He waives the fees for her and will do the same for me as a family member. Obviously there is the issue of mixing family and money, but other than that, are there any advantages or disadvantages to investing through him versus Vanguard? Thanks.
I think that disadvantages are primarily from his perspective. Will I put my wife in an awkward situation with her brother if I suggest investments that don't work out.
In general there are three issues with using a financial adviser
- Is he competent
- Is he trustworthy
- Does his fees justify what I can do on my own.
I think having a family member who is both knowledgeable and willing to help you with investments is terrific benefit. The same way that having a doctor, lawyer, CPA, or Vet in the family is great for if nothing else getting a second opinion.
Of all the silly letters that go behind financial advisers names the only two that should impress an individual investor, are CPA, and CFP in that order. The programs are rigorous and the pass rates for either credential are lower than the bar exam. I have an MBA, 25+ years of successful investing, and I can tell you that would take a full year of study for me to have a chance at passing a CFP. I have yet to meet somebody who has passed the CFP on their first try.
So while a CFP is no guarantee that guy is competent is an indication. Trustworthiness is an issue you will have to judge for yourself.
The final issue is fees, if he waives there is at least a reasonable chance he could make you more money than sticking your money in a couple Vanguard funds.
So my advice is unless your think your sister married, and stupid liar, you should at least listen to his advice. Now I don't think this gets you off the hook about learning about investing, because it is after all your money and your future. But to me 90% of successful investing is A. Saving more than you earn. and B. not doing anything stupid.