fixed fee investment advisor

[FinanceDude]

I think you are missing the point that slauki is trying to make, but that's ok.

Advice is sometimes about when to do nothing, or to do something. It is not a function of performance, which I have discussed at length but very few understand.

Let's just say the folks on this forum are lightyears ahead of most folks I run into................

Let me ask this. Is is better for a person to do NOTHING, or to work with an advisor who gets them to start investing, and get on the path to FIRE Just curious................

[73ss454]

Well it would be a lot cheaper for them to do nothing.

[unclemick]

Ya know one of the bar and grill's I've been known to 'do' lunch at has the oft quoted: 'You can get more done with a kind word and gun than just a kind word'. - Al Capone.

A mentor/financial advisor circa 1966 (in contrast to my Dean Witter broker) with 'the gun of knowledge' making me an offer I couldn't refuse - would have saved me the price of an fairly expensive financial education.

Instead - had to wait until 1977 - 500 Index fund/401k/DCA and get there by accident/ or at least not noticing success until it practically bit me in the butt.

I'm getting that grumpy/curmudgeon feeling again.

heh heh heh - when I hit 10mil - maybe I'll get an advisor - maybe

[cute fuzzy bunny]

So basically you financial planner guys are just a really expensive version of Dear Abby?

[chinaco]

There is pending regulatory rules. Financial planning will soon be regulated much more closely.


On that note. Not all financial planners are the same. There a quite a number of people that just regurgitate fundamental rules that could be read out of any basic book about retirement investing.

Where I think there is more value is:

1) Understanding taxes and prepositioning for those issues. It is a bit more murky and a moving target.
2) Understanding other legal issues around estate planning and other life bumps in the road.


It is expensive... but find a good attorney that is also a CPA. I believe they can help people with much more than the basics of investing and the fundamental on balancing market risk (volatility).


Let's face it... Just like there are small number of very good baseball players, there are very few really good financial planners. Since there is no culling process like major league baseball (and the time horizon is different)... you will never know if you hooked up with a bad or mediocre planner until after the fact.


All of that said. If you are unwilling to learn yourself... a mediocre planner is better than just riding the waves and winging it.

[saluki9]

Quote:

Originally Posted by chinaco It is expensive... but find a good attorney that is also a CPA. I believe they can help people with much more than the basics of investing and the fundamental on balancing market risk (volatility).

One comment on that, as a CPA, and seeing the personal investment portfolio of dozens of CPAs, do yourself a favor and NEVER take investment advice from an accountant. I can speak from experience that accountants learn NOTHING about investing as part of their education and taught only risk avoidance. In general the ones I have seen make very pad investments.

Quote:

There is pending regulatory rules. Financial planning will soon be regulated much more closely.

More closely? Is that possible? I can't think of any other business that is regulated as tightly as ours. The regulators from the SEC, NASD, or our state securities dept can march into our offices at any time, no appt, and demand to see our trading logs, cash receipt logs, disbursements, client files, our company books, checking statements etc. In addition we are required to save every e-mail, letter, note, brochure both to and from clients or prospects. If what you're referring to is the Merrill Lynch rule, thankfully that has been put on hold. That would have allowed brokers to hold themselves out as RIAs without doings all the crap that RIA firms do.

[REWahoo]

Quote:

Originally Posted by saluki9 One comment on that, as a CPA, and seeing the personal investment portfolio of dozens of CPAs, do yourself a favor and NEVER take investment advice from an accountant. I can speak from experience that accountants learn NOTHING about investing as part of their education and taught only risk avoidance. In general the ones I have seen make very pad investments.

Very true, and a common misconception along with the belief that all CPA's are tax experts.

I know one CPA who seeks both investment and tax advice from a liberal arts graduate (AKA "dad").

[2B]

Quote:

Originally Posted by FinanceDude Let me ask this. Is is better for a person to do NOTHING, or to work with an advisor who gets them to start investing, and get on the path to FIRE Just curious................

Your question is which wrong choice would I recommend? I would always recommend that someone learn to manage their own assets. If that delays them a month, that's ok.

[FinanceDude]

Quote:

Originally Posted by 2B Your question is which wrong choice would I recommend? I would always recommend that someone learn to manage their own assets. If that delays them a month, that's ok.

I think you assume ALL folks are like you and others on this board, and that's not true...........

Heck, about a third of all working Americans who have access to a 401K don't even put money in........... :P However, the govt now thinks that by giving the employer the power to enroll those folks, that it will magically fix the problem............

[chinaco]

Quote:

Originally Posted by saluki9 One comment on that, as a CPA, and seeing the personal investment portfolio of dozens of CPAs, do yourself a favor and NEVER take investment advice from an accountant. ...

I should have said explicitly CPA specializing in taxes (it was implied in the context). I agree Accounting classes tend to only give the basics.

Quote:

Originally Posted by saluki9 More closely? Is that possible? I can't think of any other business that is regulated as tightly as ours. The regulators from the SEC, NASD....

Yup it is coming. And it should! There are many BSers out there. There are several certifications available that are bandied around and presented as if the fin adviser is an expert. Most are watered down basics. Some are experts but many are not. Of course from the perspective of the person seeking guidance, they often know very little so a few buzz words impress them.

[Rich_by_the_Bay]

Quote:

Originally Posted by FinanceDude I think you assume ALL folks are like you and others on this board, and that's not true...........

FinanceDude and Saluki are, in my opinion, right on target -- most people, even those who are smart, are wildly off the mark in their financial management skills.

We had houseguests this weekend - he's a retired subspecialist ophthalmologist, age 70. I reckon he and his DW are worth $4-5mm. He smugly commented how he is now managing his own money. I gently inquired as to what funds he likes. His reply: "stock funds." Oh, which ones: "I've got utilities, precious metals, REITs." Hmmm.. is that all? "Yep, with mutual funds you don't need to buy dozens of stocks."

He also owns some intermediate bonds. Thankfully, he has a large pension.

Could use a good financial advisor.

Question for FD and Saluki: if a new client came in and showed you a plan which met the usual wisdom around here, what would your reaction/advice be in general? That is, a good and appropriate mix of fixed and stocks, well diversified globally, and indexed, a decent plan for 4% SWR more or less, no real red flags.

How do you react to that? And since you both check in here so at least have some awareness of this group, what about your colleagues who don't take the time to scan this terrain once in a while-- how do you think they would react?

PS: FinanceDude -- is Ron Sadoff still practicing in MKE?

Turns out he has the equivalent of several company's versions of

[saluki9]

Quote:

Originally Posted by Rich_in_Tampa Question for FD and Saluki: if a new client came in and showed you a plan which met the usual wisdom around here, what would your reaction/advice be in general? That is, a good and appropriate mix of fixed and stocks, well diversified globally, and indexed, a decent plan for 4% SWR more or less, no real red flags. How do you react to that? And since you both check in here so at least have some awareness of this group, what about your colleagues who don't take the time to scan this terrain once in a while-- how do you think they would react?

Rich, that isn't that uncommon an occurance, I see it all the time. I'm not in sales, but if it gets to the point that a prospects is meeting with a planner it means they see some value in the process. I do run into people who have done a good job so far of putting things together (FYI almost 100% of them are from an engineering background) and if they meet the criteria you describe we would ask them if they want a planning relationship? In many cases they do becasuse they either want the other services we provide or they want to enjoy their retirement (or focus more on work) and don't want to deal with the day to day stuff. In addition, even the good portfolios could use a little fine tuning. I would also add that even the people who come in having done things well so far are far less overconfident certain that they know all the answers as you would find with many folks on the internet. Most of our assets are indexed so there isn't the conflict coming in that you hit with many clients sworn to active management.

[2B]

Quote:

Originally Posted by FinanceDude I think you assume ALL folks are like you and others on this board, and that's not true........... Heck, about a third of all working Americans who have access to a 401K don't even put money in........... :P However, the govt now thinks that by giving the employer the power to enroll those folks, that it will magically fix the problem............

I don't assume everyone are financially schooled like most of the members of this forum. I just wish they were.

That gap will provide you with clients until you FIRE.

[Nords]

Quote:

Originally Posted by chinaco There is pending regulatory rules. Financial planning will soon be regulated much more closely.

Well I, for one, welcome our new government-regulation overlords-- and I'm holding my breath until things get better!

Harry Kasanow is a financial dominatrix advisor in Manoa who essentially acts as the "bad guy". For his fee he'll swoop in, put you on a sensible budget, take all your excess funds away from your hot little hands, and start building your retirement portfolio. If you (or your fun-lovin' family) try to touch it then he'll slap your hands away and talk you down. People pay a lot of money for that.

I asked him to work out a plan with us and our funds, and his response was basically "My way or the highway". Well, I can appreciate that he's tuned into his core customer and doesn't need to try to abuse serve everyone.

Later I spoke with an AXA rep who sent us a ton of worksheets, met with me for 45 minutes to go over them, and then Osborned himself by saying "Well, our current Monte Carlo simulator is $2500 for a financial plan but our software upgrade next January will be able to do more for the same price." Really? Well then, see ya!

OTOH my eternal gratitude goes to the advisor who took my phone call, got the outline of our financial situation, and said "Well, if you have a military pension and keep your withdrawals below 3% for the rest of your life then you'll have no problems. But come see me if you want help with that..."

[FinanceDude]

Quote:

Originally Posted by Rich_in_Tampa Question for FD and Saluki: if a new client came in and showed you a plan which met the usual wisdom around here, what would your reaction/advice be in general? That is, a good and appropriate mix of fixed and stocks, well diversified globally, and indexed, a decent plan for 4% SWR more or less, no real red flags.

I tell them so, right up front. Generally, there's a reason they're in front of me, and it may have LITTLE to do with what mutual fund portfolio they've been managing themselves for many years. Mostly, they're concerned about what to do now, and wonder if they need advice on an ongoing basis. I do a lot of "gratis" work, but in the end I can't complain. I think something that most folks on here don't realize is that there are a fair number of folks who have done well investing WITHOUT the help of advisors, but have reached a point where the $$$ are too big for their comfort.

I would say education is about 75% of what I do with my clients. I am direct and unafraid in my opinion..........

Quote:

How do you react to that? And since you both check in here so at least have some awareness of this group, what about your colleagues who don't take the time to scan this terrain once in a while-- how do you think they would react? PS: FinanceDude -- is Ron Sadoff still practicing in MKE?

I am pretty sure I am one of the ONLY FA's in the USA on this forum....but I use it to learn about LBYM more than investing strategies........

As far as I know, Ron is still practicing in MKE.............

Saluki works the portfolio mgmt side, so I may be the only true fee-based advisor that is ballsy enough to be on here..............

What we know for sure is I'm not prospecting for clients on here............

[REWahoo]

Quote:

Originally Posted by FinanceDude What we know for sure is I'm not prospecting for clients on here............

I wouldn't go quite that far, but I would agree you aren't doing so very effectively.
Kinda like trying to set up an ice mfg. operation in Hell...

[unclemick]

Quote:

Originally Posted by REWahoo! I wouldn't go quite that far, but I would agree you aren't doing so very effectively. Kinda like trying to set up an ice mfg. operation in Hell...

When I get to 10mil - we'll talk.

Please don't hold your breath.

heh heh heh - Target Retirement is my latest hearthrob. Pssst - Wellesley is now my ex.

[FinanceDude]

Quote:

Originally Posted by REWahoo! I wouldn't go quite that far, but I would agree you aren't doing so very effectively. Kinda like trying to set up an ice mfg. operation in Hell...

[FinanceDude]

Quote:

Originally Posted by unclemick2 When I get to 10mil - we'll talk. Please don't hold your breath. heh heh heh - Target Reirement is my latest hearthrob. Pssst - Wellesley is now my ex.

Let me guess, you have a bumper sticker that says:"We're Out Spending Our Kid's Retirement"..............

[unclemick]

Quote:

Originally Posted by FinanceDude Let me guess, you have a bumper sticker that says:"We're Out Spending Our Kid's Retirement"..............

Nope - but sure saw a bunch of them on RV's usually - during our 'pull the camper' period in the 1980's.

heh heh heh 8)