Anyone work with a financial planner?

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CLKeenan

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Jun 24, 2006
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Lots of threads about tax accountants, but does anyone work with a financial planner? I have almost too most liquidity and looking for guidance (from someone other than a WF member, no offense guys) on where to put it.

Positive experience? Negative experience? What kind of questions do you ask when interviewing? How important is it for them to be local? Do you work with an agent at a big firm? Any firms to stay away from?
 


I worked for a UBS financial advisor in New York, named Tracy Schusterman. She was a pretty big deal in New York.

From my experience, as I worked pretty damn close with her and got to see all her books, it is good and bad.

Bad in the sense that they really don't do that much, the strategies she chooses are ones you can get from books like The Wealthy Barber and Rich Dad, Poor Dad.

However, if you really don't care to read that stuff, then they are useful. Basically, when you meet them, they decide how on risky you want to be then, they split your portfolio up into dividends, bonds, and other investments.

For example, they had a 70 year old client who had about 30 million under management. He personally didn't care what they did with the money, all he wanted was to have 30K monthly to spend and see the account grow.

They also allow you to get a piece of some pretty big mutual funds and hedge funds that aren't traded with the public.

If you want more info, just let me know. I can probably also get the various investment strategies they used.
 
CLKeenan said:
What kind of questions do you ask when interviewing? How important is it for them to be local? Do you work with an agent at a big firm? Any firms to stay away from?
Click to expand...

Sorry. I didn't answer these questions.

I was present in one of the interviews and basically, they ask you want you are looking for, (i.e risk, ROI, and what not.)

As for being local, my FA only dealt with New York clients and I remembered asking if she took out of state clients, which she said no due to taxes and a bunch of other shit.

As for firms to stay away from, I don't know. UBS got it pretty hard in the previous years for a bunch of scandals, unauthorized trading, lunches to recruit clients and what not but basically it's your financial planner you need to be cautious about.
 
If you aren't gonna be speculative and just want you shit to grow. I'd stick with a index funds & go the boglehead route.

Bogleheads Investing Advice and Info

[ame=http://www.amazon.com/gp/product/0470067365?ie=UTF8&tag=diehardsorg-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0470067365]Amazon.com: The Bogleheads' Guide to Investing (9780470067369): Taylor Larimore, Mel Lindauer, Michael LeBoeuf, John C. Bogle: Books[/ame]

Most FP's will charge .5-2% of your portfolio plus have you in funds with ridiculous expense fees with high turnover. It will eat your fucking growth.
 
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Thanks for the good info jfizzle. Much appreciated. The commission based advisors scare me in the sense that its tough to know their true intentions. Are they just going to cycle through funds and create unnecessary fees for me?
 
CLKeenan said:
going to cycle through funds and create unnecessary fees for me?
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This.

With most FP's you'll get double dipped too. 1% AMF and 1-2% MF fees that you won't even see cus its build into the funds dividends while earning the FP a nice hefty commission... which makes it an easy sell for the FP's.

You are not actually handing them cash... so it doesn't feel like you are buying anything. They just take a % of your growth. It may seem like a small sum but overtime that small some compounding will be a nice chunk.

If you want solid non-biased advice with no conflict of interest then the only way to go is a Fee-Only advisor. They don't make $$$ from anything but their hourly rate form you. They won't sell you crap funds or put you in high exp. ratio MF's to earn nice commissions.

The Best Way to Pay for Advice: The Advantages of a Fee-Only Financial Advisor
 
Exactly. That's what I'm afraid of. Fees on fees on fees.

I've self-managed my own Roth IRA, SEP IRA, etc. before. Current Roth IRA is up 15%. Nothing amazing but better than the 6-7% growth (before fee) estimates I was told for a 'moderate plus' portfolio. I basically just looked at Kiplinger's 2011 moderate/aggressive portfolio and selected some of the ETFs that made sense to me.
 
As for fees, I'm not a 100% sure how she did it. I know she charged per trade and took a cut out of that. She might have taken an annual payment as well. But personally, from what I found at least, they are mostly there to act as a "parent." Or at least that is what my FA said. For example the same guy who wanted 30K a month, when she invited me into a meeting with him, I was debriefed after that most of conversation revolved around his family and how life was. She precisely told me, that it is unrealistic to grow his portfolio substantially and still give him 30K a month. Obviously she doesn't say that to him, but rather avoids it by talking abstractly.

Anyways point being, you don't necessarily need one unless, you have cash flying all over and not sure what the fuck to do. As for fees, they all compete for the most money under management so there fees are pretty competitive, plus they won't look to screw you over as you can shift FA's or just change your portfolio strategy.

All they really want to do, at least in New York, is either work at home in New York or go to the Hamptons. The really legit guys, like another FA in the office who has a billion dollars under management with less than 10 clients, are the fucking shit but you need some serious cash to play with those kind of FA's.
 
We've got an investment planner and I'm pretty satisfied with him so far. We just started with him not too long ago though. With us, he's also putting us in touch with estate attorneys, and setting us up with life insurance and health insurance for our corp. One thing that I like about him is that he's pretty good at making sure we do what we are supposed to, like filling out forms for insurances, and reminding us of shit we are just way too busy to remember to do. No upfront fees either.

After watching all these shows on TV like American Greed, where there are so many scammers out there, it's hard to know who to trust. Our planner was referred to us by another friend who's been dealing with him for 10+ years, so that helps. But you really need to be careful who you give your money to. (sounds easy, but we all know how slick marketing can be)
 
For funds Standard Life Investments are fantastic. They do worldwide trading (big UK-based investment company) and have several award winning investment funds (check out their small-cap). I worked with these guys for a while, really smart people and won't fuck you over.
 
If you guys end up deciding to use any Value-Cost-Averaging in your long term strategy I'd highly suggest getting set up at TD Ameritrade because they have commission-free trades for over 100 top ETFs. Otherwise value-cost averaging can end up with you paying quite a bit in commission fees over time.

https://www.tdameritrade.com/trade/etflist.html

I recently switched from Etrade to TD Ameritrade because TDA offers better commission-free ETFs.
 
Ive talked to several estate planners ( which I am sure are close enough )...

Some things I walked away with:
1. 12 months savings in a money market Fund or CD

2. Have a will in place

3. a beautiful simple idea to have 25% of your savings each in investments that do well during boom (stocks), bust (bonds), inflation (gold), deflation (cash). Then just rebalance when they get too far out of 25% each. No predicting the future. No worrying about the news. Just 25% each and rebalance.

4. - Split the 25% stock-market portion among three mutual funds.
- For the bond portion, you don't want to have to monitor credit risk, so buy only U.S. Treasury bonds. So long as the U.S. government has the ability to tax people or print money to pay its bills, there is virtually no credit risk.
- Put the 25% in the Treasury bond issue that currently has the longest time until it matures. That will be close to 30 years. Ten years later, the bond will have only 20 years to maturity; at that time replace it with a new 30-year bond.
- Buy bullion coins - coins whose only value is the gold bullion they contain. They sell for about 3-5% more per ounce than gold bullion. That means a one-ounce coin will sell for about $310-$315 if the price of gold is $300 an ounce.
- The cash portion should be kept in a money market fund investing only in short-term U.S. Treasury securities, so that you don't have to evaluate credit risk. These securities are safer than bank accounts and other debt instruments. If your cash budget is large enough, divide your holdings between two or three funds - for further protection against the unthinkable.

5. By buying and holding the entire market through a passively managed or indexed mutual fund, you guarantee that you will own all of the winning companies and thus get all of the market return. True, you will own all of the losers as well, but that is not as important; the most that can vanish with any one stock is 100 percent of its purchase value, whereas the winners can easily make 1,000 percent, and exceptionally 10,000 percent, inside of a decade or two. Miss just one or two of these winning stocks, and your entire portfolio will suffer.

6. Do not invest with any mutual fund family that is owned by a publicly traded parent company.

7. Fidelity offers very low-priced, passively managed funds. They are so low-priced, in fact, that they serve as loss leaders, designed to get you into the store to buy its more expensive funds. As long as you keep to the discount rack, you should do well there.

8. The commission and spread costs incurred by ETFs will quickly erode their minuscule expense advantage.

9. I do not trust most of the ETF providers to support these products over the very long term; all except Vanguard are publicly traded entities.

10. It is reasonable to expect your portfolio to achieve annualized returns from 7-11% over the long term. Attempting to achieve returns higher than 11% involves speculating.

^^ some of this I took out of my enlightened post at:
http://www.wickedfire.com/enlighten...oks-business-advice-marketing-money-help.html
 
Awesome post. Thanks for writing that up. Could you expand on your negative ETF sentiment more? I've always been under the impression that ETFs are better than mutual funds because they have much lower fees/expenses. I currently have my self-managed Roth IRA invested soley in a spread of ETFs:

IVV
IVE
IWC
EFA
VSS
VWO
BND
BWX
VNQ

I also still have cash just sitting in my Roth as well waiting to be invested.
 
CLKeenan said:
Lots of threads about tax accountants, but does anyone work with a financial planner? I have almost too most liquidity and looking for guidance (from someone other than a WF member, no offense guys) on where to put it.

Positive experience? Negative experience? What kind of questions do you ask when interviewing? How important is it for them to be local? Do you work with an agent at a big firm? Any firms to stay away from?
Click to expand...

If you have too much cash, then why not keep more cash in your business?

From my understanding, with a properly setup business you should be able to retain money in your business without being double taxed (at least in the sense of paying more than if you distributed the cash instead of holding onto it).

This also means you'll have up to 35% more capital to invest.

What got you the money in the first place? Probably your business. If so, sounds that's the most profitable investment you can make.

Sure, there's value in diversifying your wealth, but I don't think that matters until you have >7 figures of wealth. When you get to that point, I'm sure you'll know how to diversify.. at least much better than any advice on this forum.
 
CLKeenan said:
Thanks for the good info jfizzle. Much appreciated. The commission based advisors scare me in the sense that its tough to know their true intentions. Are they just going to cycle through funds and create unnecessary fees for me?
Click to expand...

I like Clark Howard alot even though he is ultra conservative for my taste and he mentions that you always stay away from comission based advisors I agree with that, there are to many advisors that will churn just to get a commission.

Fee-only financial planners are in your best interest | www.clarkhoward.com

check it out. Hope that gives you some good insight.
 
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