Why Does this Forum Distrust Financial Planners?

[grumpy]

For some folks using a FP may not be a bad solution. I do my own financial planning because I have the time, the knowledge and the ability to do it as well as a professional. On the other hand, I lack the mechanical ability, the knowledge or the desire to do electrical work at the house. I hire a professional to do that work. Does he charge me alot? Yes. Do I know how to select an electrician that is both competent and honest? Probably not. But the risks of doing the work myself are just too great (fire, electrocution, etc.) so what other choice do I have? For a person without financial knowledge or interest the choice is similar.

Grumpy

 

[Brat]

Ah, but electricians and plumbers must pass a professional exam and their work is inspected by independent third parties! I have known honest and compentent plumbers and electricians. I even know an honest and compentent mechanic.

Interesting that FPs are compared to crafts workers.

 

[preben]

Brat;when it comes down to basics; diversify and adjust for risk tolerance it is actually pretty simple isn't it? Cheers!

 

[nellieb]

Has anyone used the Motley Fool advisory service for financial planning.

 

[Brat]

I am not sold on FPs for investment advise. Once in a while one can find a FP who is knowledgable on personal financial management. I want an FP to have only my interest in play, no side deals. "Free" advise is never free.

 

[treypar]

Brewer
The insurance company were taken over by a receiver on behalf of the state. I was able to eventually complete a tax free exchange to a Vanguard Annuity. It had me worried the whole time and I do not want to go through it again.

 

[Nords]

The insurance company were taken over by a receiver on behalf of the state.

If you tell Brewer the name of the insurance company, then he'll be able to use his analysts's superpowers to learn all the company's bankruptcy info that never made it to the public press. Then he can share the juicy details and the lessons learned with us.

Send him a PM if you don't want to name company names on the board!

We'll be waiting with our ears perked up.

 

[TargaDave]

We actually did OK with a full service broker before discovering this site. No churning or hot tip chasing. Names like XOM and MO in the account for ages (and some AT&T on the flip side). I suppose dart throwing would have produced the same results since 1980 without the fees. Starting to switch away now.

 

[brewer12345]

Brewer
The insurance company were taken over by a receiver on behalf of the state. I was able to eventually complete a tax free exchange to a Vanguard Annuity. It had me worried the whole time and I do not want to go through it again.

Interesting to hear. Life insurer failures are pretty rare and when they do happen policyholders usually get 100 cents on the dollar plus accrued interest. Your funds are generally backed up by the insurer's capital, the inherent conservatism of insurance regulation/accounting, and state insurance guaranty funds (no as good as FDIC). But it still is no fun to go through the process.

 

[ESRBob]

Count on a financial advisor to get you into the one-in-a-thousand insurance company that is on the brink of receivership.

 

[brewer12345]

Count on a financial advisor to get you into the one-in-a-thousand insurance company that is on the brink of receivership. 

Hey, they pay the highest commissions, they must be good! :

 

[Sundance Kid]

I didn't go to a financial planner but, I needed some professional advice and thought some type of professional person would be able to help me out. So, I went to a CPA. A really nice guy!

I took him all the history of my financial assets and breakdowns of what was what and where it was. I asked him to advise me, as to how I could do a better job with my investments,; how I could perhaps save on taxes,--- etc.

Just being curious, after I thought we were on the same page, I asked, How Much will you be charging for your services? He said, Aawww, we'll work something out!

About two weeks later, I called his ofice, to see if he had come up with a foolproof plan, to guarantee me everlasting financial security. Yeah, he said, come by and pick it up!

So, quicker than a gar can skin a minnow, I was in his office.-------- To get a copy of the information, I had given him already, printed on the back of a pre used copy of another document. His professional analysis: " Looks fine to me!"
$90.00 bucks please!!


A financial planner would have probably charged $200.00, for the same fine service. Unless I wanted them to handle my entire my entire financial portfolio, which they would gladly do, for 1.5% per year.

I walked out, marveled at their nice offices and the Hotties serving cofee to us Redneck illiterates and said "See Ya'll, Have a nice day."

I'll keep it in a sock,---before I discuss my assets with a financial planner!

 

[JPatrick]

My gar can skin faster than your gar 

 

[Chan]

12 years ago I went to see my first financial adviser with Citibank HK. Since then I have had many encounters with financial advisers(different banks in different countries) , I can tell you I do not just dislike them- I hate them.

I saw an ad. of the LM mortgage fund in the Age which said there is no entry and exist fee. I called their office somewhere in Australia and told them I am an overseas resident currently residing in Melbourne. They then somehow asked their rep. in HK to call me back and this Aussie in HK told me I have to go through an advisor. I then asked this lady on the phone why will I need an advisor, is it that they do not think I am capable to fill out the application form on the internet............................

Crazy people!!!!!!!!!!!!!!!

Another time I met an investment manager in HSBC who do not even know what company is CITIC. She was rather young and nice looking, so I forgive her.

 

[Martha]

I didn't go to a financial planner but, I needed some professional advice and thought some type of professional person would be able to help me out. So, I went to a CPA. A really nice guy!

His professional analysis: " Looks fine to me!"
$90.00 bucks please!!


A financial planner would have probably charged $200.00, for the same fine service. Unless I wanted them to handle my entire my entire financial portfolio, which they would gladly do, for 1.5% per year.

I know a CPA in my town that does the same thing, but he charges $1500 and gives you a pretty printout of what you have. And he says up front, he is not an investment advisor and can't help you pick investments. I am not clear what he does.

 

[justin]

I know a CPA in my town that does the same thing, but he charges $1500 and gives you a pretty printout of what you have. And he says up front, he is not an investment advisor and can't help you pick investments. I am not clear what he does.

Sounds like he's an orchard farmer.

For an orchard full of money trees.

 

[yakers]

Has anyone used the Motley Fool advisory service for financial planning.

Loks like no one replied to this so I expect no one has used their services. I would think that the best you could expect from MF is a canned program. So it doesn't cost much and you don't get much. But if you have, I believe $100K, Vanguard will give you some reasonable advice.

But its still good to learn a good bit to keep the advisors honest. I went to a financial advisor in 1980 and he set up a IRA for me and gave some other insurance and advice and I think it was worth it at thye time as I was clueless about financial issues. I still have a couple of the Oppenheimer and American funds although althoughj I cashed in two others. Now I am satisfied withpicking my own Vanguard funds, currently I have a Roth in the Vanguard Asset Allocation fund (VAAPX) and I am satisfied with that.

 

[Jeb-NY]

I had a FA for awhile. Luckly I was nervous and wanted to start out small and would only invest $10k to start instead of the $100k he wanted me to invest. In less than 2 year he ran it up to $2k. But loosing $8k wasn't the bad part he talked me out of buying Apple twice. The first time would have been a spilt adjust price of $3.25 and the second time around $6.

Oh well I probably wouldn't have bought enough to matter anyway. Now that I'm about to jump into ER, I'm trying to convice myself I can do it all, when I roll out the lump sum from my pension plan. I have done fairly well on the portion I have been managing but that's only about 30% of the total.

Jeb

 

[farmerEd]

When I was muc h younger I went to see my first and last FP,; he had an ad in the paper for free 30 minute initial consultation...so I went.

During the talk he takes 2 phone calls that eat up perhaps 15 minutes (not a big deal imo, it was after all a free visit)..but then we finish up in 40 minutes instead of 30 because of all the interruptions...4 days later a bill shows up for $20 for the "extra" 10 minutes...never paid his bill and never went back.

 

[justin]

During the talk he takes 2 phone calls that eat up perhaps 15 minutes (not a big deal imo, it was after all a free visit)..but then we finish up in 40 minutes instead of 30 because of all the interruptions...4 days later a bill shows up for $20 for the "extra" 10 minutes...never paid his bill and never went back.

Wow. No wonder he had to advertise in the paper to get clients.

 

[frayne]

I had a FA for awhile.  Luckly I was nervous and wanted to start out small and would only invest $10k to start instead of the $100k he wanted me to invest.  In less than 2 year he ran it up to $2k.  But loosing $8k wasn't the bad part he talked me out of buying Apple twice.  The first time would have been a spilt adjust price of $3.25 and the second time around $6.

Oh well I probably wouldn't have bought enough to matter anyway.  Now that I'm about to jump into ER, I'm trying to convice myself I can do it all, when I roll out the lump sum from my pension plan.  I have done fairly well on the portion I have been managing but that's only about 30% of the total.

Jeb

Jeb, had the same concerns you currently have.  After reading a number of books recommended by others on this site and a few seminars I took the big jump in July and ERed.  Rolled over 401K and pension lump sum into an IRA, with no problems.  A little discipline and a game plan will go along away to lessen your apprehension. It ain't rocket science and the additional benefit you get is the satisfaction of being in control of your own destiny.  I'm simply amazed by the number of (educated) people that are clueless when it comes to financial planning and investing.  Seems like many are happy to let someone else (FP) make decisions about their financial futures.  I guess I just don't understand.   

 

[Sundance Kid]

Unless you're dumber than dirt, (I can't fix the flapper in the toilet) you don't need an FP, to handle your stuff. It aint rocket science, it's just controlling what you have and doing it your way. Do a little reading, decide what's best for you and yours and go for it! A Planner is gonnna do what he wants, to make it look like he cares about you but, he's gotta make money too! So he charges you a fee, based on the value of your account invested. After that, You don't control diddly! You may get 2 consultations a year, to discuss the route they are taking with your assets but,do you get any input?? Probably not! Except you can void the agreement; pull your money out, (after paying a fee for services rendered) and go your merry way.

You wouldn't have been any worse, to do it all by yourself, in the beginning.

I still can't fix the flapper.

 

[yakers]

J I'm simply amazed by the number of (educated) people that are clueless when it comes to financial planning and investing.

This is a real fact that a lot of people don't discuss. There are a lot of really smart people (I work at NASA, my wife is a teacher...) who have no knowledge or interest in things financial. Often they don't manage their finances or have anyone else do it either. Sometimes this even works out in the end if they have some pension structure and just work a long time. But they miss the benifit of those early dollars being intelligently invested and working for them.
But people don't want to discuss financial issues because talking about money is no polite or it turns into a one ups manship game. Thats why this board, Motley Fool, Vanguard Diehards and the like are really good forums available through the internet.