How I chose My FA
- Thread starter FlaGator
- Start date
My tIRA is about 55% of total portfolio. Doing conversions was one of the FAs recommendations at our first phone conference. Due to trailing comp from my former employer, 2017 is the first year it makes sense to look at them.
Spent some money with the the tax guy iterating through scenarios to find the optimum amount for my situation in 2017. It will save some money come RMD time, but more importantly, moves my estate in the direction I prefer in the event I expire before the IRA is exhausted.
I would label myself an "opportunistic converter." Due the possibility of ACA subsidies in 2018, don't expect to do any next year, and will be evaluating this annually.
Agree on the conversion dilemma. I finally settled on "what do you want to optimize for, and can you live with the costs and risks that come with that decision?" Many factors, and I haven't found a clear long term answer for my expected scenarios. Another reason why I haven't mentally committed myself to a multi-year conversion plan.
This post isn't exactly on-point, but I am meeting Wednesday with a Fidelity advisor, since I'm about to start pulling funds from the portfolio for the first time (DW is retiring early next year) and have a series of questions about that process, including required tax payment withdrawals and if I can set up the account to no longer re-invest dividends. There is no obvious way to accomplish the latter, so I may just have to sell dividends once or twice a year, which is a pain but manageable.
I'll also look for some feedback on my portfolio, just to get a second opinion.
Maybe I'll report back after the fact; I usually find alternative views useful (which is why I hang out on the forum). In 3 years, I'll pull from only my portfolio for two years until DW reaches the age of discretion and can pull from her IRAs without penalty, so those two years until she can withdraw are my main concern. Until then, I'll continue to work about 15 hours/week online for 1/2 salary, so the next few years are not much of a concern. After DW is able to pull funds, I'll qualify for full SS in another two years, at which point the withdrawal rate will go down considerably.
I'm also considering moving a hunk of cash into PIMIX for more income, so I'm curious about his feedback on that (I'll probably sell a junk bond mutual to fund part of the 100k minimum since I don't think the dividend rate is worth the risk).
Roth conversions is another topic, but I'm skeptical that it's worth the trouble, particularly with the whiff of tax legislation in the air.
I'll also look for some feedback on my portfolio, just to get a second opinion.
Maybe I'll report back after the fact; I usually find alternative views useful (which is why I hang out on the forum). In 3 years, I'll pull from only my portfolio for two years until DW reaches the age of discretion and can pull from her IRAs without penalty, so those two years until she can withdraw are my main concern. Until then, I'll continue to work about 15 hours/week online for 1/2 salary, so the next few years are not much of a concern. After DW is able to pull funds, I'll qualify for full SS in another two years, at which point the withdrawal rate will go down considerably.
I'm also considering moving a hunk of cash into PIMIX for more income, so I'm curious about his feedback on that (I'll probably sell a junk bond mutual to fund part of the 100k minimum since I don't think the dividend rate is worth the risk).
Roth conversions is another topic, but I'm skeptical that it's worth the trouble, particularly with the whiff of tax legislation in the air.
Last edited:
Freedom56
Thinks s/he gets paid by the post
No but they will tell you if they have any actions against them like fraud, bankruptcy, lawsuits, etc... Your interview with the FA should be able to uncover people living beyond their means. I was referred to a wealth management adviser by TD Ameritrade. I did not want to go, but they asked me to talk to someone with an open mind. I agreed to it after they offered me $400 credit on future trades for my time. The person I saw was at five different firms in the past 4 years. When I asked him if he ever held a job for more than a year, I drew a blank stare ( I took that as no). I asked him what his net worth was, and he told me that he took some heavy losses recently on his investments. He then asked me what does that have to do with anything. I left the meeting at that point.
The questions you need to ask are:
Job history
Financial performance history
Net worth and how was it acquired
How much debt are they carrying?
My view is that unless a FA has a net worth in the millions acquired over time through investing (equity, fixed income, real estate, business ownership), they are worthless to me. Most FA are salesmen/women.
eleighj416
Recycles dryer sheets
We engaged a FA 3 years ago before I retired. My wife and I interviewed them together, if we, especially my wife, did not get a "good vib", we moved on. I wanted someone to "advise" her if something happened to me. We ultimately settled a fee only FA that works independently and is a fiduciary. We review the portfolio at least quarterly with him. Any changes to the portfolio are made by us; he can not get into our accounts. Fun teaching her how to do it, but she needs to know.
We also have a CPA and an Attorney that we use for tax advice etc.
We also have a CPA and an Attorney that we use for tax advice etc.I could do that, or many other things.
Boosting my return, as long as I'm getting enough to meet my goals, is not the top priority right now.
I'll refer you back to my OP instead of rehashing the life-changing events that lead to using an FA at this point.
Crewer
Recycles dryer sheets
We use an AUM-fee charging FA firm.
Why? – It makes our life much easier. DH has no interest in managing things like that and I don’t feel I have the time. We travel much of the year – mostly overseas – and aren’t fully retired since we both work for DH’s consulting firm (which also gives us the opportunity for much of the interesting travel).
I had a very long (>600 word) description of why and how we chose but you can imagine. Years of busy lives, proliferation of accounts (multiple places and instruments some with high fees), not-so-great experience taking care of probating parents' small estate, etc. all fed into the decision. We think we get good value and we definitely have more peace-of-mind now. We can afford it. It’s a personal decision just like what we spend on our home, car, and travels.
Why? – It makes our life much easier. DH has no interest in managing things like that and I don’t feel I have the time. We travel much of the year – mostly overseas – and aren’t fully retired since we both work for DH’s consulting firm (which also gives us the opportunity for much of the interesting travel).
I had a very long (>600 word) description of why and how we chose but you can imagine. Years of busy lives, proliferation of accounts (multiple places and instruments some with high fees), not-so-great experience taking care of probating parents' small estate, etc. all fed into the decision. We think we get good value and we definitely have more peace-of-mind now. We can afford it. It’s a personal decision just like what we spend on our home, car, and travels.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Yep, the Financial Advisor Quality Paradox (FAQP): If you know enough to be able to identify a good advisor vs. a bad advisor, you probably don't need one.
I knew it wouldn't be long before those opposed to FA's would start telling those of us who choose to use FA's that we are wrong. [emoji23]
The simple answer is those of us who use FA's do it because we want to and we can afford it. As Crewer said, it's a personal choice just like many other life decisions.
The simple answer is those of us who use FA's do it because we want to and we can afford it. As Crewer said, it's a personal choice just like many other life decisions.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Please note the FAQP definition above contains the term "probably". That was a deliberate inclusion to allow for individuals such as yourself, FlaGator and others who choose to employ an FA.
I am NOT saying your decision is wrong.
Last edited:
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This is perhaps the worst of many poor reasons to get married. There are likely some good reasons too, but I struggle to remember them.
When I was dating, a woman asked me if I would ever consider getting married again. No I said, and if somehow that happened, I would definitely never marry her.
I felt this was clear enough to absolve me of anything other than being incredibly impolite.
Ha
Last edited:
RunningBum
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jun 18, 2007
- Messages
- 13,236
Don't go looking for trouble. I haven't been following this thread too closely, but what I've seen is a few people who say you don't need one...not that it is wrong. Maybe I missed a post because I have a few people on ignore, but you generalized this as "those opposed". You want an FA? No skin off my back.
OP states they don't need an FA, they want one. People who wander in and read threads about the perfect way to select an FA should also know that not having one is an alternative option.
My parents continue to use Edward Jones. They pay north of $10k in fees every year. Probably more now as their portfolio grows.
They are making money and don't like the thought of "breaking up" with their FA. I get it.
I went through examples of how the fees knock down what they want to do. I used this tool to show them exactly the impact.
Compare Investment Fees
They state they are at the "end" of their investing. Maybe only 10-20 years of time left at early 70s.
They could give that $10k to church, create a scholarship at their college, cut a hole in their pocket and let it dribble out on the sidewalk to help people.
No right answer. My assumption is that if you post a long detailed post about how to select the perfect FA that it is a template for others to perhaps use. Great.
The value of these places is not only saying "great job, here is your slap on the back", but throwing out difference and alternate views.
It is very possible you will come out ahead after fees over the next X years. We won't know until X years passes. Nobody knows nothing and It's OK to be _____________.
My parents continue to use Edward Jones. They pay north of $10k in fees every year. Probably more now as their portfolio grows.
They are making money and don't like the thought of "breaking up" with their FA. I get it.
I went through examples of how the fees knock down what they want to do. I used this tool to show them exactly the impact.
Compare Investment Fees
They state they are at the "end" of their investing. Maybe only 10-20 years of time left at early 70s.
They could give that $10k to church, create a scholarship at their college, cut a hole in their pocket and let it dribble out on the sidewalk to help people.
No right answer. My assumption is that if you post a long detailed post about how to select the perfect FA that it is a template for others to perhaps use. Great.
The value of these places is not only saying "great job, here is your slap on the back", but throwing out difference and alternate views.
It is very possible you will come out ahead after fees over the next X years. We won't know until X years passes. Nobody knows nothing and It's OK to be _____________.
Rustward
Thinks s/he gets paid by the post
- Joined
- Apr 19, 2006
- Messages
- 1,684
Heaven forbid you would ever think that what they do is their own decision!
Edward Jones is one of the more expensive, but some people use them. I would not recommend Edward Jones, but it is not my money or my decision.
I guess this topic needs more coverage. It is just not discussed enough. Why don't you start a new thread and enlighten us all. Try to find something that has not been kicked around a million times already.
RobbieB
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 22, 2016
- Messages
- 8,968
I don't want to compare investment fees.
I don't go to church, I'm not religious.
I support my alma mater and my fraternity and the second harvest food bank as well as some cancer related groups.
And I really like supporting my FA because he is a nice guy and makes me lotsa dough!
I don't go to church, I'm not religious.
I support my alma mater and my fraternity and the second harvest food bank as well as some cancer related groups.
And I really like supporting my FA because he is a nice guy and makes me lotsa dough!
target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks for posting a link to the compare tool. Have a similar situation, and spouse is always remarking about the fees that in-laws have paid since inception. Another cost is to include the higher fees of the funds and/or trading.
When I go, it will be up to spouse how to handle this. I advise to DIY, but go to a particular company where we have investments, if help is required.
I had a good meeting with the Fidelity FPA Wednesday.
Much of it was over details of how to start withdrawing from my 403b, but he also made some tweaks to the Fidelity Retirement Analysis tool (I had double counted income for the next year, due to my settings on the timing of retirement and continuing to work part-time online), and he also pointed out the withdrawal table within the tool that shows the percentage of withdrawals over time until the end of the plan--since I brought up the issue of several years until full SS retirement age when I would be withdrawing considerably over 4%.
I had set the tool to very below average returns and also increased the yearly withdrawal by 20% over what we plan to take, but it still showed more than 50% of money left at age 100 and a 150% left with just below average returns.
He did not sell anything, but did make a suggestion of a short-term bond fund to look at since I mentioned the issue of high cash not earning anything in the sweep fund.
I was favorably impressed. He mostly just responded to my questions, very intelligently. So it might be worthwhile meeting once a year or so with Fidelity or Vanguard advisors if you are using them and have sufficient assets for the meetings to be free.
Much of it was over details of how to start withdrawing from my 403b, but he also made some tweaks to the Fidelity Retirement Analysis tool (I had double counted income for the next year, due to my settings on the timing of retirement and continuing to work part-time online), and he also pointed out the withdrawal table within the tool that shows the percentage of withdrawals over time until the end of the plan--since I brought up the issue of several years until full SS retirement age when I would be withdrawing considerably over 4%.
I had set the tool to very below average returns and also increased the yearly withdrawal by 20% over what we plan to take, but it still showed more than 50% of money left at age 100 and a 150% left with just below average returns.
He did not sell anything, but did make a suggestion of a short-term bond fund to look at since I mentioned the issue of high cash not earning anything in the sweep fund.
I was favorably impressed. He mostly just responded to my questions, very intelligently. So it might be worthwhile meeting once a year or so with Fidelity or Vanguard advisors if you are using them and have sufficient assets for the meetings to be free.
Last edited:
