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Hi! New member seeks advice about choosing an advisor
Old 09-24-2012, 08:22 PM   #1
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Hi! New member seeks advice about choosing an advisor


I have been lurking for a year and just signed up. I'm self employed, 59 and would like to retire in perhaps four years, my wife is 55, a teacher and will retire at 60. We hope to have $900K in investments, she will be getting a pension of around $50K a year and my SS will be around $21K, so in sum perhaps somewhere around $90-$100K a year we hope to have in retirement. The one problem area I foresee besides health insurance is we only have around $75K in equity in our home that is worth around $400K. Our present allocation is:

40% CASH

But the MAIN question I have, and the reason I signed up today is this:

I think I finally found a hourly fee only, certified financial planner, I can trust. He does not sell anything which was my most important criteria and he is with the Garrett network. I met him when he gave a seminar at the local high school about social security strategies and he really knows his stuff. He is a numbers man, had his own insurance agency and put out his shingle as a FP about eight years ago. I am a good judge of character and he passes my smell test. But on our family crest is "Fides Nome", trust no one.

I researched him on the CFP site and there were no disciplinary actions against him and nothing negative on Google. But when I asked him for references he said he couldn't legally give me any, his attorney said they would be considered "testimonials". Since I have a trust issue how can I trust someone who doesn't have references?

We met for 90 minutes and he explained how he does his planning, mainly in indexes which I also prefer, but unlike the newsletters I have been following (Bob Brinker, Fidelity Monitor, Fidelity Insight) there is no way to judge his performance. So how does one judge an FP? Especially the kind that work only on an hourly fee?

The initial plan would be around $2700 (15 hrs x $180 each) which I found acceptable. There would be an annual asset reallocation for about $1400. I have done "OK" handling my own investments thus far, perhaps making 5% lately, we are conservative and don't trust Wall Street. But now that we are about four years from retiring I don't want to screw anything up and it does get complex with all the retirement scenarios the teacher's pension fund offers and when I should take SS, plus how to definitely get at least 4% out of the nest egg, so I need a pro now, no more DIY.

So, in sum, if you have experience with this I could use some advice. How can I vet this planner who I would like to use but I don't trust someone I don't know. Too many scandals lately...

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Old 09-24-2012, 08:27 PM   #2
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The testimonials objection smells fishy to me. You're just asking for the names and contact information of some of his clients. For all he knows they could bad-mouth him so how could it be considered a testimonial?

But that is just my layman reaction. I know there are some posters who work in the industry who might have a more informed view.
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Old 09-24-2012, 08:37 PM   #3
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I just Googled: "Are financial planners allowed to provide references?" and got a lot of hits for financial sites that recommend how to choose an advisor and they all say GET REFERENCES. So apparently FPs are allowed to provide references?

I visited the Garrett Network site which is the big organization for fee only advisors and there is no way for a non-member potential client like myself to email them a question like this. Perhaps this advisor has gotten some bad advice from his attorney?

I like the guy but if I can't talk to satisfied references I don't see how I can go ahead with his service. Too bad, this is just the kind of person I was looking for.
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Old 09-24-2012, 09:28 PM   #4
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Maybe everyone he works with is disappointed in what they got for their money. I know I have been with every person I paid for advice. You might try making appts with some of the big brokerage houses like Fidelity, Schwab and Vanguard. They will usually give you a plan for free. Every now and then I've stumbled on a talented person (had one really great Fidelity adviser but he got promoted) and you get some good ideas.

Edit: I should mention you are right to be suspicious and not trusting. I would love to hand over the reins and I've looked and looked for someone trust worthy. But after having evaluated various investment professionals the best thing you can do is not use them. Stick with those that have alot of oversight from big brokerage houses. Almost all the small outfits have proposed the most preposterous ill advised things that I would under no circumstances put money into (non-publicly traded things, ponzi schemes, convoluted insurance plans designed to bilk your money away, inappropriate investments, one scheme even showed I'd lose money for the first seven years etc.)
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Old 09-25-2012, 03:30 AM   #5
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We had a very in depth analysis by Fidelity which we are pleased with. However, it really doesn't do a lot of "what if" scenarios and when you're advised by people who really believe in the stock market, advisors who are so young their financial future always appears rosy, well...I want a silver haired skeptic.

In fact, I asked for someone senior at our local Fidelity office and it seems the oldest advisor is in their mid-thirties. As to brokerage house such as a Schwab, Wells Fargo, etc., I just can't trust anyone making a commission, period. Over three decades the financial services sector has been one of my client bases, I being a lowly graphics vendor. I saw first hand the incentive vacations and bonuses pushing "products". That is why I am looking for a hourly only advisor. If I can make several percentage points over inflation I will be happy.

I have used many calculators including the FIRE calc here, all with differing results. That's why I need a pro. Especially one who understands our state's teacher retirement system and SS, since my wife will not be allowed to collect my SS and I would collect little of her pension. So survivorship issues are in play also here.

I liked this advisor, he's a nice guy, but if people on this forum say they are able to get references from their FP then I can't go with this guy.

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