Do You Pay For Financial Advice?

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dwickenh
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Re: Do You Pay For Financial Advice?

Post by dwickenh »

I have paid a price in time to become educated in the Boglehead way of investing. I have read 30-40 books, spent many hours on this and other websites, and become a full time student of "staying the course".

Some people don't have the time or inclination to become educated on the DIY way, or are swayed by the stock picker websites.
These people will be better off with some type of financial advice from a trusted source.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
mancich
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Re: Do You Pay For Financial Advice?

Post by mancich »

nedsaid wrote: Sat Oct 26, 2019 12:45 pm In the past, I employed Ameriprise for financial planning but never invested with them. I have mostly been a do-it-yourself investor but have sought advice over the years, I worked with an independent broker for years with part of my retirement portfolio. I also took advantage of free portfolio review services. Right now, I am test driving a portfolio advisory service which also includes comprehensive retirement planning.
Me too re: Ameriprise. Advice, but did not give them money to invest. I really just wanted a second set of eyes on what I was doing. I found virtually no value in the service. The financial plan consisted of me giving him my numbers (which I know really well), him putting it into PowerPoint, and then reviewing it with me, with little actionable recommendations. Oh, and a lot of pitches for insurance-based products that I didn't fall for: Equity Indexed Universal Life, Variable Annuities, Variable Life, etc, etc.
Rich in Michigan
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Re: Do You Pay For Financial Advice?

Post by Rich in Michigan »

Nope. I had a broker when I was young but at 26 but he switched me to a house account because I wasn't churning enough to generate commissions for him. Even then, I never paid for advice. For the past 42 years I have flown solo. I make all my own investment decisions and have never paid for advice.
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retired@50
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Re: Do You Pay For Financial Advice?

Post by retired@50 »

Toons wrote: Sat Oct 26, 2019 6:55 pm Live beneath your means,
Stay out of debt,
Save
Invest
Index funds...

No need to charge for that
:mrgreen:
I agree. "Dilbert" comic strip author Scott Adams summed it up as well. See link. He was contemplating writing a book about finance and advice, but he could only come up with one page... So, not a book. Regards,

https://www.mattcutts.com/blog/scott-ad ... al-advice/
This is one person's opinion. Nothing more.
LavaField
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Re: Do You Pay For Financial Advice?

Post by LavaField »

Do You Pay For Financial Advice?

--> No

For the first two years of my working professional career I had an advisor. Mainly because I didn't have time or interest in finance at that time. I was more-so worried about focusing on my demanding job. Once my job settled (or more accurately I settled into the job), I figured I could learn how to do it myself. I read or listened to about 20 books/audiobooks on personal finance, and read tons on website like this one. I felt better about doing it myself when my advisor (whose firm sounded like Storgan-Manley) couldn't tell me succinctly what the fees were. I rolled my accounts over to Vanguard. about 5 years later i haven't looked back.
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nedsaid
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Re: Do You Pay For Financial Advice?

Post by nedsaid »

mancich wrote: Sun Oct 27, 2019 10:09 am
nedsaid wrote: Sat Oct 26, 2019 12:45 pm In the past, I employed Ameriprise for financial planning but never invested with them. I have mostly been a do-it-yourself investor but have sought advice over the years, I worked with an independent broker for years with part of my retirement portfolio. I also took advantage of free portfolio review services. Right now, I am test driving a portfolio advisory service which also includes comprehensive retirement planning.
Me too re: Ameriprise. Advice, but did not give them money to invest. I really just wanted a second set of eyes on what I was doing. I found virtually no value in the service. The financial plan consisted of me giving him my numbers (which I know really well), him putting it into PowerPoint, and then reviewing it with me, with little actionable recommendations. Oh, and a lot of pitches for insurance-based products that I didn't fall for: Equity Indexed Universal Life, Variable Annuities, Variable Life, etc, etc.
I got sensible recommendations regarding asset allocation and insurance but found that they wanted to sell Variable Annuities, Universal Life, Structured Bank Notes. They also had a list of favored mutual fund families which paid Ameriprise for "shelf space", they do disclose this. But it put their Advisors into a pretty clear conflict of interest. I moved on five years ago. I will say that I learned quite a bit from going through the financial planning process.
A fool and his money are good for business.
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unclescrooge
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Re: Do You Pay For Financial Advice?

Post by unclescrooge »

livesoft wrote: Sat Oct 26, 2019 1:34 pm While I don't pay for financial advice for myself, I know of someone who does pay a relatively low-cost AUM financial advisor of the DFA-type for managing their portfolio. Furthermore, this person has shown me in detail their accounts and I have helped them also with advice.

It turns out that the advisor has been good for this someone because the someone is indecisive and will let money sit in a bank savings account earning 0.1% interest. But even if the advisor says, "Please add this savings account money to your investments for us to manage", the someone would not to do so out of fear of paying the advisor too much. In the meantime, the savings account money falls behind in performance versus the rest of the portfolio.

So the behavior of this person is costing them more money than the advisor would. I suspect many DIY folks posting on this forum might fall into the same category because they are not DIY, but are Not-DIY.
+1
I think the other extreme is also bad. Where someone is too DIY, and tries to do everything themselves. But they don't have the time to properly analyze the options. So they do a poor job.

For example, a friend of mine had about $300k in cash. That's his safety money. It's in cash.

His investment portfolio is about $600k and he keeps flipping between extreme caution and aggressiveness. 5 years ago his investment portion was 60% bonds, now it's 100% stocks, with a heavy concentration in penny stocks and expensive tech fund (which are closet qqq index funds with 1.2% fees). He also day trades hot stocks. I know he's lost 10k in Bitcoin and an equal amount in GE.

I suspect he has been trailing a benchmark portfolio by 4-5% a year for a decade.
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GerryL
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Re: Do You Pay For Financial Advice?

Post by GerryL »

JoeRetire wrote: Sun Oct 27, 2019 5:28 am
I always wonder if paid advice might be warranted. How could you know if you would have been better off paying for (and following) advice or not? Even if the results were good, how could you possibly know that they wouldn't have been even better?
You can't really know if it would have been better with an advisor … or worse. Well, you certainly can't know ahead of time. But that's not really the point. Is it good enough? If yes, then no point worrying about whether a different path would have been better. Embrace the Good Enough.
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Stinky
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Re: Do You Pay For Financial Advice?

Post by Stinky »

retired@50 wrote: Sun Oct 27, 2019 10:25 am
Toons wrote: Sat Oct 26, 2019 6:55 pm Live beneath your means,
Stay out of debt,
Save
Invest
Index funds...

No need to charge for that
:mrgreen:
I agree. "Dilbert" comic strip author Scott Adams summed it up as well. See link. He was contemplating writing a book about finance and advice, but he could only come up with one page... So, not a book. Regards,

https://www.mattcutts.com/blog/scott-ad ... al-advice/
Love the Scott Adams link!

I’m going to print it off for our local BH chapter meeting.
It's a GREAT day to be alive - Travis Tritt
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JoeRetire
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Re: Do You Pay For Financial Advice?

Post by JoeRetire »

GerryL wrote: Sun Oct 27, 2019 12:54 pm
JoeRetire wrote: Sun Oct 27, 2019 5:28 am
I always wonder if paid advice might be warranted. How could you know if you would have been better off paying for (and following) advice or not? Even if the results were good, how could you possibly know that they wouldn't have been even better?
You can't really know if it would have been better with an advisor … or worse. Well, you certainly can't know ahead of time. But that's not really the point. Is it good enough? If yes, then no point worrying about whether a different path would have been better. Embrace the Good Enough.
That's fair. Of course paying an adviser could also lead to Good Enough.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
Smoke
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Re: Do You Pay For Financial Advice?

Post by Smoke »

No, I do it all myself, with free suggestions and info on this site :P
Arguing for the sake of arguing is something I am not going to engage in.
Normchad
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Re: Do You Pay For Financial Advice?

Post by Normchad »

Nope, I do it all myself.

I’m open to the idea of laying for good service, but I don’t honestly know how to find that.

My spouse is not interested in any of this. I need to come up with a plan in case I predecease her. I’m certain it would involve paying somebody.
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LilyFleur
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Re: Do You Pay For Financial Advice?

Post by LilyFleur »

No, I do not pay someone. I have used the complimentary services of my Schwab guy (CFP, fiduciary) as well as the complimentary/limited advice from my 401k. The Schwab guy is way better than anyone I spoke to at my 401k.
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dogagility
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Re: Do You Pay For Financial Advice?

Post by dogagility »

No, never paid for financial advice. If I was prone to selling during market downturns due to psychological reasons, then I would consider using an advisor.

When I become older, much older, I will consider an advisor. Hopefully, I will know when that becomes necessary and I will have enough money for it to matter... :happy
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
LiterallyIronic
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Re: Do You Pay For Financial Advice?

Post by LiterallyIronic »

Holden42 wrote: Sat Oct 26, 2019 11:29 am Do you pay for financial advice?
No. I just stuck my 401k funds in a cheap 100% stock allocation, put my Roth IRA funds in Target Retirement Fund 2045 (the most aggressive available at the time), and my wife's Roth IRA funds in Target Retirement Fund 2050 (the most aggressive at the time). Then automated contributions. Done. It's not complicated.
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KingRiggs
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Re: Do You Pay For Financial Advice?

Post by KingRiggs »

I think a distinction needs to be made between "Financial Advice" and "Investment Advice".

As one's overall financial picture gets more complicated (higher assets, looming retirement, planning for Roth conversions between retirement and drawing SS), I think it's completely reasonable to pay for "Financial Advice" on a per-incidence basis. I did this last summer for the first time and was happy that most of my thoughts and plans were validated by the CFP/CPA, while having a some food for thought brought to my attention.

On the other hand, "Investment Advice" usually associated with an AUM fee, is essentially unnecessary if one adheres to a Boglehead philosophy as espoused on this site. The advice is free and will usually actually beat the advice paid for by salesmen and such.

There are, unfortunately, not many one-time fee-for-advice planners out there (thanks for hooking my up, Harry Sit!). My hope is that more people will learn the value of low-cost, simple investing and more planners will find a way to make a viable living offering advice-only service.
Advice = noun | Advise = verb | | Roth, not ROTH
sschoe2
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Re: Do You Pay For Financial Advice?

Post by sschoe2 »

[quote=Holden42 post_id=4810193
Do you pay for financial advice?

No, I do it all myself
[/quote]

Nope I DIY with help from Bogleheads and several other forums when I need. It's pretty simple, maximize income, minimize spending, invest in low cost index funds...
frugaltigris
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Re: Do You Pay For Financial Advice?

Post by frugaltigris »

I buy good finance books. That's how I pay.
rich126
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Re: Do You Pay For Financial Advice?

Post by rich126 »

I don't. For a few years I did give about 20% of my portfolio to a local FA that was pretty solid but I couldn't handle paying the 1% fee. I did in mainly to protect myself from myself (i.e., not have all my eggs in one basket) but it wasn't worth the quarterly check I had to pay.

Now I would gladly pay some money for tax advice. I've been trying to find a local person to sit down with and get a better understanding of my tax situation with investments as well as a house that has been used several times as a primary residence as well as a rental. Too many tax people seem to want to manage money as well. I know that isn't 100% true but finding a tax person alone is harder than you imagine.
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ChowYunPhat
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Re: Do You Pay For Financial Advice?

Post by ChowYunPhat »

Holden42 wrote: Sat Oct 26, 2019 11:29 am I'm in my mid 50's now with more money and with harder questions, like....roth conversion, tax implications, outliving my money, trusts, estate planning...
Not surprised by most of the responses as this is Bogleheads. Most of the people here can probably get to a point of managing their money and investment matters during the accumulation phase.

However, I can relate to Holden42 on some of the questions he has related to the transition decisions between accumulation to decumulation. I have looked at i-orp and done some self-directed tax planning for this future in my life (still some years away), but I wonder if having some help on a fee basis would be money well spent. Small missteps in calcs may result in a less optimal outcome. Curious if others are wrestling with this (or have) and what they did to get comfortable.
A wise man and his money are friends forever...
bltn
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Re: Do You Pay For Financial Advice?

Post by bltn »

Toons wrote: Sat Oct 26, 2019 6:55 pm Live beneath your means,
Stay out of debt,
Save
Invest
Index funds...

No need to charge for that
:mrgreen:
Simple is better.
Those five rules will make you wealthy. After a late start, I began to implement number five, and about a dozen years ago I realized because of indexing and dollar cost averaging I might be able to retire. But I decided to continue my work and see where that oath led. Continued work in a job you like has many rewards.
bltn
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Re: Do You Pay For Financial Advice?

Post by bltn »

The only financial advice I ve paid for is tax advice from my accountant every few years, in addition to my tax preparation.
I ve gotten free advice from Vanguard which has been thought provoking and occasionally useful.
Sophia1884
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Re: Do You Pay For Financial Advice?

Post by Sophia1884 »

NotWhoYouThink wrote: Sat Oct 26, 2019 2:06 pm

Someone whose main skill is sales and client retention won't be able to help you with your college/Roth/Tax questions, for .30, .40, or 1.75% Not the right skill set. So don't pay anyone to manage your investments if you can do it yourself.

A one time hourly-fee advisor, who does not propose to manage your investment, might be of some help. People on this board can certainly help. But the person who charges to manage investments won't have the analysis skills to answer the questions you have.
So, if one was interested in developing the mentioned analysis skills, what types of courses/books would they start with? I have the basic knowledge of investment management and most of my questions have been answered here but if I wanted to learn about coordinating Roth conversions, tax optimization, what to do when...where would I go to learn? What's the starting point?
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ruralavalon
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Re: Do You Pay For Financial Advice?

Post by ruralavalon »

Sophia1884 wrote: Mon Oct 28, 2019 2:28 pm
NotWhoYouThink wrote: Sat Oct 26, 2019 2:06 pm

Someone whose main skill is sales and client retention won't be able to help you with your college/Roth/Tax questions, for .30, .40, or 1.75% Not the right skill set. So don't pay anyone to manage your investments if you can do it yourself.

A one time hourly-fee advisor, who does not propose to manage your investment, might be of some help. People on this board can certainly help. But the person who charges to manage investments won't have the analysis skills to answer the questions you have.
So, if one was interested in developing the mentioned analysis skills, what types of courses/books would they start with? I have the basic knowledge of investment management and most of my questions have been answered here but if I wanted to learn about coordinating Roth conversions, tax optimization, what to do when...where would I go to learn? What's the starting point?
Wiki article, "Tax-efficient fund placement".

Wiki article, "Roth IRA conversions".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Sophia1884
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Re: Do You Pay For Financial Advice?

Post by Sophia1884 »

ruralavalon wrote: Mon Oct 28, 2019 2:55 pm
Sophia1884 wrote: Mon Oct 28, 2019 2:28 pm
NotWhoYouThink wrote: Sat Oct 26, 2019 2:06 pm

Someone whose main skill is sales and client retention won't be able to help you with your college/Roth/Tax questions, for .30, .40, or 1.75% Not the right skill set. So don't pay anyone to manage your investments if you can do it yourself.

A one time hourly-fee advisor, who does not propose to manage your investment, might be of some help. People on this board can certainly help. But the person who charges to manage investments won't have the analysis skills to answer the questions you have.
So, if one was interested in developing the mentioned analysis skills, what types of courses/books would they start with? I have the basic knowledge of investment management and most of my questions have been answered here but if I wanted to learn about coordinating Roth conversions, tax optimization, what to do when...where would I go to learn? What's the starting point?
Wiki article, "Tax-efficient fund placement".

Wiki article, "Roth IRA conversions".
:sharebeer
FIby45
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Re: Do You Pay For Financial Advice?

Post by FIby45 »

I think the value of the advice goes up the more complicated your finances.

I own a business- so there are alot of ways to structure things with significant implications. Alot of it is tax related. Way outside of my base of knowledge.

Same thing with investment properties and accelerated depreciation and such.

I've had someone give me tax advice that saves me $70k/year every year. I paid them $20k.

I've had an advisor get my insurance right reviewing policies and such, get my wills/estate docs set-up etc.

Financial advice is much broader than investment strategy/allocation.

It all comes down to time. If you can make 5x with your time doing something else, then why not pay someone x to save you 2x?
Last edited by FIby45 on Sat Nov 02, 2019 8:13 am, edited 1 time in total.
RetiredArtist
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Re: Do You Pay For Financial Advice?

Post by RetiredArtist »

Most artists understand frugality, but are not conversant with the language of finance.
So over the decades, I had fee-only advisors. I saw them every few years. The last one I worked with was amazing. She didn't just advise; she taught me how to do it myself, at least on an amateur basis. She retired, and now I have this website as a resource. Last December when the market dipped, I was able to TLH some mutual funds, allowing me to sell some overweighted stocks without increasing my taxes.
Thanks again, bogleheads.org--and time for my yearly donation!
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