How many of you members use............

[roger]

Hello everyone:
I'm a new member and in the early stages to learn the ropes............please bear with me.
I'm 62 and recently retired and in the process of getting information about CFP.I'am also an
avid fulltimer and with not much time to keeping my
finances on check.I'd like to know:
How many of you members use the advice of a CFP and
your rate of satisfaction,as well as any input that you
would like to share in my seach to a reliable one.
Thanks for your time in replying.roger.

 

[Cut-Throat]

also an
avid fulltimer

Hi Roger,

What is an avid fulltimer?

I manage my own money. Read a lot about finances, make my own mistakes. etc.

As far a CFP. I have had a few experiences with people 'helping' me with my money. They were interested in 'helping' themselves to it.

I'm not saying that there are not any legit CFPs. But one thing is for sure. You will never find anyone more intereted in your money than you!

 

[Ted]

Roger,

If you are retired you certainly should be able to find the time to manage your finances yourself, without incurring the expense of a "professional" to do it for you.

Basically, it's a matter of getting your investments allocated among different assets having low administrative expenses (and taxes, though those are much less of an issue after retirement). Then -- unless you are an investment junkie like me -- you just sit back and do nothing, other than to determine your asset values about once per year and make modest shifts among them to maintain your desired allocation between stocks, bonds, etc.

The problem with "financial professionals" is that most fall into one of two categories. Either they work on commission and have an incentive to sell pseudo-sophisticated "investment products" having high -- and often hidden -- costs. Or, if they are "fee only" advisors, they try to establish a permanent relationship under which they extract about 1.5% of your wealth every year for "managing" it.

I'm sure that most of the participants in this forum would agree that you can't go wrong by following the advice on the web sites of the Vanguard Company (Vanguard.com) and TIAA-CREF (tiaa-cref.org), and investing in their mutual funds. A lot of what is discussed in this forum basically amounts to "fine tuning" of investments in mutual funds (and, possibly, annuities) of the type that these companies offer.

 

[ats5g]

If I was going to go looking for a competent, fairly conflict-free [if there is such a thing] planner/advisor, I'd look at these sites:

The National Association of Personal Financial Advisors (fee-only CFP's):

http://www.napfa.org/

The Garrett Planning Network (fee-only CFP's):

http://www.garrettplanningnetwork.com/index.asp?tohome=yes

and possibly The Financial Planning Association:

http://www.fpanet.org/

One of my favorite websites for free stuff on retirement planning and other related areas is TIAA-CREF's Research Institute Website (especially the articles by Thomas Walsh)

http://www.tiaa-crefinstitute.org

Frank Armstrong's site is also very good

http://www.investorsolutions.com/Premier/LearningCenter.cfm?Show=Article_Index&Language=ENGLISH

So is Eric Haas's reading room

http://www.altruistfa.com/readingroom.htm

If you are going to use the services of a financial planner, I'd do some self education/research into the areas of interest: Withdrawal Studies, Asset Allocation, Impact of fees on investment performance, etc. That way you'll be able to participate better, get the most for your money, and will be less likely to be hoodwinked into bad investments. There's a boatload of free stuff (research on the subject of retirement) out there. If you've got a question on specific areas, I'm sure one of us has some useful links and material.

- Alec

 

[Bob_Smith]

How many of you members use the advice of a CFP and your rate of satisfaction.

When I first got into this in 1991, I went to three different planners to see what they had to say. I had no clue what to do. Fortunately, my radar picked up on a couple of things that didn't sound quite right, but what did I know? Nevertheless, I decided to learn a little about it myself, and then I planned to try other planners. My intent was not to learn personal finance, it was to learn how to find a good adviser and participate in that process. I quickly learned five things:

1) There are a thousand ways to mess up.
2) Most financial planners are salespersons disguised as advisers.
3) I should NEVER use a financial planner unless I know personal finance; it's the only way to protect myself from bad investments and/or high fees. (But if I already know what I'm doing, why would I need the services of a planner?)
4) Personal finance isn't difficult to learn.
5) Investment costs have a huge impact on the outcome.

If I had followed the advice of any of the three planners I consulted initially it would have been a disaster for me. I'd have very little now. None of them were crooks, they simply had products to sell that weren't nearly as good as I could buy elsewhere, their costs were high, and their interests weren't aligned with mine. Consequently, their advice was terrible. Of course, I had no way of knowing that until I learned the ropes myself. So I have never used a planner and never will.

 

[wabmester]

Vanguard offers free planning advice if you move a chunk of money to them. I was planning to move a chunk anyway, so I took advantage of the freebie.

I got pretty much what I expected, but not what I wanted. I got a CFP who gave me a vanilla asset allocation / buy-and-hold strategy and a suggested list of Vanguard funds that fit the suggested allocation.

When I asked specifically about hedging strategies, metals, real estate, and holding bonds vs bond funds, I got a party line that steered me towards their funds.

Now, that's not necessarily a bad thing. If you're already a believer in the Vanguard approach, then it may be a useful service for you. (I guess I'm a market timer in that it doesn't make a lot of sense to me to move into bond funds when all indicators point to increased interest rate risk or into equities right after a crazy rally.)

 

[unclemick]

I'm a diehard Bogle fan and thus prefer Vanguard funds. After thirty plus years of investing, I not only discount planner's of all stripes, I also do not trust my own 'brilliant' advice - given my track record. So the core (73%) of portfolio is balanced index funds appropriate for my age and financial situation - where in my greastest move is to do nothing.

However being a male of the species , play/money has been invested over the years - gold, real estate, interest plays, drips, foreign bonds, closed end funsds, converts, warants, etc.- the sucesses were spent and the failures conviently forgot.

I continue to read and plan and play but the core will always be balanced index - to protect me from myself.

 

[Ted]

When I asked specifically about hedging strategies, metals, real estate, and holding bonds vs bond funds, I got a party line that steered me towards their funds.

Now, that's not necessarily a bad thing.  If you're already a believer in the Vanguard approach, then it may be a useful service for you.  

The reason I so enthusiatically recommend Vanguard to inexperienced investors is that the company is extraordinarily good about steering people away from investments that are unsuitable for them, and looking out for their interests by keeping the cost of their own funds the lowest in the industry.

I do some pretty high risk investing in futures contracts, options, and actively managed small cap stock funds of companies other than Vanguard, but I keep the bulk of my assets in Vanguards "plain vanilla" stock index and bond funds.

 

[Cut-Throat]

Unclemick,

I think I have a similar philosphy as yourself.

Would you mind listing your portfolio in terms of percentages in Vanguards funds?

 

[unclemick]

Cut-Throat

tax deferred
50% - VG Lifestragety mod.(60/40)
22.2%-VG Lifestragety cons.(40/60)
5.5%% - VG REIT index
1.1% - VG small cap. value index
1.7% - Putnam tot. ret(old 401k)

taxable
11.1% - Drips(40 stocks-hobby)
3.4% - cash
2.8% - Gabelli conv(closed end)
2.2% - VG High yield corporate

The taxable 'pile' div/interest including the close to zero cash yield returns a tad over 4% when I last checked this may(State tax time).

 

[Ted]

Here's a recent experience with financial advising that most of you will recognize as a "horror story."

I have a friend whose parents are well into their 80s and have a net worth of several million dollars. Their father is apparently getting somewhat senile and is even more paranoid about his money than is justified by the real risks that abound. He periodically "jumps" from one financial institution to another as his main source of investment management.

Recently he contacted Fidelity about transferring his assets to them. The "advisor" there recommended putting 60% of his assets into stocks (of which a large part would no doubt have been Fidelity's managed funds).

I think that some individual Fidelity funds are good investments and have some money in them. But this story reinforces my own experience that Fidelity as a company is excessively aggressive at marketing its actively managed funds without regard for their suitability for a particular individual. In contrast, Vanguard actually discourages its customers from investing in certain of its funds when it appears that they are inappropriate (often as the result of having experienced a big run-up in price).

 

[wzd]

I like Fidelity from a service viewpoint. I was using them after moving 401k funds they administered to an IRA account, and have them transfer periodic payments to my bank accounts. I also deposit payouts from real estate to by bank and transfer them using their "money line". I really like being able to do stuff myself online. However, the majority of my mutual funds are not in Fidelity funds....I hold them in a fidelity brokerage account and am moving toward more Vangard funds.

The funds you hold and your broker can be different. They have made a number of recommendations when I sat down with them to review my portfolio, and I have taken very few of them. So, I guess I have had the same experience described above - although their recommendations were not really unsuitable, I thought there were better options.

Anyone have input on Vanguards service - stock and fund research, bank transfer options, etc? Since I am moving toward their funds it might make sense to move to them as a broker as well.

Wayne

 

[Bob_Smith]

Anyone have input on Vanguards service - stock and fund research, bank transfer options, etc?  Since I am moving toward their funds it might make sense to move to them as a broker as well.

I just opened three brokerage accounts at Vanguard (taxable account, my wife's SEP, and my IRA). They will not open a SIMPLE or 403(b) brokerage account. I don't know if that's just Vanguard or if nobody will do that. Fees seem reasonable. For example, they charge a minimum of $40 and a maximum of $75 for a treasury trade online. I opened these brokerage accounts to buy TIPS. Their brokerage account fee is only $15 per account for Voyager clients and they don't assess the fee until 7/2005 at this point. My taxable account is linked directly to my credit union checking account and I can transfer funds both ways. The online process is smooth and efficient. One thing I value at Vanguard is the availability of Wendy Deutch for retirement plan tax information. She is an incredible resource and has never steered me wrong. The information she has provided to me would have cost quite a lot if purchased from an accountant. I have received erroneous information from other front line Voyager staff, however. Staff have no conflicts as far as I can tell. They are salaried, I believe. I have everything except most of my cash (which is at ING earning 2%) at Vanguard. I haven't used their research services yet.