Fee only advisor suggestion

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Joe5858
Posts: 10
Joined: Tue May 26, 2015 8:09 pm

Fee only advisor suggestion

Post by Joe5858 » Mon Aug 06, 2018 12:28 pm

I am looking for a suggestion of a reputable fee only advisor for portfolio review. Any suggestions of people you have worked with? Thanks

Jack FFR1846
Posts: 10812
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Fee only advisor suggestion

Post by Jack FFR1846 » Mon Aug 06, 2018 12:32 pm

Portfolio review?

viewtopic.php?f=1&t=6212

You won't get better value for your money anywhere else. Money back guaranty.
Bogle: Smart Beta is stupid

Counterpoint
Posts: 54
Joined: Sun Jun 05, 2016 1:42 pm

Re: Fee only advisor suggestion

Post by Counterpoint » Mon Aug 06, 2018 7:56 pm

I used this site to get 3 suggestions for advice-only financial advisors in my area (who charge by the hour, not based on AUM - Assets Under Management): https://adviceonlyfinancial.com

The site is run by Harry Sit, the author of The Finance Buff, who is also a respected BH poster.

I paid $200 for it, and it was well worth it - Harry was terrific in asking for what I wanted and in tailoring his database of advice-only advisors to my needs.

I agree that BH advice is great and costs nothing, but for a few hundred dollars spent after a couple of hours with the financial advisor, I had a completely personalized and comprehensive view of my full financial position with respect to investment and tax planning, insurance/risk management and an overview of our estate planning. (Our situation is simple - most people may need a little more time, but the most amount of time will only be for the initial consultation.) So worth it, and now I have someone I can consult with when my list of questions piles up, via a quick half hour phone call.

I also used a free consultation with a CFA/CFP from Vanguard's Personal Advisor Services as a result of the volume of assets we have with Vanguard, but it was nowhere near as good. The CFA/CFP was competent, but the scope of the review/advice was much more limited (to investments with Vanguard).

I think a good hourly fee-based financial planner is the way to go. For any reasonable amount of assets, it will be far less expensive than an annual fee based on AUM. And the advisor will not see your detailed questions as peripheral to their primary revenue source (as an AUM fee-based advisor could) - your questions are their revenue source so they would welcome them.

pkcrafter
Posts: 13747
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Fee only advisor suggestion

Post by pkcrafter » Mon Aug 06, 2018 11:00 pm

Joe, Harry Sit is good, and here is link to Garrett Financial Network, also good.

https://www.garrettplanningnetwork.com/about

Having posted this, your best first bet is posting your information here and seeing what the members recommend. It's usually a version of the 3-fund portfolio. Really all you need.

viewtopic.php?f=10&t=88005

Here's how to post information

viewtopic.php?f=1&t=6212


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

MikeG62
Posts: 2303
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Fee only advisor suggestion

Post by MikeG62 » Tue Aug 07, 2018 7:51 am

Counterpoint wrote:
Mon Aug 06, 2018 7:56 pm
I used this site to get 3 suggestions for advice-only financial advisors in my area (who charge by the hour, not based on AUM - Assets Under Management): https://adviceonlyfinancial.com

The site is run by Harry Sit, the author of The Finance Buff, who is also a respected BH poster.

I paid $200 for it, and it was well worth it - Harry was terrific in asking for what I wanted and in tailoring his database of advice-only advisors to my needs.

I agree that BH advice is great and costs nothing, but for a few hundred dollars spent after a couple of hours with the financial advisor, I had a completely personalized and comprehensive view of my full financial position with respect to investment and tax planning, insurance/risk management and an overview of our estate planning. (Our situation is simple - most people may need a little more time, but the most amount of time will only be for the initial consultation.) So worth it, and now I have someone I can consult with when my list of questions piles up, via a quick half hour phone call.

I also used a free consultation with a CFA/CFP from Vanguard's Personal Advisor Services as a result of the volume of assets we have with Vanguard, but it was nowhere near as good. The CFA/CFP was competent, but the scope of the review/advice was much more limited (to investments with Vanguard).

I think a good hourly fee-based financial planner is the way to go. For any reasonable amount of assets, it will be far less expensive than an annual fee based on AUM. And the advisor will not see your detailed questions as peripheral to their primary revenue source (as an AUM fee-based advisor could) - your questions are their revenue source so they would welcome them.
Counterpoint, what did you end up paying the advisor? How much time did you spend with him/her? Also, do you expect to meet with them again (if so how often) and what do you expect those future get together to cost?

Aside from the complete comprehensive view of your financial position (and assets) did he/she make recommendations on how and in what investment vehicles you should be investing?

I have a SIL that is going to need advice. I think this could be a good way to go for her. I’d be willing to attend the meeting(s) aling with her to further establish the advisors credibility and reasonableness of the advice - at least until she is comfortable with the relationship.
Real Knowledge Comes Only From Experience

User avatar
StuyPHD
Posts: 12
Joined: Tue Aug 07, 2018 8:30 am
Location: New York

Re: Fee only advisor suggestion

Post by StuyPHD » Tue Aug 07, 2018 8:39 am

I highly doubt your financial situation is of complexity to require a paid professional reputable fee advisor. As someone mentioned here, try to seek advice from folks on this forum. Rule number 1, don't pay fees you don't have to.
if plan B was any good it would be plan A

Counterpoint
Posts: 54
Joined: Sun Jun 05, 2016 1:42 pm

Re: Fee only advisor suggestion

Post by Counterpoint » Tue Aug 07, 2018 1:52 pm

First of all, I want to clarify that I’m not suggesting getting an advice-only FA instead of getting answers on the BH forum. If the OP is only looking for a simple portfolio review, or even answers to specific financial questions, BH is terrific and probably sufficient. But I’ve provided below situations where an advice-only FA can be very useful.

I also have to mention that I hate the normal AUM fee-based FAs - we had to extricate an elderly relative recently from the clutches of one such advisor. Harry Sit had also pointed out that one should avoid an hourly-fee based planner who also does AUM-based fees, since (s)he is likely to want to upsell you to their AUM model. He vets his FA recs so that they only provide advice on an hourly fee basis and have no AUM business in addition (not sure how the Garrett Financial Network works).

To answer MikeG62’s specific questions:

My FA was $250/hour.
We spent 2 hours with her. But we didn’t need investment or AA advice (although she did a quick review): I have a background in institutional finance, and our financial situation is comfortable enough that we don’t have to do retirement income forecasting (which would of course take a lot more time). So ours was more in the nature of a “financial health check up”. It also helped that I’d done a lot of prep for the meeting based on the questionnaire she sent us (and BH research!) and had a long list of questions that I sent to her in advance. She was extraordinarily efficient, and very generous to not charge us much extra for reviewing our material ahead of time (which her fee schedule allows her to do, as is the case for most FAs).

We’re planning to call her again next month to go through a list of a dozen additional questions that have come up (we also help with the financial affairs of other members of our extended family). It’ll probably take less than an hour to go through the issues, so another $250. I expect that we’ll do 1-2 hours each year going forward, based on changes in family circumstances or tax laws etc.

In my opinion there are many people for whom a FA is useful, even in conjunction with using BH:

(1) Maybe your financial situation is complex.

(2) Maybe MikeG62’s SIL does not have the time or inclination to search through BH to answer all her financial questions.

(3) You don’t know what you don’t know. You can only post questions on BH on the issues that you’ve thought about. For instance, we missed a couple of years of doing backdoor Roth IRAs because I wasn’t even aware of what that was when they were first allowed. Likewise a less-than-obvious way of using our state’s 529 plan. The savings from doing these alone would have paid for a FA many times over, if we’d had an ongoing relationship with an advice-only FA at that time. If you’re a power BH user you may know every issue that exists out there, but most mortals are not in that category.

(4) I have a reasonable degree of financial sophistication because of my work background, but what happens if I get hit by the proverbial truck tomorrow? Or even worse, if both my spouse and I get hit by that truck? In that case, we have told our adult kids (and have written it down) that they would contact our FA who would help them deal with how to invest the proceeds of life insurance and our assets, deal with inherited IRAs, etc. - at a time when they are grieving and stressed. We have already discussed with the FA our general principles on how to handle the assets: 3-fund philosophy with Vanguard index funds etc., and she’s completely on board, as are our kids. Of course, it’s ultimately up to our kids as to what to do and whether to use the FA - this is not a testamentary trust situation.

(5) Customizing to your complete financial situation: When we met with our FA, she had a check list of over 40 issues covering the various aspects of risk management, estate planning, retirement and investment planning, cash flow management and life event planning. We went through which were relevant to us and which not. An example: Did long-term care insurance make sense for us? Since the FA knew all the minute details of our financial and family situation (including income, assets, specific family responsibilities and circumstances) it took her no time to explain the aspects of the LTCI market most relevant to us, and to suggest that we should self-insure rather than buying LTCI (confirming our opinion). There’s no way I could have disclosed the level of personal information on BH in order to get truly customized advice on our LTCI needs - a really major decision.

(6) If you have time for internet research but you want to limit that time, a good way to do it in my opinion is to use a combination of internet resources (BH and the Kitces blogs are my favorites) and an advice-only FA. BH is great, but it’s also addicting. So use BH/Kitces to get you educated on the big picture issues (and perhaps to double-check the FA’s recs on major issues), and the FA can short-circuit the process of needing to search for all the angles, and to give you implementation advice.

(7) The FA adds structure and discipline to the whole process. For us, she forced us to articulate all our future objectives and defend the financial implications of achieving them. I’ll probably use her to provide some retirement planning forecast scenarios for my kids, since they are not that financially savvy and I want a FA to validate the advice I’m giving them (I’m willing to live with the mistakes I make for myself, but don’t want to impose my mistakes on others). For others, a FA may be important to stay the course and talk them off the ledge when the next market crash occurs.

The only regret I have is not doing this sooner. I’m certainly a big fan of rock-bottom costs and not paying unnecessary fees, whether to AUM-based FAs or to mutual fund companies. But being reluctant to pay an ongoing $250-500 pa to my FA for the benefits that I mentioned above, in my case would be penny wise and pound foolish.

MikeG62
Posts: 2303
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Fee only advisor suggestion

Post by MikeG62 » Tue Aug 07, 2018 7:09 pm

Counterpoint wrote:
Tue Aug 07, 2018 1:52 pm

...I’ve provided below situations where an advice-only FA can be very useful.

To answer MikeG62’s specific questions:

My FA was $250/hour.
We spent 2 hours with her. But we didn’t need investment or AA advice (although she did a quick review): I have a background in institutional finance, and our financial situation is comfortable enough that we don’t have to do retirement income forecasting (which would of course take a lot more time). So ours was more in the nature of a “financial health check up”. It also helped that I’d done a lot of prep for the meeting based on the questionnaire she sent us (and BH research!) and had a long list of questions that I sent to her in advance. She was extraordinarily efficient, and very generous to not charge us much extra for reviewing our material ahead of time (which her fee schedule allows her to do, as is the case for most FAs).

We’re planning to call her again next month to go through a list of a dozen additional questions that have come up (we also help with the financial affairs of other members of our extended family). It’ll probably take less than an hour to go through the issues, so another $250. I expect that we’ll do 1-2 hours each year going forward, based on changes in family circumstances or tax laws etc.
Thanks Counterpoint, appreciate the additional color. I will be crossing this bridge with my SIL within the next 6-9 months and this provides good additional food for thought.

I agree with everything you said in terms of the reasons why some people would benefit from a fee-only FA. You hit the nail on the head.
Real Knowledge Comes Only From Experience

Post Reply