Financial Advisor / Planner

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
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Finley2021
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Joined: Sun Jul 26, 2020 10:52 pm

Financial Advisor / Planner

Post by Finley2021 » Sat Aug 01, 2020 8:02 am

I just read Bogleheads guide to investing and i know they are not big fans of advisors unless they have been vetted. Can someone please google "Highball Advisors" and let me know what your thoughts are? Fee structure - Qualifications? Yes, I am a railroad professional.

I appreciate the help.

dbr
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Re: Financial Advisor / Planner

Post by dbr » Sat Aug 01, 2020 8:16 am

A 1% fee for assets under management (AUM) falling to 0.5% for accounts over $1M is not a recommended choice. Over time that cost will rob you of a significant fraction of your retirement wealth. To put a number on that, if you take the nominal 4% a year of your portfolio for spending, you will immediately have 25% of your income taken away by your advisor. It is highly likely they will also place you in higher cost investments charging you as much as another 1% in fund costs and tax inefficiency, but you will have to look at see what investments they use. If it is 1%, then you will have paid over half your annual income to your advisor.

For that reason alone I would not go here for advice. I do agree there are special conditions that may apply to Railroad Retirements.

An alternative, if you have to pay for advice, would be to go to Vanguard and sign up for Vanguard Personal Advisory service at 0.3% AUM. A difference is that Vanguard will certainly place you in low cost funds but I doubt have any expertise at all about tax and other specifics that apply to railroad workers. It could also be your union or other sources of advice can be found without signing up for investment fees.

Topic Author
Finley2021
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Re: Financial Advisor / Planner

Post by Finley2021 » Sat Aug 01, 2020 8:22 am

I really appreciate the advice. Thank you

tibbitts
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Re: Financial Advisor / Planner

Post by tibbitts » Sat Aug 01, 2020 8:25 am

Finley2021 wrote:
Sat Aug 01, 2020 8:02 am
I just read Bogleheads guide to investing and i know they are not big fans of advisors unless they have been vetted. Can someone please google "Highball Advisors" and let me know what your thoughts are? Fee structure - Qualifications? Yes, I am a railroad professional.

I appreciate the help.
What would your effective fee percentage be? What services are you hoping to get from them?

I would say that there can be some advantage to speaking to someone, not necessarily an on ongoing basis, who is extremely familiar with a particular retirement program or pension system. You can't get that from a generic adviser like PAS. I'm not qualified to comment on this firm's familiarity with railroad retirement, if that's your primary concern.

sschullo
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Re: Financial Advisor / Planner

Post by sschullo » Sat Aug 01, 2020 9:01 am

Many times asking a bunch of questions backfires because most advisers have heard it all and know how to answer.
Never pay an AUM but by the hour BUT you have take some knowledge and have all of your financial situation organized. If you let an adviser organize it for you, they have a right to charge you for their time.
Hiring an adviser who has been vetted by somebody else saying that the advisers are fee-only fiduciaries is nice but it's still not enough to protect you.

I love what the great mentor to Buffett and many other greats said about financial advice. He devoted an entire chapter in his book, the Intelligent Investor. Many Bogleheads know Ben Graham's tome by heart.

"The great bulk of investors are amateurs. Naturally, they feel that in choosing their securities they can profit by professional guidance. Yet, there are peculiarities inherent in the very concept of investment advice.
If the reason people invest is to make money, then in seeking advice they are asking others to tell them how to make money. That idea has some element of naivete. Businessmen seek professional advice on various elements of their business, but they do not expect to be told how to make a profit. There is their own bailiwick. When they, or nonbusiness people, rely on others to make investment profits for them, they are expecting a kind of result for which there is no true counterpart in ordinary business affairs." Benjamin Graham, page 257.

Bottom line: become a DIY. While there are many factors to consider as this can be complicated, and I may be going out on a limb here, but there is not enough return to stay ahead of inflation and pay investment costs, your employer's third party administer/record keeper fees, taxes, and an AUM/hourly fee for investment advice. DIY investors get better results and low costs without an expensive adviser. My investment costs are .07%, and in this day and age, that is getting expensive!
"When nonbusiness people rely on others to make investment profits for them, they are expecting a kind of result for which there is no true counterpart in ordinary business affairs." | B. Graham

Topic Author
Finley2021
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Re: Financial Advisor / Planner

Post by Finley2021 » Sat Aug 01, 2020 9:12 am

Thank you!

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cinghiale
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Re: Financial Advisor / Planner

Post by cinghiale » Sat Aug 01, 2020 9:19 am

Good post by Steve (sschullo) above. Note his signature line:
When ... nonbusiness people rely on others to make investment profits for them, they are expecting a kind of result for which there is no true counterpart in ordinary business affairs." | B. Graham
Apropos that quote, I posted the following back in 2017 and think it’s worth reviving:

“Jack Bogle is credited for pointing out that the expertise needed for so many other professions simply doesn't translate into the management of finances. We want-- heck, we demand-- expertise from those who perform our surgeries and fly our airplanes. We have a clear understanding that the effortless golf swing of a pro or a gorgeous piano rendition of a Beethoven sonata comes with thousands of hours of practice (and, per Kahneman, a shift from "thinking slow" to "thinking fast"). Put in the time, put in the hours, learn the tools and techniques, and gain expertise.

“But that does not translate to ‘learning’ how grasp the collective decisions of millions and managing money accordingly. One recent poster quipped that ‘Economics is History pretending to be Physics.’ That's a great line.

“Let me add the Cinghiale Postulate: ‘Financial advisers and brokers are chauffeurs pretending to be mechanics.’ They claim to have intimate knowledge of the workings of the vehicle, and they tell you that they can fine tune it to purr like a kitten. But, in fact, all they can do is take your place in the driver's seat and do something you are perfectly capable of doing yourself.

“This sets the benefits of low fees, low expenses, low turnover, and full market participation through index funds into bold relief. And, in comparison with high fees, high expenses, high turnover, tax inefficiency, performance chasing, and mediocre performance, it ends up looking too good to be true.“
"We don't see things as they are; we see them as we are." Anais Nin | | "Sometimes the first duty of intelligent men is the restatement of the obvious." George Orwell

Topic Author
Finley2021
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Joined: Sun Jul 26, 2020 10:52 pm

Re: Financial Advisor / Planner

Post by Finley2021 » Sat Aug 01, 2020 9:22 am

Thanks again, I have some reading to do.

pkcrafter
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Re: Financial Advisor / Planner

Post by pkcrafter » Sat Aug 01, 2020 1:21 pm

Highball fees

................................Highball Limited ............................Highball Special
Annual Fee up to $1m managed and 0.5% for over $1m......1% up to $1m managed and 0.5% for over $1m

Advisor - John McNamara CPRC (non accredited)

https://www.finra.org/investors/profess ... tions/cprc

Used to work for Edward Jones.





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.

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