Financial Advisor Or ???

[RoadRunner7]

Hi Everyone,

Brand new here and have lots of questions, but first question #1.

We learned we are getting an inheritance. We feel very blessed.
We talked to the Lawyer in charge of the estate and he told me to get a Financial Advisor. He said no rush as it will take about a year to get everything settled.

The amount will be considerable. Not sure of the exact amount as there will be estate expenses, taxes etc., but then add in my 401K and IRA we will be in a position to retire sooner than later.

I’m trying to decide if I should use a local Financial Advisor or use say Vanguard as my main investment vehicle and use a Vanguard Advisor to help with investments. I do like the Index fund, Bond fund 60/40 or 50/50 split as a good basis near and at retirement. I don’t want to get overly complicated with my investment portfolio.

When we receive the inheritance, I will be 62 and my wife will be 60 so we are right around the corner to retirement. But I will save that conversation for another Topic after everything has settled down a bit with our emotions and thought processes. (I like taking things one step at a time)

Any advice would be greatly appreciated.
Thanks!

 

[REWahoo]

... or use say Vanguard as my main investment vehicle and use a Vanguard Advisor to help with investments.

^ This.

Selecting a financial advisor is a "luck of the draw" exercise unless you educate yourself on how to differentiate a good one from a bad. In educating yourself you will learn enough about investing (it isn't rocket science) to DIY with the help of Vanguard, saving yourself major annual investment expense costs.

 

[travelover]

Whatever you do, don't get a financial advisor that gets paid as a percentage of your funds under management. Just stick it in a lazy portfolio made of low cost index funds at Vanguard or Fidelity. We can help or go to Bogleheads forum for a second opinion.

 

[exnavynuke]

If you have access to a free FA then feel free to use them, but a 3-fund portfolio (Boglehead or similar) is simple and just about anyone can figure out for themselves how to set it up.

 

[Freedom56]

I would avoid using a FA. If you insist on having one, do a background check as a minimum through FINRA.

 

[joeea]

I’m trying to decide if I should use a local Financial Advisor or use say Vanguard as my main investment vehicle and use a Vanguard Advisor to help with investments. I do like the Index fund, Bond fund 60/40 or 50/50 split as a good basis near and at retirement. I don’t want to get overly complicated with my investment portfolio.

DIY if you are (or can quickly become) knowledgeable enough, confident enough, and have time enough to do so. The "enough" part depends on your abilities, and also on the size of the resulting portfolio. Make sure to check in with your partner to be sure they are comfortable with a DIY decision, too.

Otherwise, get professional help.

That help doesn't have to be a local advisor - other options exist like robo or remote help. And the advice can be a one-time event for a small fee, or an ongoing thing for a recurring fee.

To me, this choice is the same for all professional services. For example, I can DIY lots of home repairs, but am happy to pay for most auto repairs. I DIY my own exercise, but I understand that many choose to pay for a gym membership. I do my own taxes, but many pay for tax prep. I can run around for the occasional legal forms, but I pay an attorney for anything substantial at all. I don't have the time or expertise, so I pay a real estate agent when buying/selling property.

I do some of my personal finance, but I'm happy to pay for a professional financial advisor. If I decide I no longer need the help, I'll go it on my own.

 

[OldShooter]

Be careful here. There is no standard definition of "financial advisor."

What people rail about around here are what I would call "investment advisors." This is a very limited form of advising. These people claim that their expertise will make you more money than you can make on your own. That may be true if you are a financial novice, but getting yourself educated is a lot cheaper than paying an asset-based fee (the usual arrangement).

There are also "financial advisors" who do much more than investments --- really they are financial coaches who understand all the rules and benefits of various financial strategies and can help you make good decisions. They will typically work to get you hooked up with a good estate planning or elder law specialist attorney. They will coach you on things like insurance decisions, health care powers, durable powers of attorney, etc. See this page for more info: https://www.napfa.org/financial-planning There are NAPFA members who charge by the hour for services, so you can avoid someone getting paid based on assets that he/she had nothing to do with earning. I would start shopping for this type of advisor first. Assuming you interview a few and find a good one, that will help you with the questions you are asking about running the money and help you zero in on what kind and how extensive your future needs for advice will be.

The good news is that you have time. I would start by asking the attorney for names he might recommend.

 

[nwsteve]

As a point of reference, two so-called "financial advisors" this Forum has regularly advised AGAINST for a variety of reasons are Edward Jones and Ameriprise. Both share the "death protocol" of charging fees based a percentage of your portfolio, also know as AUM(assets under management). No matter who recommends either of them, the general recommendation is to RUN!

 

[gerntz]

Hi Everyone,

Brand new here and have lots of questions, but first question #1.

We learned we are getting an inheritance. We feel very blessed.
We talked to the Lawyer in charge of the estate and he told me to get a Financial Advisor. He said no rush as it will take about a year to get everything settled.

The amount will be considerable. Not sure of the exact amount as there will be estate expenses, taxes etc., but then add in my 401K and IRA we will be in a position to retire sooner than later.

I’m trying to decide if I should use a local Financial Advisor or use say Vanguard as my main investment vehicle and use a Vanguard Advisor to help with investments. I do like the Index fund, Bond fund 60/40 or 50/50 split as a good basis near and at retirement. I don’t want to get overly complicated with my investment portfolio.

When we receive the inheritance, I will be 62 and my wife will be 60 so we are right around the corner to retirement. But I will save that conversation for another Topic after everything has settled down a bit with our emotions and thought processes. (I like taking things one step at a time)

Any advice would be greatly appreciated.
Thanks!

Based on my history, most folks who speak up on here don't think you should an FA as DIY is easy enough. Sorta bogleheadish. So imo you've come to the wrong place to get balanced opinions on doing such. But if you're not confident enough, or have the time to educate yourself on finances, or if you just want a second viewpoint as I do, having an advisor is fine to me.

Agree with those saying you shouldn't use a % of assets advisor. Way too expensive over time (I wouldn't come one if that was the only choice.). I wouldn't worry if the advisor is local or distant. You can talk on phone, & for a few hundred bucks, go visit one. Mine is 1000+ miles away & I've met the firm's leader once in 13 years. Several times a year our daily assets value changes as much as the total cost in 13 years.

Vanguard may be fine. No experience. There are a number of fixed fee advisors around the country who have large & growing client bases that are in the several $K/yr range in cost. I'd look those up. They won't likely put you in many individual stocks but more likely most funds & ETFs with a bond ladder.

 

[Travelwanted]

Hi Everyone,

Brand new here and have lots of questions, but first question #1.

We learned we are getting an inheritance. We feel very blessed.
We talked to the Lawyer in charge of the estate and he told me to get a Financial Advisor. He said no rush as it will take about a year to get everything settled.

The amount will be considerable. Not sure of the exact amount as there will be estate expenses, taxes etc., but then add in my 401K and IRA we will be in a position to retire sooner than later.

I’m trying to decide if I should use a local Financial Advisor or use say Vanguard as my main investment vehicle and use a Vanguard Advisor to help with investments. I do like the Index fund, Bond fund 60/40 or 50/50 split as a good basis near and at retirement. I don’t want to get overly complicated with my investment portfolio.

When we receive the inheritance, I will be 62 and my wife will be 60 so we are right around the corner to retirement. But I will save that conversation for another Topic after everything has settled down a bit with our emotions and thought processes. (I like taking things one step at a time)

Any advice would be greatly appreciated.
Thanks!

I strongly suggest you read Bogleheads Guide to Investments.

Also, check out bogleheads.org and read the section on Receiving a Windfall in the wiki section.

I cannot fathom paying an FA at this point. I have had several and always led to disappointment. What sounds so complicated can be very simple. If you are making it complicated you are doing it wrong.

 

[MBAustin]

Welcome, RoadRunner7. You've received some good advice. Many folks here are DIY with investments, but you probably will need some guidance along the way. For example, if there are IRAs involved in the inheritance, the rules for taking RMDs are different from your own IRAs. If you are comfortable doing some research and education on your own, then using a fee-only planner as suggested above to help get everything set up correctly could be a good solution, as well as Vanguard. I suggest you make a list of your questions and concerns along with basic info about the inheritance and call VG and a couple of fee-only planners to see what they say about getting your questions answered and things set up properly. You'll find lots of threads here as well as places like Bogleheads that can help you get educated, so take advantage of the time you have to get yourself prepared.

From what I've heard, an unexpected significant inheritance can be very stressful and you can be vulnerable to poor advice and/or snap decisions that you'll regret later, so good for you for taking it slow.

 

[DrRoy]

i’m trying to decide if i should use say vanguard as my main investment vehicle and use a vanguard advisor to help with investments.

^ this.

Selecting a financial advisor is a "luck of the draw" exercise unless you educate yourself on how to differentiate a good one from a bad. In educating yourself you will learn enough about investing (it isn't rocket science) to diy with the help of vanguard, saving yourself major annual investment expense costs.

+2

whatever you do, don't get a financial advisor that gets paid as a percentage of your funds under management. Just stick it in a lazy portfolio made of low cost index funds at vanguard or fidelity. We can help or go to bogleheads forum for a second opinion.

+1

 

[Walt34]

Whatever you do, don't get a financial advisor that gets paid as a percentage of your funds under management. Just stick it in a lazy portfolio made of low cost index funds at Vanguard or Fidelity. We can help or go to Bogleheads forum for a second opinion.

What he said.

If you really do want to get a financial advisor do the background check as suggested and get one who will work for a one-time fee. The ones who will only work for a percentage of your money (Assets Under Management, or "AUM") really specialize in transferring as much money as they can from your wallet to theirs.

Also google "couch potato portfolio". It really isn't that hard.

 

[wolf]

Agree with most responses. RoadRunner 7, the fact that you are asking the question is a red flag. You are better off being a DIY. (like most of us). "Financial Advisers", by nature of the business, are sales people. And you do not have the skills to differentiate what is good advice and what is not.

My suggestion, put your inheritance in the "bank". Do nothing. Take the time to read and learn about investing. May take a year or longer. Find successful friend(s), and have
many dinners, discussing pros and cons of success full investing.

TAKE YOUR TIME. Do not feel pressured you have to decide right now.

Do not be like many successful sports figures who make millions, then are bankrupt 5 years after retirement.

 

[Bir48die]

Ok. There are financial advisors and there are portfolio managers. I had FA for a short period of time and jettisoned them. On the other hand I have two different portfolio managers and also have some DIY.

FA are just another layer to me. We can argue till the cows come home whether you do your own investing or not. You can do a fee based analysis if you want. I did that in conjunction with my own research of i felt comfortable enough to retire.

Many don't feel comfortable with the pressure or responsibility of managing their own investments. You'll have to make that call but know your fee structures

 

[VanWinkle]

Agree with most responses. RoadRunner 7, the fact that you are asking the question is a red flag. You are better off being a DIY. (like most of us). "Financial Advisers", by nature of the business, are sales people. And you do not have the skills to differentiate what is good advice and what is not.

My suggestion, put your inheritance in the "bank". Do nothing. Take the time to read and learn about investing. May take a year or longer. Find successful friend(s), and have
many dinners, discussing pros and cons of success full investing.

TAKE YOUR TIME. Do not feel pressured you have to decide right now.

Do not be like many successful sports figures who make millions, then are bankrupt 5 years after retirement.

+1 to this post and make sure not to broadcast your inheritance to relatives or friends that don't already know. The more people that know, the more your problems can compound.

Take your Time is the best advice- learn before you leap.

 

[target2019]

I would set criteria, and visit three major investment companies. For us, that would include Schwab, Vanguard, and Fidelity. Ask questions, review answers, repeat.
Reading a few books on this subject between now and then will help a great deal.

 

[growing_older]

Most lawyers handling estates will recommend as a financial adviser "a guy they know" who they have done business with regularly. RUN AWAY, do not walk away, these sharks are after a percentage of your money, often a percentage EVERY YEAR. You can easily do just as well or better with a three fund portfolio, a target date fund, or a post on Bogleheads.org asking a question.

 

[CaliKid]

Most lawyers handling estates will recommend as a financial adviser "a guy they know" who they have done business with regularly. RUN AWAY, do not walk away, these sharks are after a percentage of your money, often a percentage EVERY YEAR. You can easily do just as well or better with a three fund portfolio, a target date fund, or a post on Bogleheads.org asking a question.

Do you know what "most lawyers handling estate" do? I know a ton such lawyers and every one seeks to send clients to reputable financial advisors. It's silly to make blanket statements about something that simply isn't true and I have a very large data sample. Sure many financial advisors charge AUM but most attorneys I know seek to refer their clients to qualified (CFP generally), PROFESSIONALS, who give their clients actual advice and service. There are a lot of great financial advisors who actually help their clients. Plus, a lot of people like hand holding that comes from hiring someone. Not everybody in the world is a do-it-yourselfer.

 

[RunningBum]

If it's a large enough amount, Vanguard might do a plan for you for free. If not, they charge 0.3% and you could probably just do that for a year and then stick with the plan yourself.

Personally, I'd go with the 3 VG index funds (Total stocks, Total Intl, Total Bonds), after determining your asset allocation. But if you'd sleep better with financial advice, use their advisor.

Schwab and Fidelity probably could offer the same.

 

[Brat]

IMHO there are two types of financial advisors: investment advisors and financial planning advisors. The first can easily be done following the approaches recommended above. Financial planning is a different kettle of fish and is tied closely to estate planning. My DD and her husband have used a financial planner notwithstanding the fact that they are both CPAs and she is a CFO. A financial planner charges by the hour, has a fiduciary duty and should have lots of certifications on the CV.

We do not know what financial instruments or capital assets are in the inheritance. Unravelling them may be complicated.

 

[kevdude]

We do not know what financial instruments or capital assets are in the inheritance. Unravelling them may be complicated.

+1

I'm surprised most people just answer DIY without any knowledge of what's in the inheritance.

Based on those initial responses, you will realize that most people here will recommend doing it yourself. Along those lines, there is great advice here and on Bogleheads, and not only on whether to DIY or go with an advisor. And since you ultimately (i.e. after you know all the details) don't want to get overly complicated with your overall portfolio, the DIY route may be a the best option if you're comfortable with that. If you stick around, I think you will find that there is a vast amount of knowledge among the members here regarding any question you may have on retirement, investing, or life in general.

Since you don't know what all it encompasses at this time, you have plenty of time to read up on DIY or researching potential advisors. It sounds like you're already familiar with Vanguard and are probably aware of their advisory services and costs. I'm not familiar that with the Schwab or Fidelity platforms, but assume they have similar services for similar costs.

 

[Aerides]

You have a year so you for sure don't have to rush any decision. You have plenty of time to invest (pun intended) in educating yourself for a few months, both on how to DIY, as well as local FA options, and then deciding from a position of much more information and confidence.

 

[savory]

Ok. There are financial advisors and there are portfolio managers. I had FA for a short period of time and jettisoned them. On the other hand I have two different portfolio managers and also have some DIY.

FA are just another layer to me. We can argue till the cows come home whether you do your own investing or not. You can do a fee based analysis if you want. I did that in conjunction with my own research of i felt comfortable enough to retire.

Many don't feel comfortable with the pressure or responsibility of managing their own investments. You'll have to make that call but know your fee structures

I have a portfolio manager, manage some myself, and use a robo adviser. I measure performance, after commissions on a regular basis. It has worked for me.

I would not pay an FA to purchase mutual funds. My Robo Adviser purchases mutual funds but I got in during a promotion and my FA fee is nearly zero. Otherwise, I would not have gone down that route. Like everyone, I pay fees for the funds in my accounts.

This is a great site for advice. Use the advice but recognize the majority will be for self management. Take your time, review the suggestions, and do what is best for your investments and other life factors. It is the other life factors that encourages my use of portfolio managers.

 

[LOL!]

Because of your ages, you have already been around the block and must have some retirement assets already somewhere. Maybe you already in your lives used an advisor or salesrep or two? What is your experience with managing your investments and retirement assets up to the present time? I think the answer(s) to that will help readers post better responses.