How to find and interview my new Advisor ?

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confusedinvestor
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How to find and interview my new Advisor ?

Postby confusedinvestor » Mon Mar 20, 2017 10:16 am

Folks, What questions should I ask my new Advisor before signing up? I am not a DIY guy, I'd pay very small fee. Are there any "other" questions I should ask ? Please help advise...I'll post my list with these answer after few days.

0. If you are trying to sell me products like portfolio-managment for 1% or commissions or insurance product, let's end this call NOW!!!

1. Are you a fiduciary in heart and in writing ?

2. Do you have CFP ? additionally, CFA or CPA ? How many clients do you have now? Your AUM ? DFA Fund access ?

3. What is your investment philosophy ? Passive-index (BogleHead), Passtive-Tactical, Active-Meat-Time-Market?

4. Do you offer hourly advise? Charge per hour? Minumum hours?

5. Do you offer 2nd opinion of self-created or other's plan ?

6. Do you have remote technologies to share screens with remote client ?

7. Do you offer comprehensive financial planning? What is your fee?

8. What software do you use for Planning? Goal based like MoneyGuidePro ? or CashFlow based like eMoney Advisors?

9. What is your hourly fees for yearly retainer reviews ?

10. Who are your preferred brokerage? Who are you preferred custodians?

11. How you share your cell phone with clients for emergency $ matters?

12. Do you like Technology? Robo (Betterment or WealthFront) ? Robo-Human ( Vanguards VPS or Schwab-Intelligent)

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cheese_breath
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Re: How to find and interview my new Advisor ?

Postby cheese_breath » Mon Mar 20, 2017 10:30 am

You say you're not a DIY guy, and yet the research you'll need to do in order to select a good advisor is probably more than you'd need to set up a basic 3 fund portfolio using index funds.
The surest way to know the future is when it becomes the past.

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nedsaid
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Re: How to find and interview my new Advisor ?

Postby nedsaid » Mon Mar 20, 2017 10:32 am

If you want portfolio management, you might consider going to the robots. I am a Fidelity customer and have looked into their Fidelity Go service and have liked what I have seen. A firm like Wealthfront would likely do a good job for you. My best guess is that you might find actual human beings to provide portfolio management for 0.50% a year if you have a large portfolio. The industry standard was 1.00% a year for many years. Vanguard Advisory Service charges 0.30% a year but I don't know how much help they will give you beyond portfolio management.

Unfortunately, the comprehensive financial advice that you seek does not come cheap. What I mean by that is help with things like insurance, taxes, estate planning in addition to portfolio management. A "small fee" just isn't going to get you what you need. Probably your best bet is to pay by the hour. Be prepared to pay $150 to $400 an hour for advice.
A fool and his money are good for business.

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flamesabers
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Re: How to find and interview my new Advisor ?

Postby flamesabers » Mon Mar 20, 2017 10:41 am

OP,

I'm in agreement with cheese_breath. Even if you find the ideal adviser who would only charge you a flat fee ( as opposed to putting your money in load funds with high expense ratios), you'll still have to tell your adviser information such as your asset allocation and how long you intend to invest the money for. While the adviser might be able to offer useful advice such as talking you out of doing an impulsive fund transaction, your fellow Bogleheads here can do the same at no charge. :wink:

Also, I think another important consideration is nobody will care about your money as much as you do.

confusedinvestor
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Re: How to find and interview my new Advisor ?

Postby confusedinvestor » Mon Mar 20, 2017 1:37 pm

I called Fidelity Go but they charge 30 bos with no Human touch, I am tempted to sign up with Schwab Intelligent with 28 bps with CFP access. I still looking for a local face-2-face hourly. What I am finding out now that my only options are folks here in BogleHeads vs anyone on the market or local.


nedsaid wrote:If you want portfolio management, you might consider going to the robots. I am a Fidelity customer and have looked into their Fidelity Go service and have liked what I have seen. A firm like Wealthfront would likely do a good job for you. .
.

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InvestorNewb
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Re: How to find and interview my new Advisor ?

Postby InvestorNewb » Mon Mar 20, 2017 1:39 pm

cheese_breath wrote:You say you're not a DIY guy, and yet the research you'll need to do in order to select a good advisor is probably more than you'd need to set up a basic 3 fund portfolio using index funds.

+1
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

DTSC
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Re: How to find and interview my new Advisor ?

Postby DTSC » Mon Mar 20, 2017 1:40 pm

How to find your new advisor?

Look in the mirror!

mortfree
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Re: How to find and interview my new Advisor ?

Postby mortfree » Mon Mar 20, 2017 1:44 pm

An advisor, such as the one you are seeking, does not exist.

You will be much happier managing your own money.

You can get the best, free advice here.

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nedsaid
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Re: How to find and interview my new Advisor ?

Postby nedsaid » Mon Mar 20, 2017 1:58 pm

confusedinvestor wrote:I called Fidelity Go but they charge 30 bos with no Human touch, I am tempted to sign up with Schwab Intelligent with 28 bps with CFP access. I still looking for a local face-2-face hourly. What I am finding out now that my only options are folks here in BogleHeads vs anyone on the market or local.


nedsaid wrote:If you want portfolio management, you might consider going to the robots. I am a Fidelity customer and have looked into their Fidelity Go service and have liked what I have seen. A firm like Wealthfront would likely do a good job for you. .
.


I liked Fidelity Go because the fees include the expense ratios of the index funds they use and thus are a bit cheaper than Vanguard. If you can get access to a human for 28 basis points (0.28%), I would sure think about it.

The thing is, you have to figure that whoever you go to has to make a buck for themselves. My guess is that with Schwab you would get about 2 hours with a financial planner. My further guess is that beyond a certain point you would pay an hourly fee.

Bogleheads are pretty frugal folks and we hate to pay for financial advice. But sometimes you have to pay up for what you really want. It is difficult to go into too much detail here on an anonymous forum. One key detail can change the advice that is given. Pretty much all we can do here is inform you enough to the point where you can make your own decisions. We can do our best to steer you in the right direction. Pretty much the advice I give is broad. Rarely do I get myself enmeshed in the details of someone else's financial life. I have seen a few very lengthy threads where the original poster tells us all the details of their financial life and people chime in with very detailed advice. But that also takes time.

My guess is that advice paid for by the hour is the way to go.
A fool and his money are good for business.

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AndrewXnn
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Re: How to find and interview my new Advisor ?

Postby AndrewXnn » Mon Mar 20, 2017 2:24 pm

Those are good questions to ask.

The only one I would add would be concerning actual performance.

Do they have audited results available?

If No; that's bad and I'd consider that a non-starter.
If Yes, then are those results after fees, better than a standard Index?

The S&P 500 is the primary index I'm thinking of.
The second is BBgBarc US Agg Bond TR USD.

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nedsaid
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Re: How to find and interview my new Advisor ?

Postby nedsaid » Mon Mar 20, 2017 3:52 pm

A good alternative to an advisor managed portfolio would be a Target Risk Fund at a mutual fund company. These come in Aggressive, Moderate, and Conservative flavors. Fund companies that offer these will have 3-5 such funds. Just pick the risk level you want. This way you get just one layer of fees, the expenses and the management fees for the fund itself. It is likely that if you paid an advisor, you would get a similar portfolio anyways. This is one criticism of the Vanguard Advisory Service, that their advice is similar to the off the shelf funds you could purchase without the advisory fee.
A fool and his money are good for business.

confusedinvestor
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Re: How to find and interview my new Advisor ?

Postby confusedinvestor » Tue Mar 21, 2017 12:17 am

thanks everyone.
I had a good CFP/Advisor call with Schwab today (New Intelligent Advise). They gave me a plan online which uses MoneyGuidePro. I've another call this thursday for my followup financial plan questions

New Intelligent advise has 28 bps, 25K mim + 05-23 bps ETF ER - so yes, it could be 40 bps max vs Fdelity Go 30 bps (mgmt+ER) but Schwab has unlimited CFP calls. I am looking on local San Diego market 2 hour max fee-only-hourly advisor for 2nd opinion on Schwab online plan by MoneyGuidePro. May be I should fill our portfolio questions for this forum review?

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nedsaid
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Re: How to find and interview my new Advisor ?

Postby nedsaid » Tue Mar 21, 2017 8:34 am

As you continue through the process of interviewing advisors, you will learn how the process works. I had portfolio reviews performed by Ameriprise, my mutual fund company, my independent broker, and oddly enough my insurance company. Each time I learned something. My insurance company did a very good job and made sensible suggestions like adding more small-cap stocks.

It sounds like Schwab is the closest so far to what you are seeking. I like the combination of real life humans and robots. The price sounds about right.
A fool and his money are good for business.

confusedinvestor
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Re: How to find and interview my new Advisor ?

Postby confusedinvestor » Tue Mar 21, 2017 10:34 pm

Thank you NedSaid. Coming from you means a lot. Yes, I am learning a lot when talking with each advisor during 'free' consultation but I feel like I should first complete reading this wiki.

nedsaid wrote:Each time I learned something. My insurance company did a very good job and made sensible suggestions like adding more small-cap stocks.


Every Advisor I talk to is CFP and charging $3000 for a plan and/or 1% with AUM and they are all asking me why and how Schwab Intelligent Advise is doing this for 28 bps on 25K which is $75/year with CFPs with deep knowledge and no upsells pitches...Schwab portfolio has ER of 16 bps cheaper than Vanguard VPS ER....

nedsaid wrote:It sounds like Schwab is the closest so far to what you are seeking. I like the combination of real life humans and robots. The price sounds about right.

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nedsaid
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Re: How to find and interview my new Advisor ?

Postby nedsaid » Wed Mar 22, 2017 8:15 pm

confusedinvestor wrote:Thank you NedSaid. Coming from you means a lot. Yes, I am learning a lot when talking with each advisor during 'free' consultation but I feel like I should first complete reading this wiki.

nedsaid wrote:Each time I learned something. My insurance company did a very good job and made sensible suggestions like adding more small-cap stocks.


Every Advisor I talk to is CFP and charging $3000 for a plan and/or 1% with AUM and they are all asking me why and how Schwab Intelligent Advise is doing this for 28 bps on 25K which is $75/year with CFPs with deep knowledge and no upsells pitches...Schwab portfolio has ER of 16 bps cheaper than Vanguard VPS ER....

nedsaid wrote:It sounds like Schwab is the closest so far to what you are seeking. I like the combination of real life humans and robots. The price sounds about right.


I paid $750 a year through Ameriprise but the reason they do that is that they hope you will invest with them and buy their insurance products. They did a comprehensive job but of course their advice was not 100% objective. You get some sales pitch mixed in. I never invested with them, just visited with their planner 3-4 times a year. So counting prep time, you are paying $150-$250 an hour for their time. They talked about insurance, long term care, estate planning, etc.

If a Certified Financial Planner puts together a truly comprehensive plan for you, $3,000 probably isn't a bad price. You are paying for about 10 hours of somebody's time. It takes time to get all that input into their software and they have some prep work. They probably will meet with you 2-3 or 3-4 times for that price.

You also have to realize that a person working for a larger firm has to generate probably 2 1/2 to 3 times their compensation in revenue for the firm. They have to support the headquarters, support staff, etc. A mom and pop shop would have lower overhead and could charge less.

Schwab is doing this because they want all your investable assets. There is a certain critical mass they have to have to make it all work. If customers limit the CFP contact to the two visits and maybe a couple phone calls a year, the model might work. If customers are too demanding and expect constant attention, Schwab at some point would have to discontinue the program. In other words, you have to be a good client too, someone they can actually make a buck off of. It might be that Schwab is doing this as a loss leader to bring in assets.
A fool and his money are good for business.

carolinaman
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Re: How to find and interview my new Advisor ?

Postby carolinaman » Thu Mar 23, 2017 7:18 am

confusedinvestor wrote:Folks, What questions should I ask my new Advisor before signing up? I am not a DIY guy, I'd pay very small fee. Are there any "other" questions I should ask ? Please help advise...I'll post my list with these answer after few days.


7. Do you offer comprehensive financial planning? What is your fee?



I would suggest that you get the advisor to describe to you what their comprehensive plan will include in some detail. Their definition of comprehensive may be different than yours.

Based upon your questions I believe a fee only advisor is best for you. He/she could help you setup a plan and you could manage it, review it with them annually or as needed.


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