Financial advisor for hire

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
ActionTransaction
Posts: 8
Joined: Thu May 18, 2017 7:22 am

Financial advisor for hire

Post by ActionTransaction » Wed Apr 25, 2018 10:03 pm

Hello all,

I am an active lurker, seeking some advise on "for fee" financial advisor. I am ultimately looking for someone to take a look at my entire financial picture and help develop a plan, advise on tax situations, review insurance products, review employer sponsored 401k funds, and develop a workable budget.

I know the bogle wisdom is I can figure all this out on my own, but I think there is real value having someone do a deep dive and provide a comprehensive plan that has goals I can work to achieve. I am not looking for active management.

I have asked around and my CPA gave a few recommendations.

What I'm struggling with is the fee structure. One advisor, and the one we are considering, has a yearly flat fee (in the thousands). This includes the development of the "plan", meetings and on-demand Q/A as needed. There is no contract, but and expectation is a multiyear commitment. I definitely see the value with the initial "plan" development, but moving forward I don't see the value in yearly advisement.

The planner we are considering, also sells insurance, but she made it clear there would be no pressure and can keep that aspect separate. I've read here that could be a red flag. Thoughts?

All of her clients are multi-year clients.

Is there value in seeking this service? Is it reasonable to think an advisor could streamline savings/investments enough to offset the yearly fee?

Any input is greatly appreciated!

KSActuary
Posts: 379
Joined: Fri Jan 13, 2012 10:53 pm

Re: Financial advisor for hire

Post by KSActuary » Wed Apr 25, 2018 10:08 pm

Sounds like you want a financial planner who will ultimately not have responsibility for day-to-day investment management responsibility. I have a difficult time thinking of ways for a financial planner to continue charging you after the initial plan is complete but offset this fee through savings or some other efficiencies. The big savings would come through better financial returns but it does not sound like you want this assistance. I guess if you have a difficult tax situation then some benefits may accrue from that in later years but that is for a CPA, not a financial planner.

User avatar
Rob5TCP
Posts: 3164
Joined: Tue Jun 05, 2007 7:34 pm
Location: New York, NY

Re: Financial advisor for hire

Post by Rob5TCP » Wed Apr 25, 2018 10:13 pm

There are advisors that charge a straight hourly rate. Alan Roth is one of them and he is well known on this board.
It's probably more expensive the first year, but the savings for falling years more than makes up for it.
Unless you have a small balance the 1% fee AUM, over the years really become exorbitant.

I believe Garrett offers an hourly option - which might be your best option (I have no connection to them,
nor have I used them). Worth looking into.

https://www.garrettplanningnetwork.com/about/faqs

123
Posts: 3822
Joined: Fri Oct 12, 2012 3:55 pm

Re: Financial advisor for hire

Post by 123 » Wed Apr 25, 2018 10:18 pm

One way to decide if you can afford a financial adviser is to subtract your average monthly expenses from your average monthly income and decide how much of that you want to hand over to the financial adviser for advice. Generally you will have more to contribute toward your financial goals if you do not use an adviser. But some people do feel better when they pay for a financial adviser (at least for a little while anyway).
The closest helping hand is at the end of your own arm.

amateurnovice
Posts: 167
Joined: Wed Mar 11, 2015 1:56 pm

Re: Financial advisor for hire

Post by amateurnovice » Wed Apr 25, 2018 10:28 pm

Insurance products are simply additional ways for them to make money. If you don't need it, don't buy it. If you're interested, take a brochure and read up on how it will benefit you. It's only a red flag if they pitch it in front of their investment advice or make it a priority for your portfolio and you feel otherwise.

It's sometimes good to have a planner for face-to-face interactions and if you want that security in case something were to happen to you for your children or spouse, someone for them to contact instead of calling an 800 number.

An RIA firm can either manage your portfolio for you or provide a plan. The ongoing advice would be better served through asset management and not an ongoing fee for reviewing your finances, but that can be expensive at 2% per year on top of custodian's fees and fund fees.

I would not pay for a financial plan unless you have assets on top of assets in several kinds of accounts and are in need of lengthy planning for college educations, retirement, healthcare, and estate.

Regardless of which way you choose to go, look on BrokerCheck for any red flags such as regulatory actions or complaints and check with your state's securities division to make sure they are currently registered either with that jurisdiction or the SEC.

confusedinvestor
Posts: 419
Joined: Thu Mar 15, 2012 11:04 am

Re: Financial advisor for hire

Post by confusedinvestor » Thu Apr 26, 2018 12:56 am


User avatar
Sandtrap
Posts: 5363
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Financial advisor for hire

Post by Sandtrap » Thu Apr 26, 2018 1:20 am

Perhaps, if you are inclined, you might want to take this for a test drive before you take that "deep dive".

Persona Portfolio Review Request Format:
https://www.bogleheads.org/forum/viewt ... =1&t=6212

j

JoeRetire
Posts: 1647
Joined: Tue Jan 16, 2018 2:44 pm

Re: Financial advisor for hire

Post by JoeRetire » Thu Apr 26, 2018 6:39 am

ActionTransaction wrote:
Wed Apr 25, 2018 10:03 pm
I am an active lurker, seeking some advise on "for fee" financial advisor. I am ultimately looking for someone to take a look at my entire financial picture and help develop a plan, advise on tax situations, review insurance products, review employer sponsored 401k funds, and develop a workable budget.

I know the bogle wisdom is I can figure all this out on my own, but I think there is real value having someone do a deep dive and provide a comprehensive plan that has goals I can work to achieve. I am not looking for active management.

Is there value in seeking this service? Is it reasonable to think an advisor could streamline savings/investments enough to offset the yearly fee?
It makes sense to ask for advice and help with an initial plan.
I'm not sure it makes sense to jump right in to a recurring, yearly fee structure yet.

I would start at https://www.napfa.org/find-an-advisor#tab=filters.
Search for someone in your area with an "Hourly" fee structure.
Interview a few, explaining what you are looking for and asking how much it will cost to create your plan. Then choose one.

You can always decide at a later date to extend the relationship, or not.
And you could always check in again at a future date if and when you need more clarification/advice.

Good luck.

carolinaman
Posts: 3289
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Financial advisor for hire

Post by carolinaman » Thu Apr 26, 2018 9:51 am

This financial adviser's offer does not sound like exactly what you want, but I may be mistaken. Do you want a comprehensive plan that you can manage or do you want ongoing assistance? I think the comprehensive plan by a "fee only" adviser is a great idea. I could see periodic reviews of your situation every few years but the ongoing assistance can get expensive. If you feel you need that then go for it but recognize the cost and possible diminished value for the ongoing assistance/management.

I think many Bogleheads support the idea of developing a comprehensive plan but probably not the ongoing assistance and fees. I would also be very leery of the insurance products. It is really hard for someone to be objective when they are compensated, well I might add, for selling a product.

ExitStageLeft
Posts: 981
Joined: Sat Jan 20, 2018 4:02 pm

Re: Financial advisor for hire

Post by ExitStageLeft » Thu Apr 26, 2018 2:46 pm

I second Sandtrap's suggestion. Do a dry run with the Boglehad crew first, then if you feel the need for a professional to review your situation you will have done the legwork already. An advisor A planner will need all the information that is in the Portfolio Review format anyhow, so take BH for a spin first. If you don't like the forum advice, you can get back every penny you paid for it. :D
Last edited by ExitStageLeft on Thu Apr 26, 2018 3:02 pm, edited 1 time in total.

MotoTrojan
Posts: 2462
Joined: Wed Feb 01, 2017 8:39 pm

Re: Financial advisor for hire

Post by MotoTrojan » Thu Apr 26, 2018 2:55 pm

This forum was made for you. They’ll get you 95% of the way and then any open items can be the focus of your individual research. No need to pay for this.

bloom2708
Posts: 4907
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Financial advisor for hire

Post by bloom2708 » Thu Apr 26, 2018 3:03 pm

MotoTrojan wrote:
Thu Apr 26, 2018 2:55 pm
This forum was made for you. They’ll get you 95% of the way and then any open items can be the focus of your individual research. No need to pay for this.
+1

Ask questions here. Gain knowledge. Do it yourself. If you think it is too complicated you are probably doing it wrong.

Once you learn enough to understand what your advisor is recommending, you do not need the advisor. Chicken and egg problem.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

User avatar
celia
Posts: 8487
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Financial advisor for hire

Post by celia » Thu Apr 26, 2018 3:14 pm

ActionTransaction wrote:
Wed Apr 25, 2018 10:03 pm
What I'm struggling with is the fee structure. One advisor, and the one we are considering, has a yearly flat fee (in the thousands). This includes the development of the "plan", meetings and on-demand Q/A as needed. There is no contract, but and expectation is a multiyear commitment. I definitely see the value with the initial "plan" development, but moving forward I don't see the value in yearly advisement.
Did you make it clear you are looking for a one-time portfolio analysis and financial recommendation?

The planner we are considering, also sells insurance, but she made it clear there would be no pressure and can keep that aspect separate. I've read here that could be a red flag. Thoughts?
You will likely be offered annuities by an insurance agent.


Someone recently pointed out to me that if you see a specialist in any area (medical, legal, financial), the specialist will recommend that you go forward with their specialty recommendation because that's what they are most familiar with. If you didn't want their specialty service, why do ask them for their suggestion?

So you would likely do better with Bogleheads since you will get a range of opinions from us, and we will automatically also critique the other posts in the thread if we disagree with them. Some of us also have insurance experience, legal experience, tax preparation experience, asset allocation experience, retirement experience, .... Can any one advisor you see in person provide all that?

For what it's worth, here's my recommendation to you without even seeing your portfolio:
Have you estimated your income taxes from now until age 72, when SS, pension [if any], and RMDs have all kicked in? Before you retire, you need to see what your income and taxes and tax bracket is each year and make adjustments (Roth conversions) before age 70 if those RMDs, which increase each year, will push you into higher tax brackets. (I've never heard of a financial advisor suggesting that since they are, by definition, not yet retired and don't realize what could happen down the road. Some of us have been there and can help on this.)

User avatar
ruralavalon
Posts: 14079
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Financial advisor for hire

Post by ruralavalon » Thu Apr 26, 2018 3:24 pm

ActionTransaction wrote:
Wed Apr 25, 2018 10:03 pm
Hello all,

I am an active lurker, seeking some advise on "for fee" financial advisor. I am ultimately looking for someone to take a look at my entire financial picture and help develop a plan, advise on tax situations, review insurance products, review employer sponsored 401k funds, and develop a workable budget.

I know the bogle wisdom is I can figure all this out on my own, but I think there is real value having someone do a deep dive and provide a comprehensive plan that has goals I can work to achieve. I am not looking for active management.

I have asked around and my CPA gave a few recommendations.

What I'm struggling with is the fee structure. One advisor, and the one we are considering, has a yearly flat fee (in the thousands). This includes the development of the "plan", meetings and on-demand Q/A as needed. There is no contract, but and expectation is a multiyear commitment. I definitely see the value with the initial "plan" development, but moving forward I don't see the value in yearly advisement.

The planner we are considering, also sells insurance, but she made it clear there would be no pressure and can keep that aspect separate. I've read here that could be a red flag. Thoughts?

All of her clients are multi-year clients.

Is there value in seeking this service? Is it reasonable to think an advisor could streamline savings/investments enough to offset the yearly fee?

Any input is greatly appreciated!
We used a fee only planner to help us set up our portfolio, and since have managed it ourselves. I found that initial planning help to be very useful and reassuring, it was worthwhile for us. I would not use an investment manager, because I don't believe that they can add enough value to justify an annual fee, and I can manage for myself.

Here is a chapter from a free on-line book, which details how to select a planner -- Chapter 10 – On Your Own or Hire an Advisor. "The great paradox of using an advisor is that you must know some basics in order to evaluate the advice, and once you do, you also know enough to consider doing your own management. If you have gotten this far through the primer, you are already a more knowledgeable investor. "

Two links for finding an advisor:
http://www.napfa.org/consumer/index.asp
http://www.garrettplanningnetwork.com/

Harry Sit, a blogger who sometimes posts here, offers a service through his blog to scout for planners in your area. "Advice-Only Search and Screening".

In general see "Investment Planning".

Even if you decide to use a financial planner, I suggest that you read the Wiki and also post your questions here. Please see this for format: "Asking Portfolio Questions".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

retiredjg
Posts: 34177
Joined: Thu Jan 10, 2008 12:56 pm

Re: Financial advisor for hire

Post by retiredjg » Thu Apr 26, 2018 4:28 pm

I suggest these steps in this order.

In general see "Investment Planning".

Even if you decide to use a financial planner, I suggest that you read the Wiki and also post your questions here. Please see this for format: "Asking Portfolio Questions".

Harry Sit, a blogger who sometimes posts here, offers a service through his blog to scout for planners in your area. "Advice-Only Search and Screening".

Two links for finding an advisor:
http://www.napfa.org/consumer/index.asp
http://www.garrettplanningnetwork.com/

If you get to the 4th step, make sure you advise them while setting up the appointment that you are interested in advice for a 1 time fee. Some of the people on those networks mean "AUM" when they say "fee only".

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Financial advisor for hire

Post by dbr » Thu Apr 26, 2018 5:43 pm

retiredjg wrote:
Thu Apr 26, 2018 4:28 pm
I suggest these steps in this order.

In general see "Investment Planning".

Even if you decide to use a financial planner, I suggest that you read the Wiki and also post your questions here. Please see this for format: "Asking Portfolio Questions".

Harry Sit, a blogger who sometimes posts here, offers a service through his blog to scout for planners in your area. "Advice-Only Search and Screening".

Two links for finding an advisor:
http://www.napfa.org/consumer/index.asp
http://www.garrettplanningnetwork.com/

If you get to the 4th step, make sure you advise them while setting up the appointment that you are interested in advice for a 1 time fee. Some of the people on those networks mean "AUM" when they say "fee only".
Good advice. Getting down to fiduciary planner, not in the business of selling anything except competent advice in the interest of the customer, and fee for hour rather than fee for assets under management is a very small and narrow corner of the business. Good luck.

PS I know for sure that NAPFA is not a guarantee of avoiding AUM costs. It is good to be clear upfront.

Post Reply