Financial Advisor

[easysurfer]

Another quick question.. are there FA that specialize in FIRE?
this first introductory meeting really just turned into a conversation , because i did not have all my info on current portfolio or pension info but he did make a comment that i shouldnt think about retiring yet because i am too young.

I didnt say this but i was thinking SIR, that why i am talking to you to see if its a viable option :smackhead

Before I FIRE'd, I had two meetings with a fee only financial planner. If I recall correctly (which is a bit dicey these days ), I found the planner through https://www.napfa.org/ or https://www.garrettplanningnetwork.com/

My first meeting was more a general can I retire, then a second meeting was when I was ready to pull the trigger to make sure my ducks were in line (like using a HSA after I qualitied for health insurance -- there was no ACA at the time). Those meetings I felt helpful as they were focused on my "can I and how do I do" type questions. There wasn't a conversation about the planner managing my investments.

A thing to remember is who is hiring who. If the planner changes topics like about wanting to manage your investments but that wasn't why you hired him or her, that's a red flag.

I no longer work with the planner because she switched to a subscription model instead of only per issue. The subscription model wasn't my cup of tea as I'm primarily DIY. So, we wished each other well and went our separate ways.

 

[OldShooter]

Another quick question.. are there FA that specialize in FIRE?
this first introductory meeting really just turned into a conversation , because i did not have all my info on current portfolio or pension info but he did make a comment that i shouldnt think about retiring yet because i am too young.

I didnt say this but i was thinking SIR, that why i am talking to you to see if its a viable option :smackhead

Don't be discouraged. Remember that anyone can buy business cards that say "Financial Planner" or "Wealth Manager." $15.00/100 at Vistaprint.com IIRC.

You'll probably have to kiss a few frogs before you find your prince.

 

[Kings over Queens]

Timely post and question by the OP. I have been self directed my entire life, but have a trusted CPA and advisor for the last 35 or more years. The "Problem" with that relationship is that he knows me too well, if that makes sense. Because of that, our meetings tend to be very quick and "you're fine" kind of thing.

We've got a meeting on the 28th and based on that, I might look for a consult with a stranger, just to get that impartial view of my position and to expose any blind spots.

 

[stedmakr]

A couple of thoughts: Financial planners, Investment Advisors, wealth managers etc are all salesmen They are taught sales techniques and how to close a sale. Be wary.

This industry uses a compensation model called Assets Under Management or AUM. A common rate is 1% but it is often higher. If it is your desire to have the salesman manage $2 Million in investable assets you are looking at an annual commission of $20,000. You pay the 1% every year. If you accept some form of a buy and hold strategy it is hard to justify this type of expenditure. Even some fee only advisors angle towards establishing an AUM relationship.

A short vignette: I have a relative who went through a divorce and asked my wife and I to review her finances since she was now on her own. Her money was being managed by an advisor who was charging an AUM fee of 2.27%. The advisor had also placed a fair portion of ny relative's portfolio in high cost load bearing mutual funds. Over the years my relative had befriended this advisor and they met socially. My relative decided to stop her financial relationship with this advisor and her firm. The advisor cut off the friendship. Over the years the advisor had overcharged my relative thousands and thousands of dollars.

My guess is that just about everyone on this board knows at least one person who has been gouged by someone in the financial industry.

So what do you do? I think the key is personal education. This board is helpful as are many excellent books. I personnally enjoy listening to a few financial podcasts when I exercise. The best in my opinion is, "The Retirement Answer Man" with Roger Whitney. The focus is on the financial issues that individuals approaching retirement and in retirement face. I am only endorsing the podcast. Bogleheads.org also has excellent forums.

 

[UpQuark]

...What are the real spending habits of retired people. i dont understand taxes or healthcare spending.
...

The Great Courses has a course called 'How to Plan for the Perfect Retirement' that might help you generate questions. It has lectures about differentiating between a salesperson versus a true financial advisor, and about the spending curves during retirement (more during go-go years, less during slow-go years, and then more spending again toward the end of life), etc.

But the course costs money unless you are already a subscriber (which also costs money, I should probably re-think my subscription, it used to be cost effective when I was younger and watched/listened to lots of lectures).

They also have a course on investing which I think I better go watch myself.

 

[Koolau]

A couple of thoughts: Financial planners, Investment Advisors, wealth managers etc are all salesmen They are taught sales techniques and how to close a sale. Be wary.

This industry uses a compensation model called Assets Under Management or AUM. A common rate is 1% but it is often higher. If it is your desire to have the salesman manage $2 Million in investable assets you are looking at an annual commission of $20,000. You pay the 1% every year. If you accept some form of a buy and hold strategy it is hard to justify this type of expenditure. Even some fee only advisors angle towards establishing an AUM relationship.

A short vignette: I have a relative who went through a divorce and asked my wife and I to review her finances since she was now on her own. Her money was being managed by an advisor who was charging an AUM fee of 2.27%. The advisor had also placed a fair portion of ny relative's portfolio in high cost load bearing mutual funds. Over the years my relative had befriended this advisor and they met socially. My relative decided to stop her financial relationship with this advisor and her firm. The advisor cut off the friendship. Over the years the advisor had overcharged my relative thousands and thousands of dollars.

My guess is that just about everyone on this board knows at least one person who has been gouged by someone in the financial industry.

So what do you do? I think the key is personal education. This board is helpful as are many excellent books. I personnally enjoy listening to a few financial podcasts when I exercise. The best in my opinion is, "The Retirement Answer Man" with Roger Whitney. The focus is on the financial issues that individuals approaching retirement and in retirement face. I am only endorsing the podcast. Bogleheads.org also has excellent forums.

It could be worse than an AUM relationship also selling load funds. I had an advisor who put me into stuff that was an actual fraud. He also induced me to take aggressive right offs which the IRS disallowed at the same time the investments became worthless. But, he was a nice guy. He invited us to stuff like BD parties and anniversaries with his DW. How sweet!

 

[rmorris50]

I have found I really had to take FIRE into my own hands. Listening to podcasts, reading blogs, YouTube videos, and most of all, for years now projecting out our finances in excel over the rest of our lives. So projecting income, asset growth, withdrawals, expenses and taxes year over year.

Good luck finding an advisor that will focus on FIRE. Prob a fee only advisor is best. But most want assets under management for as long as possible while selling you financial/insurance products.

Which isn’t totally bad, but gotta be careful for sure. For every good advisor there are prob 10 bad ones. We use Ameriprise and we spend about .9% a year on AUM and 1200 a year for an annual retirement plan.

Many will baulk at that cost but I have a spouse that hates anything money so the FA is the coach/bad guy and if I die the advisor knows my husband well. I am also an executive in the financial industry so it helps to have someone else manage our money so I don’t accidentally run afoul of any insider trading laws.

Would we have done the same on our own? Who knows but given we went from zero to a cool few million over 20 years we are doing okay.

Best of luck to you!!!

 

[orbops]

My wife and I went to a few free sessions FA after listening to one of his lectures at the local library. I am 56 and retired, and my wife is 60. We have about 2.7M and our mortgage is paid off, with no kids. I am extremely confident of my investing capabilities, but my wife is nervous of risk.

After laying out our holdings in retirement & non-retirement monies, he tried to convince us that we should move most of our retirement funds into an annuity. He also wanted us to move a lot of non-retirement funds into his managed portfolios (even though I've averaged about 17% return for 20+ years), where they charged 1% fee of all assets. He felt that my estimates of a 5% yearly return that I used in a spreadsheet was way too aggressive, and that I should assume a 0 to 1% annual return going forward. He really played into my wife's fear of risk, and it caused us to have a few arguments about our future finances - essentially around "Why are you refusing to take the advise of a professional?"

Ultimately, we agreed that we would reduce risk from a 85/15 portfolio to 70/30. We did NOT transfer any funds into any of the options the FA offered, and have not been back to see him. Personally, I don't think you need to see a FA.

 

[cxr133]

My wife and I went to a few free sessions FA after listening to one of his lectures at the local library. I am 56 and retired, and my wife is 60. We have about 2.7M and our mortgage is paid off, with no kids. I am extremely confident of my investing capabilities, but my wife is nervous of risk.

After laying out our holdings in retirement & non-retirement monies, he tried to convince us that we should move most of our retirement funds into an annuity. He also wanted us to move a lot of non-retirement funds into his managed portfolios (even though I've averaged about 17% return for 20+ years), where they charged 1% fee of all assets. He felt that my estimates of a 5% yearly return that I used in a spreadsheet was way too aggressive, and that I should assume a 0 to 1% annual return going forward. He really played into my wife's fear of risk, and it caused us to have a few arguments about our future finances - essentially around "Why are you refusing to take the advise of a professional?"

Ultimately, we agreed that we would reduce risk from a 85/15 portfolio to 70/30. We did NOT transfer any funds into any of the options the FA offered, and have not been back to see him. Personally, I don't think you need to see a FA.

Thanks for the reply. thats what im trying to do get a roadmap for the wife to prove that we will be Ok and to have a budget in retirement that she will have to stick with.

she doesnt trust me ever since the lease to purchase jeep grand cherokee i bought in 2000

 

[Koolau]

Thanks for the reply. thats what im trying to do get a roadmap for the wife to prove that we will be Ok and to have a budget in retirement that she will have to stick with.

she doesnt trust me ever since the lease to purchase jeep grand cherokee i bought in 2000

If I may say so, that seems a near trivial reason to lose trust. Is there a "rest of the story" that you are willing to share?

I bought a Vette in 1970. I'm glad DW didn't hold it against me that it was kind of a bone head move at the time. I lost a bunch on that car, but I (mostly) got exotic cars out of my system and have pretty much had practical cars since. I think DW realizes that I (like everyone) makes mistakes. I'd like to think she believes I (usually) learn from my mistakes. YMMV

 

[Badger]

A person needs to have almost as much knowledge of investing to be safe in picking a financial advisor as it would take to manage their money themselves. But then what would be the point other than hand holding?

Cheers!

 

[frayne]

A person needs to have almost as much knowledge of investing to be safe in picking a financial advisor as it would take to manage their money themselves. But then what would be the point other than hand holding?

Cheers!

+1

 

[Librarian]

You look to be in good shape!

Hi All,


Thinking more about retiring and have run the calculators in Firecalc and Fidelity a dozen times i get somewhere between 95-100% but i feel like i am just inputting numbers without an understanding on where the rubber meets the road . What are the real spending habits of retired people. i dont understand taxes or healthcare spending.

So i have an Appt with a FA\ Wealth management and i want to be able to ask pertinent questions.

Wondering if you guys could help me out with educated questions i should be asking at this point?
not worried about fee structure to FA at this time

just some basic info me 54\wife 55 , I have a Pension with healthcare fully covered. Not sure i qualify for a lump sum payout there is some language the Tier i am may not qualify. My wife and i both contribute to our 401K and close to 2M combined at this point. not much cash on hand, house paid off. would like to retire 2028 would love to retire 2025

kids: youngest daughter leaving for college in the fall. not a huge commitment she received a tuition scholarship so we only have to pay room and Board.

other than that i think we are ready to downsize and could move from a HCOL to a LCOL area.

Thanks

We did one of those "free dinners" with an FA prior to retiring (DH at 58 in 2021 & me at 56 last year).
We are blessed with 2 nice pensions--FA said 2 of us was like winning the lottery! (OK!)
No debt. Downsized 5 yrs ago. Youngest just graduated (529 paid all college expenses).
Our pensions more than cover our living expenses.
Also have a few investments--that is our travel slush fund. Doesn't have to last the rest of our lives, just as long as we can travel.
Health insurance sucks for a few years...$1700/mo currently as DD works for a sole proprietorship & no insurance & this was a cheaper option than ACA. Will drop to $1300 next year when she turns 26. Finally all kiddos off phone/car insurance. We look at all of these as "mini-raises"!

There is nothing wrong with paying for a FA session--JUST REALIZE they are going to try to sell you their services. They can be quite compelling.
But you look as though you have a good plan already.
Don't be too quick to jump in with FA (DH wanted to...).
Let it marinade a bit.
I knew we didn't need one.