Family and CFP

[73ss454]

I'm not missing your point, you are not understanding how things work. BIL of OP can buy LOAD mutual funds at NAV, because he's registered. With some fund families, you can buy at NAV for family members, so he could get American Funds or Franklin or Oppenheimer for NAV for family members. I'm sure NOT everyone on here knows that...........

So after you buy in at NAV are the 12B1 fees gone and the other expenses also lower.

 

[FinanceDude]

The CFP exam was a joke compared to the CPA or CFA exams. Even the CFA didn't compare to the CPA in the sheer amount of material to cover. That being said, 99% of it doesn't have anything to do with investments or financial planning.

Most people would be shocked if they knew how little training most CPA's have even in personal taxes. It was hardly a blip in my accounting schooling or CPA study. I had to learn most of it through my work.

I'm just glad my exam taking days are over.

I'll bet you are....... Really, how many CPAs do you know that are knowledgeable about personal investing?? I guess I should say CPA and nothing else..........

 

[HFWR]

"He has a BA, an MA, a PhD, and is a BMF besides..." Cheech and Chong

 

[saluki9]

So after you buy in at NAV are the 12B1 fees gone and the other expenses also lower.

Yes

On brokered share classes the A class is usually much cheaper than B or C. 99% of the time the 12b-1 will be 25bps.

 

[Sarah in SC]

Saluki and Brewer are right (and FD) about that CFA--what a mother--I would never even attempt it!

But the PFS designation of CPAs is pretty good, and it does what you said, Saluki, in beefing up the personal investment side.

And I, alas, am not in the 52% of the first time passers of that CFP exam. It was a tough program that took me 3 yrs to complete, but it is a puny 98 lb weakling getting sand kicked in the eyes compared to the CFA.

 

[FinanceDude]

Saluki and Brewer are right (and FD) about that CFA--what a mother--I would never even attempt it!

But the PFS designation of CPAs is pretty good, and it does what you said, Saluki, in beefing up the personal investment side.

And I, alas, am not in the 52% of the first time passers of that CFP exam. It was a tough program that took me 3 yrs to complete, but it is a puny 98 lb weakling getting sand kicked in the eyes compared to the CFA.

Hey at least you got a CFP.........I still haven't scheduled my test..........

 

[Sarah in SC]

And if you don't pass on the first try, I will taunt you for a second time!

 

[73ss454]

Yes

On brokered share classes the A class is usually much cheaper than B or C. 99% of the time the 12b-1 will be 25bps.

Sorry, what I meant was if a relative buys shares via their BIL can the brokerage discount or remove the yearly expenses or the 12B1 fees?

 

[saluki9]

Sorry, what I meant was if a relative buys shares via their BIL can the brokerage discount or remove the yearly expenses or the 12B1 fees?

No, those are controlled by the fund company, the custodian has nothing to do with those.

 

[73ss454]

I'm not missing your point, you are not understanding how things work. BIL of OP can buy LOAD mutual funds at NAV, because he's registered. With some fund families, you can buy at NAV for family members, so he could get American Funds or Franklin or Oppenheimer for NAV for family members. I'm sure NOT everyone on here knows that...........

That's great but Saluki just posted that the 12B1 fees yearly ER fees would continue. So unless the BIL used no load funds there would be no way he could waive his fees and commissions for a family member. I don't necessarily think he should because he should get paid for his experties but he's the one that said he would waive them.

So back to square one. I'd like to see what the BIL would say about advising what funds he should put his money into with no loads and low expenses.

 

[clifp]

I thought that CFAs (chartered financial analyst) were involved primarily in analyzing securities rather than performing financial planning for individuals, which is why I didn't include them. Still I stand corrected.

The larger point is that a fair number of alphabet soup designation can be obtained primarily by sending a check to the right person, CFP isn't one of them.

 

[samclem]

How is the OP to know if the BIL is competent?
-- Some sell high ER funds and other vehicles. These people are either unethical or incompetent. Some may even believe that these are in the best interests of their clients--these people are only incompetent. The BIL could be one of those.
-- To judge whether the BIL (or any other CFP) is competent (and to make the determination based on more than blind faith), you have to educate yourself about a few things. It's not hard, and most people here have done it. By the time you've done that, you've got the skills to manage your own portfolio, and the CFB (whether a BIL or not) adds little value.
-- The OP knows about Vanguard, he knows about this board, and he knows enough to ask the question. To me, that tells me the OP already knows or is well on his way to knowing what he needs to know to do it himself and involving the BIL, with all the possible family issues, is probably not worth it.

re Vanguard: No, they aren't the only answer. But they are a solid answer and the leader in offering low cost investment products to retail customer.

Allwork&noplay (if you are still out there),
- You say your BIL has assisted you with your wife's Roth IRA. Would you mind sharing how your BIL has invested these funds, and how they relate to the rest of your/your wife's portfolio? This might provide some useful insight.

 

[FinanceDude]

That's great but Saluki just posted that the 12B1 fees yearly ER fees would continue. So unless the BIL used no load funds there would be no way he could waive his fees and commissions for a family member. I don't necessarily think he should because he should get paid for his experties but he's the one that said he would waive them.

So back to square one. I'd like to see what the BIL would say about advising what funds he should put his money into with no loads and low expenses.

Maybe he'll do that in a fee-based account, like Vanguard keeps asking me to do with their funds.........

 

[saluki9]

I thought that CFAs (chartered financial analyst) were involved primarily in analyzing securities rather than performing financial planning for individuals, which is why I didn't include them. Still I stand corrected.

Not this one

There must be enough of us. The CFA Institute keeps sending me invitations to their private wealth management conferences.

 

[saluki9]

Maybe he'll do that in a fee-based account, like Vanguard keeps asking me to do with their funds.........

I'll bet most people here don't know that. I get a mailer at least twice a week from Vanguard begging us to use their funds in our fee based accounts. We get phone calls too.

 

[73ss454]

Maybe he'll do that in a fee-based account, like Vanguard keeps asking me to do with their funds.........

Read the first post, the BIL says he'll waive all fees. To me that would be fee based fees, 12B1 and ER fees. So most likely the BIL can't and is not going to do what he said he would.

 

[saluki9]

That's great but Saluki just posted that the 12B1 fees yearly ER fees would continue. So unless the BIL used no load funds there would be no way he could waive his fees and commissions for a family member. I don't necessarily think he should because he should get paid for his experties but he's the one that said he would waive them.

Not true at all, you're distorting what I said.

Most likely he would just use a wrap and waive the advisory fee.

 

[73ss454]

Saluki, sorry, that's what I understood by your post.

When you say advisory fee can you explain.

Also can the BIL waive the 12B1 given to him from the mutual fund company?

 

[saluki9]

Saluki, sorry, that's what I understood by your post.

When you say advisory fee can you explain.

Also can the BIL waive the 12B1 given to him from the mutual fund company?

Brokers or Fee based advisors earn their money in very different ways. I kinda figured this was common knowledge among informed investors but I can see that it isn't.

A broker (usually somebody with an NASD series 7 license) is somebody who sells investments for a commission. Their only duty is to sell investments that are "suitable" for the client. They have no fiduciary duty to the client. (think of your typical large wirehouse broker)

An Advisor (or adviser depending on who you ask) is somebody who holds a series 65 license and provides service for a fee (usually a % of assets) They have a fiduciary duty to do what is best for the client and are held to very strict standards. They do not sell load funds and instead get money from the stated fee charged to clients. I think it is a much more honest way to do business because the client sees exactly what they are being charged and can decide for themselves if they think it is worth it. It is very easy for an adviser to simply not charge their fee. The client would still pay the underlying fund costs, but would not pay an advisory fee.

 

[FinanceDude]

I'll bet most people here don't know that. I get a mailer at least twice a week from Vanguard begging us to use their funds in our fee based accounts. We get phone calls too.

No to mention the VG ETF dudes calling me all the time.........

 

[FinanceDude]

An Advisor (or adviser depending on who you ask) is somebody who holds a series 65 license and provides service for a fee (usually a % of assets) They have a fiduciary duty to do what is best for the client and are held to very strict standards. They do not sell load funds and instead get money from the stated fee charged to clients. I think it is a much more honest way to do business because the client sees exactly what they are being charged and can decide for themselves if they think it is worth it. It is very easy for an adviser to simply not charge their fee. The client would still pay the underlying fund costs, but would not pay an advisory fee.

In other words, saluki and I do business the way described above, but in different arenas.......

 

[brewer12345]

In other words, saluki and I do business the way described above, but in different arenas.......

Yeah, but do they buy you lunch?

 

[FinanceDude]

Read the first post, the BIL says he'll waive all fees. To me that would be fee based fees, 12B1 and ER fees. So most likely the BIL can't and is not going to do what he said he would.

Quite an assumption based upon no facts shared by OP.........

 

[73ss454]

Saluki, thanks but I knew that.

I just wanted to see whether the BIL was putting him into load funds and waiving all fees or no load funds and no advisory fee. When he says waiving all fees I'd like to know what he meant.

 

[saluki9]

Yeah, but do they buy you lunch?

Sadly no, which is a real bummer!

I will say that I severely compromised my independence by accepting a free fleece vest from Barclays iShares. I look pretty sweet in it though