Y.... Problem is ‘by the time you know enough to choose a good FA, you don’t need one…’
Maybe. Maybe not. Apologies in advance, this is going to be long.
While we were working, I handled our investments. I did pretty well at it, too. But when Spouse's (only child, btw) stepfather died, his mom was the poster child for financial ignorance - sixth grade education, willing to trust anyone who smiled and said hello to her a few times.
Her husband had invested their modest portfolio $200K very conservatively, and at the time bonds were paying well (over 7%). She was cash poor and house rich, BIG TIME. When we finally convinced her to sell the house and move in with us, she cleared just over $1M in profit with no cap gains due.
She also had mild- to moderate-dementia and was very healthy. No family members in this country, one trustworthy relative-by-marriage who lived clear across the US on the other coast. None of them had any experience handling a large investment portfolio, nor in planning/research for the best Memory Care facility.
I had worked in three different fields in the financial services industry, and our financial planning/estate plans were solid. But we have no children. Also, we have some moderately serious health risks, to the point where reaching our 80's will be cause for a 4th of July-like celebration.
So....could I have taken over her portfolio? Sure. Plus, my father had Parkinson's - I've taken care of someone where I had to pick them up off the floor, et. al.
Could my spouse handle it if I died/became non compos mentis? Maybe. He's learned a lot from me, but he doesn't like doing this kind of stuff. And when it comes to eldercare research, he's at a loss. He grew up in Asia, where he lived in a multi-generational family with a lot of servants.
But if something happened to us, then what?
I called up a former boss - independent CFP who has a huge rep, incredibly customer service oriented (trust me, a really good CFP can do so much more for you than tell you what funds to buy, and the more YOU know, the more useful it is to work with them); now semi-retired.
I gave him the specs on my MIL - she would need a lot of handholding, and whoever takes over from us will ALSO need handholding, in addition to referrals. He gave me three names of CFPs he thought would be good matches, all of whom he trained, and all of them independents with at least 20 yrs in the business.
FYI, really good CFPs don't advertise. When they've been in the business for a while and are good,
they don't need to do 'hard' advertising. Good CFPs will get 70-80+% of their clients by referrals. The only advertising they're featured in is what's called 'soft' advertising: industry-based articles or awards.
We interviewed them, picked one, introduced MIL to him (the founder, actually). They got along like gangbusters so we moved her assets over. Eventually we needed to move her to a seniorcare facility, where she thrived (it's an extremely nice facility, one of the top 3 in the state).
So we were fine with hiring an independent CFP firm, and fine with paying them. We eventually retired and moved our portfolio over also, because we have the same issue: if one of us dies/is disabled, the other can take over. But if both of us are disabled, our trustee/beneficiary is a wonderful relative, honest and reliable - but like MIL's relatives, she has absolutely no experience in handling a large portfolio or complex seniorcare situations.
More importantly, we know the people around her, and the level of their advice may be well-meaning, but is poor quality. We would rather have her know that there is an experienced firm that has handled seniorcare and end-of-life situations, as well as being a neutral party for asking questions or obtaining referrals.
We use our CFP firm in what's known as a 'holistic' manner. They are very tax-oriented on retiree portfolios, which is extremely helpful (to us and our tax adviser). We have discussed everything from insurance needs to Roth conversions. They were the ones who pointed out setting up a DAF would be advantageous since we had recently pledged a sizable donation to a non-profit.
So....if you're just looking for investment returns, you can do that yourself. What you use a good, experienced, well-trained adviser for, is to educate you, or your heirs, about the many other aspects of financial/estate planning you may not be well-informed on.
