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Old 03-18-2021, 09:59 AM   #101
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Not minimizing what the FA does for Emily, as I stated, I used to provide those services myself but my point is Emily can have the same level of hand holding with a CFP and an index fund portfolio for a total cost of around 40bps using VPAS or SIP Premium. The only difference is that Schwab or Vanguard would meet virtually rather than in person with those lower cost services. To me, it's not a huge sacrifice given that Emily is probably paying the FA 150% more than those services.
What Emily needs is financial advice, not just investment advice. The roles of Financial Advisor and Investment Advisor routinely get conflated here. Emily's FA is helping her manage her life, coaching on getting rid of the LA house, coaching on transitioning to a future life without Goodwill, tradeoffs in selling mom's home and moving, etc. FA will also coach on taking SS, estate planning, etc. With respect, the reps at firms like you listed are almost exclusively IAs, as are the Vanguard and Schwab robo options.

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Emily was lucky to have the help of someone who could guide her to a financial advisor that was vetted by someone who knows what they are doing. What would have happened if you were not there to guide her and she ended up with some random person at Edward Jones?
Actually that's a subject DW and I talk about frequently: "What do normal people do?" We have been fantastically lucky in life and as a result have above average areas of expertise and personal networks that allow us to help the Emilys once in a while.

Re Eddie Jones, I had been invited to teach an Adult-Ed investing class by the local school district but turned it down. About a year later we discovered that Eddy had gotten his clutches into a dear but financially naďve friend. Friend said he though he owned "four or maybe five" annuities. At that point I decided to do the class, hoping to help at least a few people avoid bad situations. I don't know if I have succeeded or not, but it has been a lot of fun.
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Old 03-18-2021, 01:00 PM   #102
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Me, for one. We have a Vanguard CFP and we are fully invested in index funds, so I expect and embrace that we will earn the market rates on each of them. Trying to beat the market is not even a consideration of why we have a CFP. We get a highly comprehensive financial plan to achieve our goals and regular check ins to keep it on track; peace of mind that my non-financial DW knows exactly whom to call if I croak before her; a neutral, third party expert to help DW and me stay comfortably on the same page and in sync despite our different spending styles; investment mistake prevention insurance since any counter-productive emotion-based trading decisions are no longer possible with AUM. And more guardrails, planning tools and “warranty services.” I kind of like that metaphor.

Oh, and I retired last year with great confidence rather than having to work several more years had I followed the 4% Rule common to DIYers. I don’t even know how to calculate the value of getting my life back. So, “THANK YOU, Vanguard advisor. The 30 basis points we pay you for AUM is the best money we spend, period.”
IMO this is the most important reason to have a FA for those of us who are mostly DIYers. I run the big decisions past him before I make a move. So far he's not had to stop me from doing anything really stupid.
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Old 03-18-2021, 04:47 PM   #103
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Ok. We're at the anecdote level of thread development. Most responses prove nothing, but steam gets let off.

The FINRA site does have data points, but a clean sheet there does not guarantee anything.
No kidding...one broker I used had a clean FINRA sheet before he sold me a bunch of unsuitable investments.

I'd love to file a FINRA complaint but he abandoned his broker's license just a few years later.
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Old 08-27-2021, 10:24 AM   #104
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Find a fee-only advisor on the reputable Garrett Financial Network and pay one time for advice about your insurance question. https://www.garrettplanningnetwork.com/

Do not pay 1.1%. Personally, we pay Vanguard Personal Advisor Services .30% and find it well worth the cost as a form of “mistake prevention insurance” and many other benefits. However, I don’t think they advise about insurance issues, only investments. Good luck.
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Old 08-27-2021, 11:50 AM   #105
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Personally, we pay Vanguard Personal Advisor Services .30% and find it well worth the cost as a form of “mistake prevention insurance” .
I've been with Schwab for many years and most of our FIRE assets are consolidated there. I'm surprised at what they'll do for me in terms of advise or analysis for free. When I had to make an "annuity or lump sum" decision regarding my MegaCorp pension, my rep got a Schwab specialist on that subject involved who met with me via teleconference four times and Fed-X'd me a very well done customized study on my situation (integrated with my overall financial plan they had recently done) but did leave the final decision to me. All gratis.

If I have specific questions regarding "nut and bolt" investing issues, I call the so-called "Private Client" number, seldom have to listen to elevator music, and have generally been impressed with the knowledge of the person on the other end giving the explanations.

My current rep at the local brick and mortar office isn't actually very investment savvy, IMHO. But he is a wizard at getting answers and connecting me with specialists quickly.

This isn't to say that I haven't had some issues with Schwab over the 30+ years I've been with them. But everything has always been solved without too much of a headache and I've been pleased with the amount of FA service provided for free. Therefore I've never paid for financial advise, although my portfolio is not complicated.

I did add a chunk of preferred stocks the past couple of years thanks to this forum and have been pleased so far. And it was interesting to learn a new wrinkle (free)!
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Old 09-03-2021, 06:07 PM   #106
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We are paying an advisor 1.1% now. He gives advice on investments, retirement plan, estate planning, insurance etc. I am not overly impressed and will likely take it back over soon. My issue is that my wife and I have no interest in managing it ourselves. I would rather be riding my bike, making furniture, and adventuring with my wife. But the fees are adding up so I may have to buck up and take it on.
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Old 09-03-2021, 06:22 PM   #107
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We are paying an advisor 1.1% now. He gives advice on investments, retirement plan, estate planning, insurance etc. I am not overly impressed and will likely take it back over soon. My issue is that my wife and I have no interest in managing it ourselves. I would rather be riding my bike, making furniture, and adventuring with my wife. But the fees are adding up so I may have to buck up and take it on.
It really isn't rocket science. A few hours of reading and you should be good to go:

https://www.bogleheads.org/wiki/Bogl...g_start-up_kit

If you have specific questions, you can always ask here.
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Old 09-03-2021, 06:23 PM   #108
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We are paying an advisor 1.1% now. He gives advice on investments, retirement plan, estate planning, insurance etc. I am not overly impressed and will likely take it back over soon. My issue is that my wife and I have no interest in managing it ourselves. I would rather be riding my bike, making furniture, and adventuring with my wife. But the fees are adding up so I may have to buck up and take it on.
I think people have the misconception that managing their finances themselves is this big task that is time consuming. I put my money in index funds many years ago and have essentially never touched my portfolio ever since. At most I take a look once a year to see if I’m still within my desired asset allocation. If not, it takes me five minutes to rebalance it. Otherwise I never spend any time managing or even thinking about my investments. Financial advisors seem to find a way to make it appear much more complicated to help sell their services. But it really doesn’t need to be.
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Old 09-03-2021, 06:40 PM   #109
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Yeah, I really just need to take it back, put it in my schwab account, and put it in the same funds it is in now.
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Old 09-03-2021, 06:43 PM   #110
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Find a fee-only advisor on the reputable Garrett Financial Network and pay one time for advice about your insurance question. https://www.garrettplanningnetwork.com/

Do not pay 1.1%. Personally, we pay Vanguard Personal Advisor Services .30% and find it well worth the cost as a form of “mistake prevention insurance” and many other benefits. However, I don’t think they advise about insurance issues, only investments. Good luck.
Markola, so the cost of a FA at .30% means of what? Thanks, just not familiar with FA or how they charge.
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Old 09-03-2021, 07:05 PM   #111
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We are paying an advisor 1.1% now. He gives advice on investments, retirement plan, estate planning, insurance etc. I am not overly impressed and will likely take it back over soon. My issue is that my wife and I have no interest in managing it ourselves. I would rather be riding my bike, making furniture, and adventuring with my wife. But the fees are adding up so I may have to buck up and take it on.
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I think people have the misconception that managing their finances themselves is this big task that is time consuming. I put my money in index funds many years ago and have essentially never touched my portfolio ever since. At most I take a look once a year to see if I’m still within my desired asset allocation. If not, it takes me five minutes to rebalance it. Otherwise I never spend any time managing or even thinking about my investments. Financial advisors seem to find a way to make it appear much more complicated to help sell their services. But it really doesn’t need to be.
Exactly. A relatively small investment of time is all that is needed, make the determinations of how to allocate your assets, get an estate plan, and then enjoy your bike riding. Personal finance is not an all-consuming task.
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Old 09-03-2021, 11:05 PM   #112
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We are paying an advisor 1.1% now...........
Do you realize that is over $10,000 a year on a million dollars? Who else do you pay that kind of money for a few hours of work a year?
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Old 09-04-2021, 03:34 AM   #113
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Markola, so the cost of a FA at .30% means of what? Thanks, just not familiar with FA or how they charge.
.30% of investment assets/portfolio.
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Old 09-04-2021, 04:25 AM   #114
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Markola, so the cost of a FA at .30% means of what? Thanks, just not familiar with FA or how they charge.
And you pay that fee on the assets managed every year.
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Old 09-04-2021, 06:11 AM   #115
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In an UP year most will overlook the AUM fee. It sure gets attention in a DOWN year.

My FIL would say, "Why do I pay this guy to lose money?"
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Old 09-04-2021, 06:15 AM   #116
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In an UP year most will overlook the AUM fee. It sure gets attention in a DOWN year.

My FIL would say, "Why do I pay this guy to lose money?"
Which is yet another example of how illogical people are. Behavioral economics at work.

Over time, the AUM fee is a portfolio killer, regardless of what the market does.
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Old 09-04-2021, 04:52 PM   #117
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Markola, so the cost of a FA at .30% means of what? Thanks, just not familiar with FA or how they charge.


Well, the OP quoted a rate 1.1% in fees for an advisor’s Assets Under Management (AUM) program. I noted that we pay Vanguard less than a third of that exorbitant rate.
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Old 09-04-2021, 04:54 PM   #118
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Which is yet another example of how illogical people are. Behavioral economics at work.



Over time, the AUM fee is a portfolio killer, regardless of what the market does.


Panicking and selling in a down market is also illogical and a portfolio killer. We can’t make that mistake without firing our Vanguard advisor.
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Old 09-04-2021, 05:19 PM   #119
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Well, the OP quoted a rate 1.1% in fees for an advisor’s Assets Under Management (AUM) program. I noted that we pay Vanguard less than a third of that exorbitant rate.
Well, a good FA is much more than an investment advisor and our financial lives involve much more than the stock market. So you may not be comparing apples and apples. The person paying the 1.1% really needs to assess what they are getting for that amount.

For example, I wrote an RFP for an advisor for a nonprofit I'm involved with, to run about $5M. Bids ranged from 40bps to almost 100 and we picked the FA that offered 62 because we wanted the package he was offering. Low bid was VG, BTW, but we wanted more hand-holding and support than they offered.

That said, IMO 1.1% is on the high side unless the AUM is well under $1M. Getting into low millions seems to drive the fees down towards 60bps.

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Panicking and selling in a down market is also illogical and a portfolio killer. We can’t make that mistake without firing our Vanguard advisor.
I was talking to an FA friend one time who said: "Look, if I keep my client from panicking just once or twice in down markets I will have earned everything he's ever paid me and everything he will pay me in the future."
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Old 09-05-2021, 08:53 AM   #120
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Hiring a Financial Advisor

Exactamundo, Old Shooter. I know myself thanks to mistakes and how I am prone to fiddle with my asset allocation around the margins in the name of “optimization” when I experience, or even anticipate, stock turbulence. Accumulating our small fortune was easy: Buy stock index funds through payroll deduction. However, as retirement approached and we owned bond funds, too, I did not do well at setting and maintaining a fixed allocation. When I fiddled, I was always wrong, every single time. I learned, admitted I was human, and have figured out a fool-proof way to keep my itchy fingers off the controls: Give the controls to someone else who will leave our allocation alone and go live my life.

In addition to cheap “mistake prevention insurance”, our Vanguard advisor has removed stress for DW and me by being a neutral expert who hears our respective spending goals and either fits them in the plan or explains the limits to us both with compelling graphs and data. I am no longer judge, jury and wilderness guide for our finances, which is a massive relief to me and more fair to her. We are finally, effortlessly on the same page and I can’t even calculate what that is worth for our relationship. And if something happens to me, she knows whom to call.
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