Financial Planner, Financial Advisor, or CPA? Which one to use?

[OldShooter]

A lot of good information and recommendations in this thread. Best of luck to the OPs on their situation. My experience with the whole CFP thing: it’s not worth the paper it’s written on. Worked for a short time with a CFP at Ameriprise, solely because my folks had an account with them for awhile at a different office. She was all about extracting as much money out of me as possible. Tried to churn my accounts and sell me products that benefited her way more than me. Couldn’t run away fast enough. Have received 100x more value from this forum than with that Ameriprise hustler.

WADR, I think your complaint is about Ameriprise not about CFPs in general. Personally I think the CFP is a bit over-rated but generally a good thing. Ameriprise has changed its name a few times over the years, but the behavior (by reputation -- I have never dealt with them) seems to have stayed pretty much as you found it.

Did you check her at https://brokercheck.finra.org/? Sometimes that reveals prior customer complaints. I got a "free steak dinner" promotion one time, checked the guy, and found 21 customer complaints pretty much all settled in the customers' favor and many for six figures.

 

[MTB4me]

Good point, Oldshooter, I could have been clearer in my post. No findings against this particular adviser, however. My point was that, on its own, a CFP designation doesn’t imply competence and, even though it should, doesn’t imply a fiduciary duty to the client. Beware and do your research. This particular adviser had no remorse for what she did nor did Ameriprise corporate view her behavior as irresponsible or predatory.

 

[OldShooter]

Good point, Oldshooter, I could have been clearer in my post. No findings against this particular adviser, however. My point was that, on its own, a CFP designation doesn’t imply competence and, even though it should, doesn’t imply a fiduciary duty to the client. Beware and do your research. This particular adviser had no remorse for what she did nor did Ameriprise corporate view her behavior as irresponsible or predatory.

Yes, but I don't think you'll ever see CFPs stand-alone as fiduciaries.

First reason is that CFP certificates are sold by a private nonprofit, so I'm not sure how they could have legal teeth.

Second reason is more important: CFPs are enthusiastically sold to Series 7 Registered Reps who are not fiduciaries, only governed by a "suitability" standard. Losing the Series 7 people would probably cost the CPF board a major piece of revenue, even cut into the top guy's $1M+ salary.

That said, on October 1, 2019 the CFP Board adopted a new Code of Conduct that mandates fiduciary-like behavior. The consequences for bad actors, though,can only be losing their certificate and the obligation to pay dues. Definite moral hazard there. Also, IMO the Board is not really serious about protecting clients when the code says “ … the Rules are not designed to be a basis for legal liability to any third party. “

As you advised: Beware and do your research.

 

[oldtimer]

CFP is a certification gained by passing a test and having experience in the field. It does not guarantee that the person's experience does not enter into gray areas outside of the regulations that were covered in the test questions.


I remember attending a test-prep training session for a professional certification for a different industry. The instructor told us to answer the questions per the standards that the test was about, not the way our company may actually do it in practice.

 

[SecondAttempt]

Remember this critical fact: Some Guy On The Internet (SGOTI) is not competent to be your estate planning consultant. Neither is “a social worker.” You have a complicated situation involving many important decisions. I’d encourage you to seek out an attorney or CPA (maybe both) and to spend the money necessary to optimize yours and your daughter’s future.

This is complex stuff. For example, arranging for your daughter to receive pension payments may simply substitute those dollars for dollars to which she is otherwise entitled from the state. Similarly, receiving insurance proceeds may have the same effect. IOW, the dollars you have arranged for her to receive from you may be totally wasted. Or maybe not. SGOTI has no idea, but the experts you need to find will know the rules as they apply in your state. This critical planing task is far more important and should precede any discussion of a financial planner. It may cost you a few thousand $ but will almost certainly be worth it.

+1 on this. You really need to consult an attorney. In addition to what was stated above, naming her as trustee could be disastrous. She should be beneficiary but not trustee.

I have a Phd and an MBA in finance but if I were in your situation I would still be hiring a lawyer!

 

[tmitchell]

I just met with a CFP to review where I’m at now that I’m moving into the spend down phase. I actually really liked him and he made some great points around Roth conversations and tax planning. Those two things get me a bit tied up in knots, so I’m considering hiring them to help manage all that.

However, when I run the numbers it’s a bit harrowing how much it’ll cost over 30 years. I plan to die with zero so paying them might help.

I’m on the fence though. Are conversions and tax planning as difficult as u fear? I’m not a big numbers person.

 

[travelover]

......... Are conversions and tax planning as difficult as u fear? I’m not a big numbers person.

Those services can be purchased by the hour. The way they really ream you is by charging an annual assets under management (AUM) fee. Remember "only" 1% is $10,000 a year on a million.

 

[CRLLS]

Those services can be purchased by the hour. The way they really ream you is by charging an annual assets under management (AUN) fee. Remember "only" 1% is $10,000 a year on a million.

^ +1

In addition when your investments drop by 30% ($300,000), to add insult to injury, he/she still bills you their 1% $10k (or is it then only $7k?).

 

[OldShooter]

+2 Offer to hire him on an hourly rate or a monthly fixed $ amount "subscription."

 

[tmitchell]

Those services can be purchased by the hour. The way they really ream you is by charging an annual assets under management (AUN) fee. Remember "only" 1% is $10,000 a year on a million.

Thanks. Seeing that on paper makes it a lot easier to say no!

 

[Love This Community]

Connected with Rick Ferri for a 15 minute introductory call. He seemed to be genuine. Looking forward to going through with his fee only service. Will update on how that experience goes in a couple of months. A little background; though I am a DIY’er when it comes to investing, I need someone to look at my portfolio to consolidate and advise what steps I should take to simplify our portfolio and position for growth with minimal tax bite. I guess, I am asking for that perfect recipe…[emoji3]

 

[G-Man]

Connected with Rick Ferri for a 15 minute introductory call. He seemed to be genuine. Looking forward to going through with his fee only service. Will update on how that experience goes in a couple of months. A little background; though I am a DIY’er when it comes to investing, I need someone to look at my portfolio to consolidate and advise what steps I should take to simplify our portfolio and position for growth with minimal tax bite. I guess, I am asking for that perfect recipe…[emoji3]

Please keep us updated. I just sent Rick an email as well. Hopefully I can get an appointment in 2023.

 

[Bamaman]

I'd suggest you talk with an estate lawyer. You probably need to set something up with a trust for your daughter. The atty may be very knowledgeable about financial issues and/or can make a recommendation. I agree with ERD50 that your friends and family may not be able to provide leads to who you are looking for.

Many such situations require a Special Needs Trust. I'm raising a 11 year old granddaughter and she'll need to be provided for. There are family attorneys that specialize in such trusts.

 

[Chuckanut]

Many such situations require a Special Needs Trust. I'm raising a 11 year old granddaughter and she'll need to be provided for. There are family attorneys that specialize in such trusts.

FYI, This may be useful to some.

There is also something called the ABLE account that is similar to a college savings plan, but is intended to help out children who have developmental issues that will have on going effect on their ability to care for themselves as adults.

 

[G-Man]

I have an upcoming 15 minutes meeting with Rick Ferri next week. For those who have had a meeting with Rick, what information should I have available so that the meeting can be very productive? So, should I send Rick some information in advance as well? Please advise.

 

[Love This Community]

Hi G-Man. I had my first 15 minute introductory call and he spent close to 25 minutes. It’s more of a get to know call where he wanted to have a bird’s eye view of what your goals are and your current spread of assets. It’ll also help if you can think of 3-4 questions that you’d like his help on and how he can help. Overall, first call is to establish the rapport. Don’t expect much in terms of deep dive or immediate recommendations from him. He will explain his next steps in the process and what to expect which is a 2-hour call. Nothing new here but a reiteration of what’s on his website. Based on the intro call you can decide whether you want to go forward or not. I did and am having my 2 hour session in few weeks. This is when I will need details of all my assets. How they are invested etc. hope this helps.

 

[VanWinkle]

I have an upcoming 15 minutes meeting with Rick Ferri next week. For those who have had a meeting with Rick, what information should I have available so that the meeting can be very productive? So, should I send Rick some information in advance as well? Please advise.

I have no experience with Rick other than meeting him at a Boglehead conference in 2017. Please let us know how the meeting goes.

VW

 

[G-Man]

I have no experience with Rick other than meeting him at a Boglehead conference in 2017. Please let us know how the meeting goes.

VW

I had my 15-minute introductory call with Rick Ferri, and he spent close to 25 minutes as well. We went over my retirement plan, and he provided some feedback. At the end of the day, we both agreed that there was no need for a follow-up 2-hour meeting. I can't thank Rick enough for spending 25 minutes out of his busy day to talk about my retirement plan.

I realize in talking to Rick, that each of us should embrace our own unique retirement plan. What works for me, and my wife may not work for others. It does help when you have 2 pensions, 2 401Ks, and 2 SS income.

 

[VanWinkle]

I had my 15-minute introductory call with Rick Ferri, and he spent close to 25 minutes as well. We went over my retirement plan, and he provided some feedback. At the end of the day, we both agreed that there was no need for a follow-up 2-hour meeting. I can't thank Rick enough for spending 25 minutes out of his busy day to talk about my retirement plan.

I realize in talking to Rick, that each of us should embrace our own unique retirement plan. What works for me, and my wife may not work for others. It does help when you have 2 pensions, 2 401Ks, and 2 SS income.

Thanks for the feedback. Rick seems to be a real gentleman and honestly concerned about retirement planning for the individual.

VW

 

[G-Man]

Thanks for the feedback. Rick seems to be a real gentleman and honestly concerned about retirement planning for the individual.

VW

Absolutely. A real gentleman willing to help you achieve your retirement goals.

 

[Rianne]

You should look for a CPA with a Personal Financial Specialist designation. Google find a CPA PFS.

This is what we did and maintain a relationship with him. We don't discuss investments. We discuss strategies for withdrawal for tax purposes, Roth conversions, etc. We've built an extensive bond ladder in the tIRA and will Roth convert. We didn't understand how taxes work in retirement. Long-term capital gains, wages vs self-employment vs unearned income. pb4uski suggested

https://www.irscalculators.com/tax-calculator

Our CPA-PFS felt this link was an excellent starter. He told us to e-mail him and cc his assistant because they are not taking new clients because their business is booming. Many big accounting firms are refusing new clients. This is a simple relationship with someone who answers our questions. He explains the numbers, period.

 

[doneat54]

Who ever you hire, pay by the hour. Don't get pulled into an annual assets under management agreement.

What he said. You want a "For fee" CFA to review your portfolio/retirement plan. I have done it a couple times.

 

[Yarnstormer]

Old thread here but I think OP really needs to try to get their special needs child on SS disability so they will be eligible for Medicare. My daughter has it and with her health problems it's likely she would be completely unable to buy health insurance should the ACA ever be repealed. The money is there but pre existing conditions would exclude her. It's been life changing getting her on that. The monthly income is nice but the health insurance has been the best. I'm self employed so I'm spending aprox $13k/annually on myself.