Spoke with a CFP...underwhelming!

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unstoppable
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Spoke with a CFP...underwhelming!

Post by unstoppable » Thu Oct 18, 2018 6:59 am

I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.

1. Most of the session was pats on the back on how 'well' I was doing, which I thought was nice for the first minute, but not looking to blow up my head. I'm just earning and saving, the same thing anyone else in America could do if they cares. When there's an actual will, there's a freaking way.

2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?

3. We both agreed on the SWR of 4% and most of the common mentions there...

4. For International equity breakdown, I mentioned how so many have taken a US only approach...especially during the bull market (i'm sure many are influenced by this - regardless if they admit it). His recommended/opinion on this is 50/50 US vs. International for equities. He did tell me this is purely up to each person, and there's really no specific level and AA is the real determination of performance. After reading a lot last night I feel quite comfortable at the 25% level, especially looking at what a lot of the main firms utilize for their funds of funds. 25% seems like a nice middle ground. His amounts were based on market cap.

Just curious on your thoughts... Thanks guys!

typical.investor
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Re: Spoke with a CFP...underwhelming!

Post by typical.investor » Thu Oct 18, 2018 7:16 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?
What was the rationale? To keep growth evenly distributed across accounts?

I've been watching a CFA level II tutorial on Equity Valuation and actually have been surprised by how high the level of understanding is on this site. Of course, it's occasionally wrong too, but things usually get corrected.

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Re: Spoke with a CFP...underwhelming!

Post by Oak&Elm » Thu Oct 18, 2018 7:33 am

My own son who has completed the CFP courses (but has not taken the final exam) and I have had many conversations about investing. I have mentioned this site several times but he just scoff's at it saying it's internet advice from random strangers. Given the choice between a CFP and Bogelheads.org I gotta say I love my son but I'm going with this site for my investment advice. People here have absolutely no financial hidden agenda. The advice is sound and simple for most investor's who are willing make the effort to learn the basics. I would agree that more complex tax and/or estate planning is another story. So if you want to work with your CFP it's not the worst decision but most here will tell you you can DIY as well.
Disclosure, my son recently left the wealth management industry.

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Re: Spoke with a CFP...underwhelming!

Post by Ron Scott » Thu Oct 18, 2018 8:08 am

I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: Spoke with a CFP...underwhelming!

Post by Watty » Thu Oct 18, 2018 8:21 am

Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
You might want to read the classic book "Where are the Customers Yachts?" before you hire a wealthy financial advisor.

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DanMahowny
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Re: Spoke with a CFP...underwhelming!

Post by DanMahowny » Thu Oct 18, 2018 8:29 am

A couple thoughts:

1) The typical Bogelhead's knowledge of personal finance and investing exceeds the CFP community. And Bogelheads are more trustworthy too.

2) I made the mistake of "hiring" a friend (insurance agent). Never again. Too hard to fire them.
Funding secured

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Re: Spoke with a CFP...underwhelming!

Post by staythecourse » Thu Oct 18, 2018 8:33 am

Oak&Elm wrote:
Thu Oct 18, 2018 7:33 am
My own son who has completed the CFP courses (but has not taken the final exam) and I have had many conversations about investing. I have mentioned this site several times but he just scoff's at it saying it's internet advice from random strangers.
I've never understood why folk's care WHERE a piece of advice is coming from. One should listen to everything then go research it themselves and think and think and think if it the best option for them. I've always told folk's even as a doctor who runs their own practice if a janitor had a good suggestion I would have NO problem going with it. It is the ADVICE that matter and not the mouth or credentials that it comes from.

Blindly following anyone is never a good idea. Doesn't matter if it is "internet advice from random strangers" or a PHD in finance or your own mom and dad.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Spoke with a CFP...underwhelming!

Post by 9-5 Suited » Thu Oct 18, 2018 8:34 am

Seems pretty good to me honestly. More advisors should give extremely simple advice like this. I’m more skeptical of people in the financial industry who claim to know secret info or big ways to beat the system since I think both are ways to enrich advisors at your expense.

The same allocation across accounts isn’t how I approach it, but it’s not ridiculous for the typical person looking for simple way to go. Tax efficiency isn’t a top three priority IMO.

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Re: Spoke with a CFP...underwhelming!

Post by Dave55 » Thu Oct 18, 2018 8:36 am

I have had 3 advisors over the past 30 years, been DYI since 2011. All those advisors were CFP's too and they all had the same asset allocation for taxable and the IRA accounts.


Dave
Last edited by Dave55 on Fri Oct 19, 2018 8:55 am, edited 1 time in total.

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Re: Spoke with a CFP...underwhelming!

Post by JW-Retired » Thu Oct 18, 2018 8:36 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
3. We both agreed on the SWR of 4% and most of the common mentions there...
Did you both agree that the SWR of 4% was before his cost? Leaving you to net for example 3%?

If not, how did he skirt that fact of arithmetic?
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Re: Spoke with a CFP...underwhelming!

Post by goingup » Thu Oct 18, 2018 8:37 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?
Yes, we loosely keep 60/40 in most accounts. I use one blended fund in 401K, one in rollover IRAs. In taxable account- stock index funds, muni bond and cash. This isn't the conventional advice given on the forum but I could never accept anchoring a 401K entirely with bonds.

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Re: Spoke with a CFP...underwhelming!

Post by Runner01 » Thu Oct 18, 2018 8:43 am

re: Tax efficient fund placement

The CFP's main goal is likely to create a workable plan that the average client can easily stick to. Portfolio wide asset allocation management may be unnecessarily complex for most of his clients so he creates a more simplified plan that will still lead to financial success.

moehoward
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Re: Spoke with a CFP...underwhelming!

Post by moehoward » Thu Oct 18, 2018 8:43 am

Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
As Spock would say, flawlessly logical.

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Re: Spoke with a CFP...underwhelming!

Post by Runner01 » Thu Oct 18, 2018 8:45 am

JW-Retired wrote:
Thu Oct 18, 2018 8:36 am
unstoppable wrote:
Thu Oct 18, 2018 6:59 am
3. We both agreed on the SWR of 4% and most of the common mentions there...
Did you both agree that the SWR of 4% was before his cost? Leaving you to net for example 3%?

If not, how did he skirt that fact of arithmetic?
JW
This is a non issue if the advisor is fee only.

unstoppable
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Re: Spoke with a CFP...underwhelming!

Post by unstoppable » Thu Oct 18, 2018 8:46 am

JW-Retired wrote:
Thu Oct 18, 2018 8:36 am
unstoppable wrote:
Thu Oct 18, 2018 6:59 am
3. We both agreed on the SWR of 4% and most of the common mentions there...
Did you both agree that the SWR of 4% was before his cost? Leaving you to net for example 3%?

If not, how did he skirt that fact of arithmetic?
JW
Ha, I'm not actually using him. He's a family friend, and basically gave me a free intro session, as he normally does for his paid clients. I even said I only wanted the free session if it was treated the same as a normal one, and if anything he said he put far more time into it. Great point though for those who actually use the advisors. As mentioned in other occasions, they are more their for the emotional standpoint than anything else, far more knowledge on here.

unstoppable
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Re: Spoke with a CFP...underwhelming!

Post by unstoppable » Thu Oct 18, 2018 8:48 am

Runner01 wrote:
Thu Oct 18, 2018 8:45 am
JW-Retired wrote:
Thu Oct 18, 2018 8:36 am
unstoppable wrote:
Thu Oct 18, 2018 6:59 am
3. We both agreed on the SWR of 4% and most of the common mentions there...
Did you both agree that the SWR of 4% was before his cost? Leaving you to net for example 3%?

If not, how did he skirt that fact of arithmetic?
JW
This is a non issue if the advisor is fee only.
Exactly - and this was just a free friendly session. Long time family friend, and we always talked about doing a review. Great guy, and actually he was very affordable, for a (1) time session. No where near significant pricing that would impact SWR, but again mainly for someone with limited to bare knowledge.

unstoppable
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Re: Spoke with a CFP...underwhelming!

Post by unstoppable » Thu Oct 18, 2018 8:50 am

Runner01 wrote:
Thu Oct 18, 2018 8:43 am
re: Tax efficient fund placement

The CFP's main goal is likely to create a workable plan that the average client can easily stick to. Portfolio wide asset allocation management may be unnecessarily complex for most of his clients so he creates a more simplified plan that will still lead to financial success.
Yes, this was his main point. Simplicity, even at the cost of not being near perfect in terms of best practices. He was really just about the most important factors (earning, saving, staying the course, AA, etc.)...which is all that matters for the majority.

unstoppable
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Re: Spoke with a CFP...underwhelming!

Post by unstoppable » Thu Oct 18, 2018 8:51 am

staythecourse wrote:
Thu Oct 18, 2018 8:33 am
Oak&Elm wrote:
Thu Oct 18, 2018 7:33 am
My own son who has completed the CFP courses (but has not taken the final exam) and I have had many conversations about investing. I have mentioned this site several times but he just scoff's at it saying it's internet advice from random strangers.
I've never understood why folk's care WHERE a piece of advice is coming from. One should listen to everything then go research it themselves and think and think and think if it the best option for them. I've always told folk's even as a doctor who runs their own practice if a janitor had a good suggestion I would have NO problem going with it. It is the ADVICE that matter and not the mouth or credentials that it comes from.

Blindly following anyone is never a good idea. Doesn't matter if it is "internet advice from random strangers" or a PHD in finance or your own mom and dad.

Good luck.
THIS.


Well said! I've received better advice from members on other forums related to health/nutrition, than my actual Doctor who is in a rush and gives generic insight.

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Re: Spoke with a CFP...underwhelming!

Post by staythecourse » Thu Oct 18, 2018 8:57 am

Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
Do as you want, but would NOT do this. Anybody with a computer can photoshop and make up anything. So what makes you think he isn't just making up his returns and make a glossy printout for you. Not like ponzi scheme guys haven't been doing this for YEARS (before photoshop).

Also, you have to ultimately as if he is so rich and successful why would he care about your pittance of money (no offense if you are under 10 million) it would be a pittance if he is that successful. I would be asking WHY is even interested in taking me in as a client. There are bigger fish to fry.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Spoke with a CFP...underwhelming!

Post by Ron Scott » Thu Oct 18, 2018 8:57 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am

We both agreed on the SWR of 4% and most of the common mentions there...
This advice deserves to be treated with the same gravity as his advice on investing.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: Spoke with a CFP...underwhelming!

Post by JW-Retired » Thu Oct 18, 2018 8:58 am

unstoppable wrote:
Thu Oct 18, 2018 8:48 am
Runner01 wrote:
Thu Oct 18, 2018 8:45 am
JW-Retired wrote:
Thu Oct 18, 2018 8:36 am
unstoppable wrote:
Thu Oct 18, 2018 6:59 am
3. We both agreed on the SWR of 4% and most of the common mentions there...
Did you both agree that the SWR of 4% was before his cost? Leaving you to net for example 3%?

If not, how did he skirt that fact of arithmetic?
JW
This is a non issue if the advisor is fee only.
Exactly - and this was just a free friendly session. Long time family friend, and we always talked about doing a review. Great guy, and actually he was very affordable, for a (1) time session. No where near significant pricing that would impact SWR, but again mainly for someone with limited to bare knowledge.
OK, sounds like he didn't mention it. Even a long time family friend won't tell you. :D
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Re: Spoke with a CFP...underwhelming!

Post by BogleMelon » Thu Oct 18, 2018 9:03 am

DanMahowny wrote:
Thu Oct 18, 2018 8:29 am


2) I made the mistake of "hiring" a friend (insurance agent). Never again. Too hard to fire them.
+1
I learned the hard way also to never mix friends/relatives with business/money
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Spoke with a CFP...underwhelming!

Post by Ron Scott » Thu Oct 18, 2018 9:04 am

Watty wrote:
Thu Oct 18, 2018 8:21 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
You might want to read the classic book "Where are the Customers Yachts?" before you hire a wealthy financial advisor.
staythecourse wrote:
Thu Oct 18, 2018 8:57 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
Do as you want, but would NOT do this. Anybody with a computer can photoshop and make up anything. So what makes you think he isn't just making up his returns and make a glossy printout for you. Not like ponzi scheme guys haven't been doing this for YEARS (before photoshop).

Also, you have to ultimately as if he is so rich and successful why would he care about your pittance of money (no offense if you are under 10 million) it would be a pittance if he is that successful. I would be asking WHY is even interested in taking me in as a client. There are bigger fish to fry.
I meant it tongue-in-cheek BTW.

I am an avowed DIYer who meets twice a year with my accountant and calls VG from time to time with specific technical questions unrelated to how I should invest my money.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: Spoke with a CFP...underwhelming!

Post by BogleMelon » Thu Oct 18, 2018 9:05 am

staythecourse wrote:
Thu Oct 18, 2018 8:33 am
I've never understood why folk's care WHERE a piece of advice is coming from.
Because Ad hominem is very tempting https://en.wikipedia.org/wiki/Ad_hominem
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Spoke with a CFP...underwhelming!

Post by bertilak » Thu Oct 18, 2018 9:09 am

staythecourse wrote:
Thu Oct 18, 2018 8:33 am
I've never understood why folk's care WHERE a piece of advice is coming from. One should listen to everything then go research it themselves and think and think and think if it the best option for them.
Somewhat disagree. Researching every piece of advice one comes across would be a full-time job, one I am not interested in signing up for. Selecting what advice is worth the effort makes sense to me and one of the biggest selection criteria is the source of the advice.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

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Re: Spoke with a CFP...underwhelming!

Post by stoptothink » Thu Oct 18, 2018 9:12 am

Watty wrote:
Thu Oct 18, 2018 8:21 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
You might want to read the classic book "Where are the Customers Yachts?" before you hire a wealthy financial advisor.
+1. Mentioned it many times here, but one of my closest friends is an "extremely wealthy financial advisor" (he makes close to 7-figures annually), but his actual knowledge of investing would probably put him below the median for this board. Him and I never talk about money; ever. I often wonder who the heck is paying him for financial advice, but he's a born salesman who comes from a family of salesmen. Investing can be so easy for most people, but the general public tends to have xenophobia when it comes to the stock market.

I know three other very successful FA's pretty well, none of which I would consider an actual expert in their field. I know for a fact that they are out there (real investing "experts" who actually work in the financial services industry), but I haven't met many.

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Re: Spoke with a CFP...underwhelming!

Post by pkcrafter » Thu Oct 18, 2018 9:27 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.

Underwhelming? That's interesting because he gave you down the line Boglehead advice. :happy

1. Most of the session was pats on the back on how 'well' I was doing, which I thought was nice for the first minute, but not looking to blow up my head. I'm just earning and saving, the same thing anyone else in America could do if they cares. When there's an actual will, there's a freaking way.

2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Most all of us do this. This sounds like pure Boglehead advice. This doesn't mean having 80/20 in each account, it means treat all accounts as parts of one, single portfolio.

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?

Impact of taxes depends a lot on your tax bracet, but here is some information from the Wiki.

https://www.bogleheads.org/wiki/Tax-eff ... _placement

3. We both agreed on the SWR of 4% and most of the common mentions there...

4. For International equity breakdown, I mentioned how so many have taken a US only approach...especially during the bull market (i'm sure many are influenced by this - regardless if they admit it). His recommended/opinion on this is 50/50 US vs. International for equities. He did tell me this is purely up to each person, and there's really no specific level and AA is the real determination of performance. After reading a lot last night I feel quite comfortable at the 25% level, especially looking at what a lot of the main firms utilize for their funds of funds. 25% seems like a nice middle ground. His amounts were based on market cap.

Vanguard recommends 40% equity, Bogleheads recommend ~20%-40%.

Just curious on your thoughts... Thanks guys!

It sounds like the advisor gave you the correct advice, but I really doubt this is what he's telling potential new clients unless he's getting a 1% management fee. On second thought, I really doubt this is what he's telling clients management fee or not. Imagine how many customers an advisor would get if he told all clients to just hold three funds. They would give him a funny look and say, well, hell, I can do that myself :happy

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Re: Spoke with a CFP...underwhelming!

Post by F150HD » Thu Oct 18, 2018 9:29 am

Watty wrote:
Thu Oct 18, 2018 8:21 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
You might want to read the classic book "Where are the Customers Yachts?" before you hire a wealthy financial advisor.
LOL....+1. If the FA is wealthy, there's a reason for that!

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Alexa9
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Re: Spoke with a CFP...underwhelming!

Post by Alexa9 » Thu Oct 18, 2018 9:43 am

Their job is to help and teach people that don't know much. If you're already an expert, what's the point? Did you just want to point out their supposed errors? Like any profession, some are better than others.

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Re: Spoke with a CFP...underwhelming!

Post by Minisoda » Thu Oct 18, 2018 9:55 am

I’ve had a bad experience with a traditional wealth manager over the past year and recently took control of my own destiny (I think I should start paying myself a 1% fee that gets invested in new motorcycle as annually).

Anyway, the decision was absolutely solidified when a high school friend posted on Facebook recently. He has been a prison guard for the past 20 years, was burned out, and changed careers to become a CFP. He was through the test and certified to direct people assets inside 30 days. 😳

Also, the wealth managers in our neighborhood ALL have houses 2x the value of the rest of us.

I’m done.

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Re: Spoke with a CFP...underwhelming!

Post by SouthernCPA » Thu Oct 18, 2018 10:00 am

Alexa9 wrote:
Thu Oct 18, 2018 9:43 am
Their job is to help and teach people that don't know much. If you're already an expert, what's the point? Did you just want to point out their supposed errors? Like any profession, some are better than others.
I agree. This would be like a self taught guitarists such as John Mayer going to an intermediate guitar lesson instructor and reporting back that he didn't know what he was doing. What is the point other than to make yourself feel good? CFP's may not be a good fit for YOU, but for many others that aren't Boglehead/DIYer's and don't have the interest to be, they provide a valuable service. It doesn't even sound like this CFP was that far off the mark of your own personal investment philosophy (bogleheadish).

Also, keep in mind that Bogleheads philosophy is not the one and only way. Most of the wealthiest people I know were/are nowhere near bogleheads and they are doing just fine.

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Re: Spoke with a CFP...underwhelming!

Post by unstoppable » Thu Oct 18, 2018 10:21 am

SouthernCPA wrote:
Thu Oct 18, 2018 10:00 am
Alexa9 wrote:
Thu Oct 18, 2018 9:43 am
Their job is to help and teach people that don't know much. If you're already an expert, what's the point? Did you just want to point out their supposed errors? Like any profession, some are better than others.
I agree. This would be like a self taught guitarists such as John Mayer going to an intermediate guitar lesson instructor and reporting back that he didn't know what he was doing. What is the point other than to make yourself feel good? CFP's may not be a good fit for YOU, but for many others that aren't Boglehead/DIYer's and don't have the interest to be, they provide a valuable service. It doesn't even sound like this CFP was that far off the mark of your own personal investment philosophy (bogleheadish).

Also, keep in mind that Bogleheads philosophy is not the one and only way. Most of the wealthiest people I know were/are nowhere near bogleheads and they are doing just fine.
Sorry if it came across as a bash to them, it was really just to let some members who are curious about it, that they most likely already have a great grasp from here alone. The help was very much appreciated, and I enjoyed every minute of it. I got a lot of answers to curious questions I had, and it was a wonderful chat. It just wasn't necessary, but again it provides tremendous value to people who do not have time to read/research or care an iota to.

Also agree with your last statement, I can see that just from some people that I know as well.

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Re: Spoke with a CFP...underwhelming!

Post by ruralavalon » Thu Oct 18, 2018 10:32 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.

1. Most of the session was pats on the back on how 'well' I was doing, which I thought was nice for the first minute, but not looking to blow up my head. I'm just earning and saving, the same thing anyone else in America could do if they cares. When there's an actual will, there's a freaking way.
That may be because your plan is good :) .

Why not just accept the compliment?

unstoppable wrote:2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?
Did the CFP say across all accounts? I think that is the more common advice here.

Did the CFP say the same asset allocation in each account? Some people here do use this approach for simplicity in maintaining the desired asset allocation. In lower tax brackets this can work well.


unstoppable wrote:Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?
I don't.

unstoppable wrote:3. We both agreed on the SWR of 4% and most of the common mentions there...
So this is not controversial.

unstoppable wrote:4. For International equity breakdown, I mentioned how so many have taken a US only approach...especially during the bull market (i'm sure many are influenced by this - regardless if they admit it). His recommended/opinion on this is 50/50 US vs. International for equities. He did tell me this is purely up to each person, and there's really no specific level and AA is the real determination of performance. After reading a lot last night I feel quite comfortable at the 25% level, especially looking at what a lot of the main firms utilize for their funds of funds. 25% seems like a nice middle ground. His amounts were based on market cap.
There is enormous difference of opinion here running all the way from 00% of stocks in international stocks all the way to 50/50. I too feel comfortable around 20-30% of stocks in international stocks.

The differences in opinion are probably because there is no clear right answer supported by actual evidence.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

staythecourse
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Re: Spoke with a CFP...underwhelming!

Post by staythecourse » Thu Oct 18, 2018 10:52 am

Ron Scott wrote:
Thu Oct 18, 2018 9:04 am
Watty wrote:
Thu Oct 18, 2018 8:21 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
You might want to read the classic book "Where are the Customers Yachts?" before you hire a wealthy financial advisor.
staythecourse wrote:
Thu Oct 18, 2018 8:57 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
Do as you want, but would NOT do this. Anybody with a computer can photoshop and make up anything. So what makes you think he isn't just making up his returns and make a glossy printout for you. Not like ponzi scheme guys haven't been doing this for YEARS (before photoshop).

Also, you have to ultimately as if he is so rich and successful why would he care about your pittance of money (no offense if you are under 10 million) it would be a pittance if he is that successful. I would be asking WHY is even interested in taking me in as a client. There are bigger fish to fry.
I meant it tongue-in-cheek BTW.

I am an avowed DIYer who meets twice a year with my accountant and calls VG from time to time with specific technical questions unrelated to how I should invest my money.
My bad went right over my head.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Spoke with a CFP...underwhelming!

Post by Teague » Thu Oct 18, 2018 11:22 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.
Was this conversation during an appointment where you paid him his customary fee, or just a casual conversation in a social setting?
Semper Augustus

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Re: Spoke with a CFP...underwhelming!

Post by Grt2bOutdoors » Thu Oct 18, 2018 8:39 pm

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.

1. Most of the session was pats on the back on how 'well' I was doing, which I thought was nice for the first minute, but not looking to blow up my head. I'm just earning and saving, the same thing anyone else in America could do if they cares. When there's an actual will, there's a freaking way.

2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.
Think of it this way, when saving for retirement most folks are not able to save outside of a 401k/IRA, holding equities in those accounts makes perfect sense. Want to hold bonds in a pretax plan, fine, but if you are not able to save as much outside of one, then loading up on low yielding bonds isn’t going to help you come retirement. The other way to view his advice is most people want simplicity- it’s easy to look at each account and know that it’s allocation is exactly matched to that in your written IPS.
He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?

3. We both agreed on the SWR of 4% and most of the common mentions there...

4. For International equity breakdown, I mentioned how so many have taken a US only approach...especially during the bull market (i'm sure many are influenced by this - regardless if they admit it). His recommended/opinion on this is 50/50 US vs. International for equities. He did tell me this is purely up to each person, and there's really no specific level and AA is the real determination of performance. After reading a lot last night I feel quite comfortable at the 25% level, especially looking at what a lot of the main firms utilize for their funds of funds. 25% seems like a nice middle ground. His amounts were based on market cap. His advice is fine, many institutions invest exactly like that, half domestic and half international. Ultimately you have to invest according to your own risk tolerances.

Just curious on your thoughts... Thanks guys!
His advice was fine.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Spoke with a CFP...underwhelming!

Post by Jack FFR1846 » Thu Oct 18, 2018 8:49 pm

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?
Anyone? I don't know....probably. Here's why it's bad advice. Say your available funds are like this in your 401k:

S%P 500: ER 0.015%
total us stock: ER 2%
total us bond: ER 2%
total international: ER 2%

Are you really going to get anything besides the S&P? Although not 2%, this is my 401k. S&P is great but the rest are expensive garbage.

My accounts are like this:

IRA: 3 fund
every other of 9 accounts: 1 fund at the absolute cheapest ER.
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Re: Spoke with a CFP...underwhelming!

Post by JBTX » Thu Oct 18, 2018 8:57 pm

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.

1. Most of the session was pats on the back on how 'well' I was doing, which I thought was nice for the first minute, but not looking to blow up my head. I'm just earning and saving, the same thing anyone else in America could do if they cares. When there's an actual will, there's a freaking way.

2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?


3. We both agreed on the SWR of 4% and most of the common mentions there...

4. For International equity breakdown, I mentioned how so many have taken a US only approach...especially during the bull market (i'm sure many are influenced by this - regardless if they admit it). His recommended/opinion on this is 50/50 US vs. International for equities. He did tell me this is purely up to each person, and there's really no specific level and AA is the real determination of performance. After reading a lot last night I feel quite comfortable at the 25% level, especially looking at what a lot of the main firms utilize for their funds of funds. 25% seems like a nice middle ground. His amounts were based on market cap.

Just curious on your thoughts... Thanks guys!
Actually not terrible advice. For most people whether bonds or stocks in tax advantaged makes little difference. Putting market weight in international is a defensible position but I prefer 33-40%, which is in line with most target date funds. I would not do 4% unless retiring at 67-70. Personally targeting roughly 3%.

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Re: Spoke with a CFP...underwhelming!

Post by abuss368 » Thu Oct 18, 2018 9:00 pm

Dave55 wrote:
Thu Oct 18, 2018 8:36 am
I have had 3 advisors over the past 30 years, been DYI since 2011. All those advisors were CPA's too and they all had the same asset allocation for taxable and the IRA accounts.


Dave
Hi Dave -

CFP's or CPA's?
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Spoke with a CFP...underwhelming!

Post by abuss368 » Thu Oct 18, 2018 9:03 pm

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
I have a family friend who is a CFP in the local area, and I've always been curious to talk to him, as I've only learned from reading, forums, blogs, etc. I was always eager to hear his take on where I stand, and his thoughts. I finally spoke with him yesterday afternoon, and it was a bit underwhelming.

1. Most of the session was pats on the back on how 'well' I was doing, which I thought was nice for the first minute, but not looking to blow up my head. I'm just earning and saving, the same thing anyone else in America could do if they cares. When there's an actual will, there's a freaking way.

2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?

3. We both agreed on the SWR of 4% and most of the common mentions there...

4. For International equity breakdown, I mentioned how so many have taken a US only approach...especially during the bull market (i'm sure many are influenced by this - regardless if they admit it). His recommended/opinion on this is 50/50 US vs. International for equities. He did tell me this is purely up to each person, and there's really no specific level and AA is the real determination of performance. After reading a lot last night I feel quite comfortable at the 25% level, especially looking at what a lot of the main firms utilize for their funds of funds. 25% seems like a nice middle ground. His amounts were based on market cap.

Just curious on your thoughts... Thanks guys!
There are two strategies to managing accounts:

* Asset Location
* Equal Location

There are advantages and disadvantages to both strategies. The bond allocation in taxable could have Total Bond substituted for Tax Exempt Bonds.

In fact, Rick Ferri used to recommend a Equal Location strategy. Perhaps he can provide additional perspective.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Spoke with a CFP...underwhelming!

Post by sjasthi » Thu Oct 18, 2018 9:40 pm

staythecourse wrote:
Thu Oct 18, 2018 8:33 am
..... One should listen to everything then go research it themselves and think and think and think if it the best option for them.
.....
Good luck.
Agree 100%!!
I have paid financial advisors once every few years. I only use someone who charges by the hour. I usually pay for a couple of hours and show them what I am doing and ask them what I might be missing.

I can report that the two hours' fees were well worth it. Every time, I learned something I should have done a bit differently.
It's always good to be open to new ideas and wanting to learn. One way ir Bogleheads. But none of you guys have the time to look at the details of my specific portfolio - so augmenting this knowledge with someone who might think differently than me only adds to my learning.

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Re: Spoke with a CFP...underwhelming!

Post by Toons » Thu Oct 18, 2018 9:49 pm

Live Beneath Your Means.(For Years)
Take Advantage of 401k,,Iras etc etc.
Avoid Debt.
15 yr mortgage-pay off early.
Most important of all Invest early,continuously
Total Stock Market..
Compounding will become your wealth building ally.

Easy -Free Planning :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Spoke with a CFP...underwhelming!

Post by Bmac » Thu Oct 18, 2018 9:59 pm

Actually, I would say his advice was at least “whelming.” Perhaps redundant for a well educated Boglehead, but certainly appropriate for the average non-Boglehead with little interest in DIY personal finance. For most, if a CFP can get the client to implement the recommendations and maintain a buy and hold strategy through market up and downs, that client will come out ahead in the end. Far better than the typical Edward Jones, et. al. advisee.

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Re: Spoke with a CFP...underwhelming!

Post by tfb » Fri Oct 19, 2018 1:36 am

unstoppable wrote:
Thu Oct 18, 2018 6:59 am
2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?
The benefit of tax efficient placement over naive across-the-board allocation can be very small, especially when your portfolio is more lopsided in tax advantaged accounts or in taxable accounts. I have a spreadsheet here. You can enter different tax rates and see the difference. Chances are the difference is a lot smaller than you think.

https://thefinancebuff.com/tax-efficien ... rence.html
Harry Sit, taking a break from the forums.

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Re: Spoke with a CFP...underwhelming!

Post by typical.investor » Fri Oct 19, 2018 2:11 am

tfb wrote:
Fri Oct 19, 2018 1:36 am
unstoppable wrote:
Thu Oct 18, 2018 6:59 am
2. Simplicity...we agreed on this mark, but he was even more simple than I imagined. I kept mentioned tax efficiency, such as bonds in a 401k/IRA but this wasn't the same advice.

He mentioned having your target AA applied to all accounts. For example let's just say I'm 80/20 AA, he told me to do that across all accounts...Roth IRA, 401k, HSA, and Taxable Brokerage. I really haven't seen many people go this route? Does anyone here do this?

Does anyone have an actual easy to read chart showing the actual impact of bonds in taxable across different income/tax levels?
The benefit of tax efficient placement over naive across-the-board allocation can be very small, especially when your portfolio is more lopsided in tax advantaged accounts or in taxable accounts. I have a spreadsheet here. You can enter different tax rates and see the difference. Chances are the difference is a lot smaller than you think.

https://thefinancebuff.com/tax-efficien ... rence.html
It doesn’t seem like a great analysis.
The tax cost of bonds yielding 2% taxed at 40% is 0.8%. The tax cost of stocks with a 7% expected return taxed at 15% is 1.05%
Do people really turnover their stocks every year in taxable?

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Re: Spoke with a CFP...underwhelming!

Post by tfb » Fri Oct 19, 2018 8:26 am

typical.investor wrote:
Fri Oct 19, 2018 2:11 am
It doesn’t seem like a great analysis.
The tax cost of bonds yielding 2% taxed at 40% is 0.8%. The tax cost of stocks with a 7% expected return taxed at 15% is 1.05%
Do people really turnover their stocks every year in taxable?
It's a spreadsheet. Don't hang up on just one example. You get to use whatever rate is applicable to you. If you think 5% is better than 15%, use 5%. If you think it should be 3%, use 3%. The spreadsheet still works to show the effect of efficient placement over naive placement.
Harry Sit, taking a break from the forums.

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Re: Spoke with a CFP...underwhelming!

Post by Steve723 » Fri Oct 19, 2018 8:34 am

F150HD wrote:
Thu Oct 18, 2018 9:29 am
Watty wrote:
Thu Oct 18, 2018 8:21 am
Ron Scott wrote:
Thu Oct 18, 2018 8:08 am
I am interested in working with an extremely wealthy financial advisor who has invested according to his own advice for many years and can provide me adequate documentation he has done so.
You might want to read the classic book "Where are the Customers Yachts?" before you hire a wealthy financial advisor.
LOL....+1. If the FA is wealthy, there's a reason for that!
I know you meant this tongue and cheek, but this actually describes a lot of the folks here!

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Re: Spoke with a CFP...underwhelming!

Post by Dave55 » Fri Oct 19, 2018 8:43 am

abuss368 wrote:
Thu Oct 18, 2018 9:00 pm
Dave55 wrote:
Thu Oct 18, 2018 8:36 am
I have had 3 advisors over the past 30 years, been DYI since 2011. All those advisors were CPA's too and they all had the same asset allocation for taxable and the IRA accounts.


Dave
Hi Dave -

CFP's or CPA's?
I meant CFP, not CPA's.
Thanks Tony,

Dave

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Re: Spoke with a CFP...underwhelming!

Post by Dave55 » Fri Oct 19, 2018 8:44 am

delete

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Re: Spoke with a CFP...underwhelming!

Post by inbox788 » Fri Oct 19, 2018 5:41 pm

abuss368 wrote:
Thu Oct 18, 2018 9:03 pm
There are advantages and disadvantages to both strategies. The bond allocation in taxable could have Total Bond substituted for Tax Exempt Bonds.

In fact, Rick Ferri used to recommend a Equal Location strategy. Perhaps he can provide additional perspective.
These finer points are relative minor in the overall return compared to AA effect. Still, exempt bonds aren't equal substitute for optimal asset location. In a taxable account, for high tax brackets, tax-exempt bonds may be more tax efficient than taxable bonds in the taxable account, but you still pay a price of lower nominal yields. Under most typical normal situations, after tax yields of taxable bonds in tax advantaged accounts should still beat tax-exempt bonds in taxable. The overall effect of crowding out other options is not so simple to optimize, so starting and staying with equal AA across accounts isn't the worst thing you could do.

https://www.bogleheads.org/wiki/Tax-eff ... _placement
https://www.whitecoatinvestor.com/asset ... n-taxable/

Anyway, most of these finer discussions are beyond the average investor who may benefit from the advice of CFPs who don't overcharge. Unfortunately, IMO, most of them do, especially those that charge AUM and may have conflicts of interest.

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