New financial planner

[RunningBum]

.03% $1,000,000 would be $3000/year.

The VG fee is 0.3%, not .03%, and OP has $680K, so it's about $2K/yr, to settle the math. This was already covered in the first 5 posts. What's your point?

As I suggested, they don't need to pay that for the rest of their life. If they're on it for two years, they get their portfolio set up and see how VG adjusts it based on returns. Meanwhile, OP is reading and learning, and is ready to take over. So maybe $4K to get things going while they are learning. Doesn't seem too bad to me. It's just one suggestion.

 

[Kayzmum]

Before you worry about how to invest the recently acquired money, be sure to understand any immediate and future tax impact based on your the possible decisions of what type of account you move the money into. You do not start the source of the new money, so unable to give any further advice.

Thanks for your reply. It's from a medical malpractice settlement.

 

[target2019]

.03% $1,000,000 would be $3000/year.

I am terrible with ratio and percent.

So, 3% becomes .03 when you use it in an equation. That's a bunch calculated on $1M -- $30,000.

But .03% becomes .0003, and times $1M that is just $300.

But the VG fee is .3%, and that is .003, or $3000.


Can't wait to find out if I made an error.

 

[sakowitzm]

One (more) thing to keep in mind, as someone already alluded to. After you park the money and are only getting .1% on it.... + .1% is far, far better than - 5%. Or worse.

 

[target2019]

Thanks for your reply. It's from a medical malpractice settlement.

The Psychology of Money by Morgan Housel is a good book to read.

In the chapter "Luck & Risk" this is written:

Luck and Risk are siblings. They are both the reality that every outcome in life is guided by forces other than individual effort.

NYU professor Scott Galloway has a related idea that is so important to remember when judging success--both your own and others':"Nothing is as good or bad as it seems."

I included that quote as it addresses what you'll hear or read as you seek an advisor, or D-I-Y plan.

This page describes investing risk: https://www.finra.org/investors/learn-to-invest/key-investing-concepts/reality-investment-risk

In the side menu are links to other pages in the series.

 

[gayl]

I was a Financial Advisor for 25+ years at firms like Schwab, Merrill and Fidelity. Do yourself a favor, if you really need hand holding and portfolio management, use Vanguard PAS or Schwab Intelligent Portfolios Premium.

Everything else is a rip off.

And no need to buy CDs. Get a high interest savings account. Stay flexible for when you're ready & have at least met with someone at Vanguard, Fidelity, or Schwab for free

Says someone who traded for years but now does better in indexed total market & tax free bond ETFs recommended by Schwab. (Just 4 investments)

 

[ScoopKona]

The big variable? Your age.

I agree with the advice here: index funds, DIY, and that reading list.

But what you do with money in your 20s is going to be wildly different from what you should do with it in your 70s.

 

[joedila]

Fidelity or Vanguard

I've been with Fidelity since the 1980's and have no problems with the services they provide. Vanguard is top notch as well....I don't think you can go wrong with either.

And you don't have to go with their fee-based plans -- I meet with our advisor once a year to review our portfolio and plan, and do most of the fund selections myself...but it has been pretty much on auto pilot for a long time.....

 

[HunterAdvisor]

You could start by hiring a few only Certified Financial Planner like Garrett Financial
Planning Network. There is a set fee to create a financial plan. I was a CFP many years ago & I feel this is the least possible conflict of interest.

 

[meleana]

We have a financial advisor affiliated with the Garrett Group who is fee only- for advice only. He does not manage our money. We pay him a yearly fee ( $1000). We meet with him via zoom ( since we moved away), phone calls and emails.

Initially we met with him and he did an entire plan for our lives in retirement and our money- flexible- and holistic.

We could also pay him an hourly fee instead if we want and yes- he does have a plan if you want him to manage your money for you.

 

[Thunder Up]

Op where you wanted to park the funds in 3 different institutions so that all the funds are FDIC insured. Better way is to structure the ownership of the accounts so that all of the funds are FDIC/NCUA insured at one institution. For example, a joint account is insured to $500,000. Payable on death accounts are insured to $250,000 for each beneficiary. For example, 2 kids that are named as a beneficiary that is another $500,000 that can be insured. Talk to a knowledgeable employee at the bank or credit union and they should be able to instruct you how to structure the ownership of the account so that all the funds are federally insured

 

[ERhoosier]

Even with a "fee only" planner, one still needs to be VERY careful to examine one's specific investments. A close relative of mine uses a "fee only" advisor (annual % of portfolio value) who claims very low fees. But then steers investments rather exclusively to HI-LOAD mutual funds so FA's TOTAL fees (with those fund sales commissions) are really quite high.


IMHO- Many, MANY rip-off artists in the FA industry.

 

[Pineapple13]

Could use a little more explanation about portfolio management

I was a Financial Advisor for 25+ years at firms like Schwab, Merrill and Fidelity. Do yourself a favor, if you really need hand holding and portfolio management, use Vanguard PAS or Schwab Intelligent Portfolios Premium.

Everything else is a rip off.

Can you (and everyone else) please elaborate? I know very little about investing and I'm having a hard time motivating myself to learn and feel confident in my decisions surrounding a large sum of money that I need for future financial security. I see it said a lot in this forum that I can manage on my own just as well and it is a rip off to do anything else. But I don't know why an investment advisor is not a wise decision. Can you all take some time to explain? Doesn't an advisor keep their client happy and make more money over time by growing a portfolio and protecting against market downturns? I just don't know if I could do as well as someone who's job it is every day to focus on the market. Really looking forward to learning more from you all!

 

[OldShooter]

Simple question: Are you a fiducary? If no, run away.

 

[OldShooter]

... Doesn't an advisor keep their client happy and make more money over time by growing a portfolio and protecting against market downturns? I just don't know if I could do as well as someone who's job it is every day to focus on the market. ...

Please read this book:

"The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)

Bill will explain to you why the answer to your question is "No." He will also explain why successful investing is easy and focusing every day on the market is not only unnecessary but hazardous to your wealth.

Bill is very laid back; no hard topics. He even gives you a recipe for pumpkin pie.

 

[SumDay]

I came here asking this same question a decade ago. I was stupidly about to put it in an annuity, and someone stopped me. (THANK YOU!)

It was recommended to us to check out https://www.napfa.org/

We found a great one that we both clicked with (she's all business) and have seen her 5 or 6 times over the years.

Good luck, and I hope you get as lucky as we did. I've read some real horror stories.

 

[Kayzmum]

OP, this site can provide you with a lot of knowledge. The focus is on index fund investing. Keep the costs low, keep the portfolio simple and buy and hold.

https://www.bogleheads.org/forum/index.php

Thanks for your reply, Helen! I'm going to study everything mentioned here before I actually make any decisions. I really appreciate everyone's help!!

 

[HarryHawk]

Can you (and everyone else) please elaborate? I know very little about investing and I'm having a hard time motivating myself to learn and feel confident in my decisions surrounding a large sum of money that I need for future financial security. I see it said a lot in this forum that I can manage on my own just as well and it is a rip off to do anything else. But I don't know why an investment advisor is not a wise decision. Can you all take some time to explain? Doesn't an advisor keep their client happy and make more money over time by growing a portfolio and protecting against market downturns? I just don't know if I could do as well as someone who's job it is every day to focus on the market. Really looking forward to learning more from you all!

It seems like some folks feel that the way to go is to buy and hold a couple broadly diverse funds. I did that for a long time and it mostly worked ok. If that is your investment model, I agree that there is no need for an Advisor.

Fourteen years ago I established a relationship with an advisor. I pay a percentage for their services, but I feel they provide a better return then buying and holding the broad market. I have nothing but good to say about my advisor, they earn the money I pay for their services. They actively manage my assets, and it may not be a model for everyone.

I think advisors are like car mechanics, there are good ones, fair ones, and not so good ones. I am very happy with mine, but I am sure there are alot of folks who have had very bad experiences as well. It is possible that there are more bad ones than good, I don't know. I certainly wouldn't go in cold if you decided to talk to some advisors. I would talk to people I personally know and trust and get a personal reference.

Seems most wealth folks use advisors, many didn't get wealth by making bad business decisions.

 

[travelover]

Can you (and everyone else) please elaborate? I know very little about investing and I'm having a hard time motivating myself to learn and feel confident in my decisions surrounding a large sum of money that I need for future financial security. I see it said a lot in this forum that I can manage on my own just as well and it is a rip off to do anything else. But I don't know why an investment advisor is not a wise decision. Can you all take some time to explain? Doesn't an advisor keep their client happy and make more money over time by growing a portfolio and protecting against market downturns? I just don't know if I could do as well as someone who's job it is every day to focus on the market. Really looking forward to learning more from you all!

This is an important question, but I'd suggest that you start your own thread so you'll get good answers directed to your particular situation. When you try to tag along on someone else's thread, people end up mixing up you and the original poster and you don't get the help you deserve.

 

[Badger]

I was a Financial Advisor for 25+ years at firms like Schwab, Merrill and Fidelity. Do yourself a favor, if you really need hand holding and portfolio management, use Vanguard PAS or Schwab Intelligent Portfolios Premium.

Everything else is a rip off.

I can appreciate those with more experience in money matters than I (and there are many here). I also understand that there are individuals in any company that have integrity. However, 20+ years ago when I was a few years into learning how to manage our investments and my wife had started a new job with a 403b she went to Merrill (no other choices other than annuities). Fortunately I had just enough knowledge to know how "churning" worked and that the ML rep was trying to convince her to let him invest and reinvest her retirement money in various load funds that could have considerably reduced her 403b by the time she retired.

I put Merrill right up there with Edward Jones as places to avoid like the plague is coming. Instead I had the money put into a MM account once I found I could regularly move it to Vanguard.

I would agree with talking to Fidelity, Vanguard, and Schwab once you learn enough so you understand what the reps are saying or at least to know what questions to ask for clarification. In the mean time even having it in a MM account or CD for 6 months while you learn the basics is a good thing. As others have said by that time you may not need them.


Cheers!

 

[JeKa]

Looking for a new financial advisor. I'm a complete newbie but have a very recently acquired large sum of money (at least it is to me) to invest. I was checking out NerdWallet. I thought all Fiduciary advisors were fee based only, not a percentage. I see Vanguard is 0.3%.



https://www.nerdwallet.com/best/investing/financial-advisors

If you decide on Vanguard, you have several options. For 680K you don't have to start with a paid advisor.

Investors with $500,000 to $1 million*
You're a Voyager Select client at Vanguard, which offers you a team of experienced investment professionals and additional discounts on brokerage trades.

Your Voyager Select® benefits include:

A team of experienced investment professionals who will act as your guide to all we have to offer.

They can answer your questions, make transactions, and help you learn about all of the products and services available to you.

Access to ongoing advice and portfolio oversight from a Certified Financial Planner™ (CFP®) professional through Vanguard Personal Advisor Services (for a low fee).
No account service fees on most account types.**

 

[JeKa]

Confusion reigns! In the industry, "fee-based" means that the advisor does not get paid commissions on what he/she sells. The typical "registered representative" of a brokerage house gets sales commissions and is not a fiduciary. "Fee-based" can either be AUM fees or an advisor (rare) who charges by the hour, by the project, or sells himself as a subscription service with a periodic fixed fee.

Don't feel bad. This topic is the subject of frequent confusion here too.

But, ..., but, ... but, don't worry about hiring an advisor right away. The joke around here is that by the time you know enough to select an advisor you don't need one any more. Start here:

"If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)


"The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)


"The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365


"Winning the Loser's Game" by Charles Ellis https://www.amazon.com/Winning-Losers-Game-Strategies-Successful-dp-1264258461/dp/1264258461 (latest edition, May 2021)
​

Also, your first step with any prospective advisor relationship is here: https://brokercheck.finra.org/

Welcome!

X2

 

[RetiredAt49]

While I personally feel that I don’t need external help with investments, my spouse is adamant that the 1% we pay for one of the top Wealth Management Companies is worth it to her. She’d rather spend time playing during retirement (and she knows I tend to research and fret over things) so for now turned over all brokerage and retirement accounts to them.

 

[Kayzmum]

Confusion reigns! In the industry, "fee-based" means that the advisor does not get paid commissions on what he/she sells. The typical "registered representative" of a brokerage house gets sales commissions and is not a fiduciary. "Fee-based" can either be AUM fees or an advisor (rare) who charges by the hour, by the project, or sells himself as a subscription service with a periodic fixed fee.

Don't feel bad. This topic is the subject of frequent confusion here too.

But, ..., but, ... but, don't worry about hiring an advisor right away. The joke around here is that by the time you know enough to select an advisor you don't need one any more. Start here:

"If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)


"The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)


"The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365


"Winning the Loser's Game" by Charles Ellis https://www.amazon.com/Winning-Losers-Game-Strategies-Successful-dp-1264258461/dp/1264258461 (latest edition, May 2021)
​

Also, your first step with any prospective advisor relationship is here: https://brokercheck.finra.org/

OldShooter, I just have one more question -- Is there any particular order I should start this endeavor? Should I read and study in the order you have everything listed here? Thanks again for all your help!

 

[Dtail]

While I personally feel that I don’t need external help with investments, my spouse is adamant that the 1% we pay for one of the top Wealth Management Companies is worth it to her. She’d rather spend time playing during retirement (and she knows I tend to research and fret over things) so for now turned over all brokerage and retirement accounts to them.

Happy wife... but it would be interesting if we had a pool on the number of hours a year that the DIY folks here spend time on their portfolios, particularly the ones who only trade for rebalancing. Take the 1% fee and divide that by the hours spent.