CFP for $100 / year - good idea?

[azdre]

Hi! We are 42 and about to RE. I have an opportunity before I leave my job to lock in unlimited access to a CFP (fiduciary) for about $100 per year or I can have a Financial Consultant guidance at the branch for free.

I’m pretty well-versed in financial matters, but it seems like there’s some trick or gotcha around many corners. A lot of our money is in 401ks so we’re looking at Roth ladders and such.

[REWahoo]

As long as you aren't locking in paying $100/yr forever for the CFP, why not go that route initially to see if you think you are getting value for your money? Then after a year you can decide whether or not to continue paying for the service.

[target2019]

Quote:

Originally Posted by azdre Hi! We are 42 and about to RE. I have an opportunity before I leave my job to lock in unlimited access to a CFP (fiduciary) for about $100 per year or I can have a Financial Consultant guidance at the branch for free. I’m pretty well-versed in financial matters, but it seems like there’s some trick or gotcha around many corners. A lot of our money is in 401ks so we’re looking at Roth ladders and such.

Sounds great, but my first guess is that this will be an opportunity to sell you additional financial services every time you ask a question.

What is the local branch? I would research the name of CFP and the affiliation before locking in...

[Aerides]

Assuming you can cancel after a year, I'd give it a shot. (if you can cancel at any time and get a pro rated credit for the year even better).

$100 is a good value if it's a good Fiduciary and you would benefit from someone to bounce ideas off, besides us lol. And if it means you have a dedicated person. Not from a pool, not the FC option.

[jazz4cash]

Quote:

Originally Posted by REWahoo As long as you aren't locking in paying $100/yr forever for the CFP, why not go that route initially to see if you think you are getting value for your money? Then after a year you can decide whether or not to continue paying for the service.

This ^^^^ is what I would do and I would have very low expectations but it should be easy to get your money's worth. OP might want to share the name of the CFP service in case anyone has first hand experience with them.

[azdre]

Quote:

Originally Posted by jazz4cash This ^^^^ is what I would do and I would have very low expectations but it should be easy to get your money's worth. OP might want to share the name of the CFP service in case anyone has first hand experience with them.

I can’t share too many details but I work for a large brokerage firm and there’s an employee discount on the service. I’d probably say it’s more for planning and advice. I wouldn’t expect a proactive personal advisor experience.

It’s a small pool of CFPs, but my firm usually gets solid folks in place. I can cancel anytime, it’s billed quarterly. It does seem like a good idea to try since it’s a one shot deal.

Thanks all!!

[chassis]

Does the offer require you to move to the fiduciary's "platform"? If yes I wouldn't do it.

If there is an out in the contract (you are not locked in for more than 1 year at a time), I would consider it, and probably do it.

[pb4uski]

As long as you can cancel at anytime and are not locked into a long-term commitment, I would go ahead and keep doing it as long as it works for you and then if it gets to the point that it isn't working for you or you don't think it is a good value then you can drop it.

[Jerry1]

A good, professional, financial plan would generally cost over $1K. As others have said, as long as you can cancel, doesn’t seem like you have anything to lose. Focus on the plan. I did pretty good on my own, but also had a free plan through my Fidelity account and I paid for one. They were both good but the paid one was better because that person understood tax and withdrawal strategies better.

[easysurfer]

A few years back I had a fee only planner that went the subscription fee based model.

That was my cue to say, was a pleasure doing business in the past but time to part ways.

[OldShooter]

A couple of thoughts:

1) People, including people around here, tend to conflate "investment advisor" with "financial advisor." A good FA does much more than just provide investment advice, which you may not need anyway. Insurance strategy, children's education funding, estate planning, etc. are all areas that a good FA will touch. In your case at 42, you have a 40-year or more time horizon. A second set of eyes looking at the whole plan can't hurt. A hundred bucka a year is nothing as a cost.

There are no qualifications preventing someone from printing "Financial Consultant" on a business card. Here is a slide from my Adult-Ed class where I explain this point:

As you probably know, a "Financial Consultant" is simply someone who has passed the Series 7 exam. Their loyalty is to their wallet and to the house. Their investment knowledge may be nil. If you don't decide to go with the CFP option, ditch the offered "Financial Consultant" like you'd scrape gum off your shoe.

2) A CFP designation is A Good Thing, but it is not nearly as good as the CFP Board would like you to believe. First, the CFP Board is a private corporation, albeit non-profit. The guy that runs it makes over a million $ a year. How does he make this money? By minting CFPs and collecting dues. Hence the moral hazard: The more CFPs he mints the more money he makes. The tougher the qualification criteria, the fewer people qualify and the less money he makes. The other Very Important Fact is that a CFP is NOT a fiduciary by reason of holding this designation from this private company. They would like you to believe otherwise and some CFPs even believe the hype, but unless the CFP is a fiduciary by being employed by a registered investment advisor or some similar means, he is NOT legally a fiduciary. So be sure to ask specifically whether your CFP relationship is a fiduciary one or not. Trust but verify.

[Sunset]

We have been getting a lot of sign up requests from: Edelman Financial Engines.

But we searched and found a Lot of negative reviews.

Seems like they bought a past employee list from someone...