DIY the rest. (He knows exactly how much the fee difference is per year, btw.)

Should I die first, he'll have help he needs to manage his investments.

Should he go before I do, I'll whip those managed assets into DIYLand faster than you can say "BOGLEHEAD."

(Wonder if there are any other "mixed marriages" here on ER?)

 

[Midpack]

WTF? Are you serious? Your statement is absolutely inconsistent with the general sentiment in these forums.

Sure there’s some flogging, easily ignored. Most of what I see is sharing a different POV regarding using an FA, or more often people wary/warning of the many bad FA’s out there - that’s not flogging IMO.

 

[pb4uski]

My Cat-a-nine-tails has officially been taken down and dusted off from the attic! We are preparing the rough cut wooden post to tie you to, along with a crown and wrist/ankle bands of thorns to secure you to it. Removing your shirt will be optional.

Since when did we start tying offenders to post rather than nailing them to posts? After the shirt is removed, do we still pluck out any hairs in small bunches like we used to do in the old days?

 

[Jerry1]

I have a relative that is a FA for Raymond James. Let me just say be has nothing to do with my portfolio.

The company wants him to be a man about community, be seen at all university sporting events and be in every civic organization. RJ is always hauling their people (and families) to ultra expensive resorts for meetings. And be lives in much too expensive of a house--show dog being highly visible.

It I am going to hire a financial advisor, it is going to be a few based Certified Financial Planner who is paid for his time.and not.on commission.

Raymond James is not a low cost broker. Then are.quite large, but many serious investors' business seems to be wit h other companies wit h lower commissions.

The FA uses RJ but is not RJ. They are a fiduciary. They will manage the portfolio through RJ, but they do not get paid by RJ (I know, but that is what they said). Statements will come directly from RJ but the FA billing is separate. Their program is to meet at least quarterly until everyone is comfortable. Then annually minimally or as needed.

 

[Jerry1]

No flogging. But I am curious - things like "take my pension or a lump sum, when to take SS, how to handle a ROTH" are specific events, could you pay by the hour for this?

I suppose you could part ways after a year, you should be able to get those questions answered and settled in a short time with their expertise. Do you see any need for on-going hand-holding?

It's also interesting that you said "The members of this forum have been equally helpful"? So why do you need them (I'm guessing there is a reason it just sounds funny how you worded it!)?

-ERD50

I did pay a one time fee for a Financial Analysis which was very helpful but they do not do hourly.

On going hand holding may not be necessary, but if they prove their value, I'd probably stick with them.

Not sure how to respond to the members of this forum comment because I'm not sure who "them" is in your comment. My point in saying that members here have been helpful was to thank everyone for their input on my financial life this past year or so. The input of the forum members has helped me understand a lot. That in turn helped me work better with the FA. For example, it is helpful to learn from this group about sequence of returns risk. Then, when the FA brought it up, it was a better conversation plus it was good to see that he brought it up, that he had some understanding of the issue as he handles my portfolio.

As for why do I need them? I need them (the forum members) for some personal interaction and broad based input and education. I need them (the FA) for my specific situation and to handle something I do not want to handle.

On a smaller scale, I'm also concerned about DW. I'm concerned (and so is she) about what would happen if I'm not here. This will give her some continuity. It's not likely to happen soon, but one never knows.

 

[The Cosmic Avenger]

Good for you! I'm still a way out from retirement, and I've been a DIYer while we've built our wealth, but now that we're FI and planning to RE, I'm starting to think there are a lot of tax implications and transfers I should do that I would probably rather not worry about if we're traveling, which I hope we'll do a lot of A.W. (After W*rk). And if an expert can eke an extra 1% out of our funds, which they probably can, they can have it in exchange for my not having to take care of the maintenance tasks/transfers.

 

[Rustward]

Sure there’s some flogging, easily ignored. Most of what I see is sharing a different POV regarding using an FA, or more often people wary/warning of the many bad FA’s out there - that’s not flogging IMO.

There are bad everything out there. It is not limited to financial services.

 

[REWahoo]

There are bad everything out there. It is not limited to financial services.

Yep, and this forum shows no mercy to any of them. We are equal opportunity floggers.

 

[travelover]

Their sliding scale works like tax brackets. Starting at 1.2% for the first $500K and then .9% for the next bracket. I didn’t figure out the exact percentage but I think I’ll be close to 1%. Yes, that hurts, but Fido wanted .8% and I just couldn’t get comfortable with them. This company is much broader in their support. They are not tax experts, but they know how taxes work, they also seem more holistic in that they’re encouraging use to get all are other paperwork in order (will, trust, etc).

Regarding taxes, I am a CPA who worked outside of the tax area. I know enough to understand my taxes, but they are able to keep up on all other things that need to be kept up on like estimating my RMD’s and combining that with a ROTH conversation strategy. Their models are well thought out and are something I could not have created myself.

That's not too bad- $10,000 a year on a million dollars. They'll probably give you a good ten hours of their time for that.

 

[Jerry1]

That's not too bad- $10,000 a year on a million dollars. They'll probably give you a good ten hours of their time for that.

Yes. It’s expensive. That did not go unnoticed by DW and I. I’m pretty sure one of my old bosses is probably worth over $5M. My guess is closer to $10M. They probably spend 15 hours on that account. So I’m getting the same services for a bargain.

 

[splitwdw]

The only people here who will give you a hard time over this are those who can't keep an open mind. In fact there are quite a few members here who use FAs for the same reason you do -- they understand the cost and don't want to put in the time to DIY.

As long as you keep your own records showing what you're paying them and what your return is, you are the one in control. Enjoy the freedom from worry that you're buying.

Agree with this post. Quite a few people have posted that they use a FA.
Jerry1, You have to be comfortable and it doesn't matter what anyone else thinks or says. I'm still in accumulation phase and still working (not afraid to use the word). I tried at one point to hire an independent FA to help me verify that I was handling my finances correctly and wasn't comfortable with the ones I tried. I wish you success with your FA and sleep well at night.

 

[Rustward]

The only people here who will give you a hard time over this are those who can't keep an open mind. In fact there are quite a few members here who use FAs for the same reason you do -- they understand the cost and don't want to put in the time to DIY.

As long as you keep your own records showing what you're paying them and what your return is, you are the one in control. Enjoy the freedom from worry that you're buying.

You may be correct, but it seems that those who "can't keep an open mind" are in the majority here. Go back through all the forums posts. I dare you.

Keep your own records -- absolutely. I reconcile EVERYTHING.

 

[Dtail]

Hey hats off to you.
RobbieB - our Blow Your Dough leader seems happy with his FA.
One concept perhaps is to ask the FA for some fund benchmark, so you can match up their performance against the benchmark including the fees.