considering hiring a fee only planner. I'm I carzy?

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bagels95
Posts: 32
Joined: Mon Feb 26, 2007 9:02 pm

considering hiring a fee only planner. I'm I carzy?

Post by bagels95 »

Over the years I have gotten weary trying to get ahead using the market to invest for retirement. Don't get me wrong. Long term it's still the best game in town for the average Joe. I have gone by the book using boglehead advice. I have an investment plan and have stuck with it even over the roller coaster rides of the dot. com meltdown and now the housing meltdown which on both occasions threw the markets into a tailspin.

In my opinion the average investor has gotten nothing but a screwing for being a disciplined buy and hold, rebalancing, investor. Unfortunately for myself I didn't have the means to invest between 1980 and 1990. I probably wouldn't be as worried about ever retiring if I had.

Even though I'm complaining I've managed to save about 350,000 towards retirement. That's probably about what I've contributed over the last 11 years. In other words I've lost money if inflation is factored in.
I'm 51 years old now and feel I well need to work enough and invest enough to somehow triple the 350,000.00 to enjoy retirement. If it wasn't for the lost decade I think I would easily have 600,000.00 saved based on historic returns. Would've, could've, should've right. My point of this post is not to wine and complain. Many of us are in the same boat or worse. My real question to all of you is does it make sense to hire a fee only planner.

I found a local fee only planner that charges 2% per year. Is that the going rate? On a 350,000.00 portfolio that would come to 7000.00 per year. 70,000.00 over the next 10 years. This would be to set up my portfolio based on my risk tolerance and make changes over time based on market conditions. In other words manage my money not just put it into an in house fund with a front or back end load, like Merrill Lynch, Dean Witter, or other Brokerage firms do.

My other worry based on listening to his radio program is he is very freaked out about the current administration and claims they are going to destroy our economy hence investing in the US market. His current strategy he seems to be touting on his program is set up a portfolio in a defensive mode until after the November elections. He wants to watch and see if the house looses enough Democratic seats so that it is no longer 1 party rule. After that time he will change strategy based on the outcome one way or the other.

Currently he says investors should be heavy in tips because inflation is definitely coming. He also says asset based investing is out for right now and an investor must chose certain sectors within each asset class in order to make money. He says every good investment strategy must also have a good exit strategy. He has always been an asset class investor in the past. He has always touted index funds from Vanguard and also T. Rowe Price. Recently I must admit he has me thinking. I must also admit my disciplined buy and hold stick to my guns investing has not earned me any return in 11 years of investing.

Possibly I should submit my current portfolio on this board and put it up for Boglehead scrutiny. I'm in the process of re-balancing and adding 2010 IRA contributions and should maybe rethink my current strategies? To go with a fee based planner that charges 2% of 350,000.00, in my mind would mean I would be putting a bet that he could better my investing ability by more than 7,000.00 per year to make it worth it. Possibly I can just get some consultation advice to set up my portfolio for a reasonable fee and continue to manage it myself. Any suggestions would be very helpful. Thank you in advance for any responses.

Wayne
livesoft
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Post by livesoft »

You are crazy if you are going to pay 2% AUM (assets under management). Keep looking.
tibbitts
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Post by tibbitts »

Yes, you're crazy.

Almost everybody on this forum, except those already retired or otherwise having a very conservative allocation, has lost over the past decade. The only difference with your planner would have been that you would probably have lost 2% more per year, at least.

Paul
Topic Author
bagels95
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Joined: Mon Feb 26, 2007 9:02 pm

What is the going rate

Post by bagels95 »

What is a reasonable rate. Possibly I can hear the man out. The consultation/sales appointment is free. Possibly I can work out a deal to have him reconstruct my portfolio
Sidney
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Post by Sidney »

Are you looking for someone to reconstruct your portfolio or manage your money? Those are two different jobs.
I always wanted to be a procrastinator.
Erwin
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Post by Erwin »

Check Steven Evanson. He has been reviewed in this forum and is considered a top financial advisor. Further his fees are extremely resonable, around 0.25% and he only uses passive investments. Google him, call him, write to him, etc. You will like him. Good luck!
Erwin
chaz
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Post by chaz »

To reconstruct your portfolio, read the wiki on this forum.

Then call Vanguard for advice.

Good luck.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
TheEternalVortex
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Post by TheEternalVortex »

I wouldn't pay anyone that charged based on AUM. Instead go for someone that charges by the hour.
kenbrumy
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Re: considering hiring a fee only planner. I'm I carzy?

Post by kenbrumy »

bagels95 wrote:I found a local fee only planner that charges 2% per year.
This is not a "fee only planner." This is almost the worst sort of blood sucker that tries to pass himself off as a "financial planner." Do be worse he'd have to be recommending annuities.

A fee only planner will charge you an initial consultation fee and follow up fees based on the level of service you are requesting. Their rates vary widely. Unless you have a complicated financial situation, they aren't worth the money if you have enough smarts and interest to find this forum.

Be very skeptical of people on the radio. They are buying their spot to try to reel in new clients.

Read and educate yourself. Be your own planner. No one can predict the future. Occasionally, someone is "right" but this is a random event not likely to be repeated.

There are many "FP's" that are feeding the feelings of fear and despair with the current political and economic situation. They will be happy to take your money.
Last edited by kenbrumy on Fri Jan 29, 2010 11:54 am, edited 1 time in total.
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brick-house
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Post by brick-house »

bagels95 wrote:
I found a local fee only planner that charges 2% per year. Is that the going rate? On a 350,000.00 portfolio that would come to 7000.00 per year. 70,000.00 over the next 10 years. This would be to set up my portfolio based on my risk tolerance and make changes over time based on market conditions. In other words manage my money not just put it into an in house fund with a front or back end load, like Merrill Lynch, Dean Witter, or other Brokerage firms do.
Not crazy to seek investment guidance, however 2% is highway robbery. $7000 annual charge if compounded at 4% for ten years is $87,404. Pretty hefty price for asset allocation, mutual fund/etf selection, and re-balancing.

Plus, if your portfolio grows to $700,000; this "investment professional" is now charging $14,000 per year. If your portfolio loses value, he is still charging 2%.
You don't need no gypsy to tell you why- Greg Allman
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HomerJ
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Post by HomerJ »

Tripling your money shouldn't be too hard... as long as you can keep saving... If you saved $350,000 in the last 11 years, can you save that much again? There, you've doubled your money... Now you only need about a 6% average gain over those 11 years to make the third $350,000

That gets you just over a million at 62... Not too shabby...

Paying someone 2% is insane... Now you have to make 8% to make your goals... The odds are very much against him beating the market by more than 2% for 11 years... There's a handful of people who have done it...

Just go 60% Total Bond Market / 40% Total Stock Market and save like crazy... You need every % you can get... Pay the 0.20% fees to Vanguard, and keep the 1.8% for yourself...

Read The Four Pillars of Investing... Very fun read, lots of stuff about past bubbles.
tiochfaidh_ar_la
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Post by tiochfaidh_ar_la »

God forbid that anyone point out the OP would have been better off in annuities the whole time.

Instead, we're going to recommend an asset allocation of 100 percent risky investments to a guy who has just told us he's tired of the downside of Boglehead-style investing?

Guys... this stuff works for institutions. It works for young people with long time horizons who don't care about eating a 40% loss in a bear market. It doesn't necessarily work for the risk-averse and people who have, you know, life-cycles.

Bagels95 is seeing through the BS and he's being dragged back into the crab-barrel.

That said... I agree with other posters here: 2% is too pricey for this kind of thing. I'd also beware of trying to time markets based on results of midterm elections. It's just not something any advisor can reliably do, IMO.
GammaPoint
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Post by GammaPoint »

2% is a ton of money to obtain a political idealogue as an investment manager. That's half of your safe withdrawal rate in retirement.
tiochfaidh_ar_la
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Post by tiochfaidh_ar_la »

Bear in mind if he's charging you 2% to put money in TIPS, he's charging you most of the income your TIPS are generating.

2% in a low interest rate environment - or 1% for that matter, is a much bigger chunk of your eventual returns than the same AUM fee in a high interest rate environment.
tiochfaidh_ar_la
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Post by tiochfaidh_ar_la »

Oh dear. Are we still pretending that 4% is a "safe withdrawal rate?"
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Rusa
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Post by Rusa »

We've had a fee-only advisor for over 15 years (1.5%). He has tried every different type of strategy except indexing, and he has made a return for us of.....1%. We coulda done better buying CDs. (I'm going to meet with him next week and either fire him or negotiate an hourly rate with a yearly cap.) I'm planning on going into indexing b/c at least we will match the market (I hope!).

So don't think your advisor is going to come up with some "magic plan" that will get you any decent returns.
Rusa
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bottlecap
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Post by bottlecap »

2% on a conservative portfolio will net you maybe 1% after inflation. That's not good.

Don't listen to the scare tactics about politics and economics he's using either - that's another red flag that you don't want this guy making decisions for you. Things almost always look bad if you look hard enough.

Good luck,

JT
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rcshouldis
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Re: considering hiring a fee only planner. I'm I carzy?

Post by rcshouldis »

bagels95 wrote:Over the years I have gotten weary trying to get ahead using the market to invest for retirement. Don't get me wrong. Long term it's still the best game in town for the average Joe. I have gone by the book using boglehead advice. I have an investment plan and have stuck with it even over the roller coaster rides of the dot. com meltdown and now the housing meltdown which on both occasions threw the markets into a tailspin.

In my opinion the average investor has gotten nothing but a screwing for being a disciplined buy and hold, rebalancing, investor. Unfortunately for myself I didn't have the means to invest between 1980 and 1990. I probably wouldn't be as worried about ever retiring if I had.

Even though I'm complaining I've managed to save about 350,000 towards retirement. That's probably about what I've contributed over the last 11 years. In other words I've lost money if inflation is factored in.
I'm 51 years old now and feel I well need to work enough and invest enough to somehow triple the 350,000.00 to enjoy retirement. If it wasn't for the lost decade I think I would easily have 600,000.00 saved based on historic returns. Would've, could've, should've right. My point of this post is not to wine and complain. Many of us are in the same boat or worse. My real question to all of you is does it make sense to hire a fee only planner.

I found a local fee only planner that charges 2% per year. Is that the going rate? On a 350,000.00 portfolio that would come to 7000.00 per year. 70,000.00 over the next 10 years. This would be to set up my portfolio based on my risk tolerance and make changes over time based on market conditions. In other words manage my money not just put it into an in house fund with a front or back end load, like Merrill Lynch, Dean Witter, or other Brokerage firms do.

My other worry based on listening to his radio program is he is very freaked out about the current administration and claims they are going to destroy our economy hence investing in the US market. His current strategy he seems to be touting on his program is set up a portfolio in a defensive mode until after the November elections. He wants to watch and see if the house looses enough Democratic seats so that it is no longer 1 party rule. After that time he will change strategy based on the outcome one way or the other.

Currently he says investors should be heavy in tips because inflation is definitely coming. He also says asset based investing is out for right now and an investor must chose certain sectors within each asset class in order to make money. He says every good investment strategy must also have a good exit strategy. He has always been an asset class investor in the past. He has always touted index funds from Vanguard and also T. Rowe Price. Recently I must admit he has me thinking. I must also admit my disciplined buy and hold stick to my guns investing has not earned me any return in 11 years of investing.

Possibly I should submit my current portfolio on this board and put it up for Boglehead scrutiny. I'm in the process of re-balancing and adding 2010 IRA contributions and should maybe rethink my current strategies? To go with a fee based planner that charges 2% of 350,000.00, in my mind would mean I would be putting a bet that he could better my investing ability by more than 7,000.00 per year to make it worth it. Possibly I can just get some consultation advice to set up my portfolio for a reasonable fee and continue to manage it myself. Any suggestions would be very helpful. Thank you in advance for any responses.

Wayne
It sound to me that this advisor or whatever they call him is peddling fear and is a typical con. I would not hire an advisor if the main reason is political or ideological leanings. Ideally , I would want some good solid statistical academic data suggesting that the advisers methodology accurately reflects investment risk considerations and personal tolerance to risk. They can keep their politics out of my investment plan as far as I am concerned.
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speedbump101
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Post by speedbump101 »

If I were in your situation I'd hire one guy on an hourly rate to set up your plan... review tax issues etc... and another one to actually manage your portfolio...

There are guys in here who do just that... One hourly advisor, a CPA, charges in the order of $300 per hour to set things up (one time cost), the other advisor will manage your portfolio for 0.25% AUM, with a reasonable yearly minimum.

If you're going down the hiring an advisor path I think this approach makes more sense than paying someone a 2% of AUM going forward.

Edit: I'm not suggesting that you need to do this, I'm just saying that if you are definitely convinced that you need a manager this is what I'd do... Deciding whether you need an advisor or not is your decision alone!

SB...
Last edited by speedbump101 on Fri Jan 29, 2010 12:54 pm, edited 1 time in total.
"Man is not a rational animal, he is a rationalizing animal" -Robert A. Heinlein
leonard
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Post by leonard »

AUM fees or hourly based fees cover the cost side. What exactly is the upside or benefit of employing a manager that will be realized for these costs? I haven't heard the OP say how a manager would address the "problem" of underperformance. I haven't seen a single argument from the OP articulating exactly what benefit he is going to see from this management and why going forward he expects a manager to do better than buy and hold.

This feels like trying to "do something" without a clear plan and reasons why "something" would even work.

EDIT: Sometimes the best you can do with investment returns isn't that great. Sometimes there are periods were investments don't perform well. But, that is one of the risks for which you are being compensated by investing in the first place.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
Dagwood
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Post by Dagwood »

No, you are not crazy (but run spell check on your thread titles). I think that if you want financial advice and are willing to pay, it is better to have the fee disclosed so that the advisor is being compensated transparently instead of hiding the compensation by selling you crappy investments that pay him a larger commission. While the general sense here is to do things yourself, and that is the approach I take, some people want guidance and you're an adult and that's your decision.

That being said, the fee is too high here, by a large margin.
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jmourik
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Post by jmourik »

For that 2% fee I'd want a guarantee he'll beat the market by at least 3% :-) What is his track record anyway? He must have *LOTS* of client referrals to charge that kind of money.
I'd rather look at MarketRiders.com or AssetBuilder.com instead...
JD
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Re: What is the going rate

Post by JD »

bagels95 wrote:What is a reasonable rate. Possibly I can hear the man out. The consultation/sales appointment is free. Possibly I can work out a deal to have him reconstruct my portfolio
In the mid 90’s, I had the same concerns and was not sure about our portfolio. I checked several financial planners and chose one in our area.
We filled out questionnaires and sent him copies of the financial and brokerage statements. We met with him for the initial consultation and one follow up meeting.
The meeting with him went fine, he checked the mutual funds and the stocks we had. After he looked into the portfolio, he commented that all the mutual funds that we owned were excellent choices, however, he advised us to sell all the stocks unless there was a good reason to keep. I remembered that he mentioned that we could manage it ourselves or let him manage it if we needed or just have a yearly check up with a flat hourly rate. All in all, it was a good experience but not of great value, at least for us. We came to the conclusion that we needed to go the “simple route” as most folks here usually say: Keep it simple. We are not there yet but working on it. You will get the same advice as the FP would provide or in some cases better on this forum.

Hope this of any help to you and good luck.
freebeer
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Post by freebeer »

rrosenkoetter wrote:... Pay the 0.20% fees to Vanguard, and keep the 1.8% for yourself...
I agree w/ rrosenkoetter's comments but it's more like "Pay the 0.20% fees to Vanguard, keep the 2% plus the difference between 0.20% and the more expensive funds that this parasite would undoubtedly have put you in".
JW-Retired
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Post by JW-Retired »

bagels95 wrote: I found a local fee only planner that charges 2% per year. Is that the going rate? On a 350,000.00 portfolio that would come to 7000.00 per year.
This guy is putting us on. He's a troll.
JW
Topic Author
bagels95
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Thank you so much for all the replies

Post by bagels95 »

My main point for posting the subject about fee only planners was I had no idea what the norm is for getting their assistance. I do know that over the years many threads always recommended fee only planers over brokerage houses. Mainly because brokerage houses hammer you with in house funds that contain loads. So like many of the above posters, I was also blown away to find out a fee only planner could cost as much as 2% each year. Based on past threads fee only was the way to go if not doing the investing yourself. I'm grateful above posters have shown other options to consider. The .25% planner or one in that price range sounds much more reasonable if I decide to forgo doing my own investing.

After doing investing myself 11 years now and reading most the books recommended by this forum and Vanguard Diehards forum, I would find it very difficult to completely hand over my portfolio to someone to manage. Especially if there were no guarantees, which I'm sure there are not. One thing I think a lot about is, the last 10 years aren't really covered in most books. They are based on past history, but not current history. This current downturn was caused by giving out loans to those that can't afford them. It seems to be deep reaching and in my opinion will continue to effect our economy for a long time. Time will tell if the corrections made so far will repair the damage. Many say we avoided a depression. Who is to say. All we can base investing on is history. Unfortunately the current situation has not happened in this country to know for sure how to fix it. Who can blame any investor for thinking about throwing in the towel after what the market has given us over the last decade.

I suppose this is what worries me most about staying the course over the next 10 or more years. Even though I have learned no investing comes without risk, which risk do I take? Also will all this risk I keep taking ever pay off? If I invest defensively I may not make enough returns on my money to retire, that's one risk. If I continue taking on more risk in order to get higher returns I may reach my goal. However, I also risk losing a huge amount of my portfolio and not having enough time left in my investing life to recover. I have demonstrated to myself I have the stomach for risk. I have stuck with my investment strategy through both recessions. It's just hard to know if the strategies of the past will be effective in the future.

Anyway thanks again for all the replies. I now have plenty of other options to consider before deciding how to continue in my investment journey. By the way, the 2% financial planner will definitely not by an option thanks to your replies

Wayne
Topic Author
bagels95
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JW

Post by bagels95 »

JW Nearly Retired wrote:
bagels95 wrote: I found a local fee only planner that charges 2% per year. Is that the going rate? On a 350,000.00 portfolio that would come to 7000.00 per year.
This guy is putting us on. He's a troll.
JW
I'm not a troll. Just an investor considering changing investing choices after 11 years of no returns on my money. If you don't believe me I'll be More than happy to provide you with the Phone number and the name of his business. I'm not sure if I'm allowed to do that on this forum. If I am let me know and I'll surely provide it. Also if you live in the North Florida area you can listen to his program any Saturday beginning at 10:00 am. He takes callers by the way. Stereo AM 690.

Wayne
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Taz
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Post by Taz »

Bagels is on the up&up. I listen ocasionally. Tends to steer people on the radio to Oakmark funds. Program includes commentary with a very conservative spin. See 105.3 (radiojax.com) for the opposite view (no investing shows). To each their own.

Bagels95. I met a Jax area fee-only planner (edit: NOT affliated with the radio show person) at a friend's cookout who seemed level-headed & knowledgeable. Once I found out what she did, I wanted to talk about index investing, bogleheads, and getting ripped off by advisors. I had to do an internet search to find the company so she was definitely not trying to gather business. I thought that was refreshing. As I'm comfortable with my current approach & complexity, I had no interest in hiring her. If you desire the name & company, please PM me.

Cheeers - Taz
Last edited by Taz on Sat Jan 30, 2010 1:53 pm, edited 1 time in total.
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amp
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Post by amp »

Okay, I know nothing about this advisor, but based on the information you provided, I did a little online sleuthing.

In an article dated March 4, 2009, he is said to have moved his clients "toward cash, treasury bills and other safe havens." He was also quoted as saying:
We've gone totally defensive for the entire firm.
So, he apparently has missed the entire market recovery over the final three-quarters of last year. I wonder how his current clients feel about him right now. Is this really who you want to be managing your asset allocation?
tibbitts
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Re: Thank you so much for all the replies

Post by tibbitts »

bagels95 wrote:My main point for posting the subject about fee only planners was I had no idea what the norm is for getting their assistance. I do know that over the years many threads always recommended fee only planers over brokerage houses. Mainly because brokerage houses hammer you with in house funds that contain loads. So like many of the above posters, I was also blown away to find out a fee only planner could cost as much as 2% each year. Based on past threads fee only was the way to go if not doing the investing yourself. I'm grateful above posters have shown other options to consider. The .25% planner or one in that price range sounds much more reasonable if I decide to forgo doing my own investing.

After doing investing myself 11 years now and reading most the books recommended by this forum and Vanguard Diehards forum, I would find it very difficult to completely hand over my portfolio to someone to manage. Especially if there were no guarantees, which I'm sure there are not. One thing I think a lot about is, the last 10 years aren't really covered in most books. They are based on past history, but not current history. This current downturn was caused by giving out loans to those that can't afford them. It seems to be deep reaching and in my opinion will continue to effect our economy for a long time. Time will tell if the corrections made so far will repair the damage. Many say we avoided a depression. Who is to say. All we can base investing on is history. Unfortunately the current situation has not happened in this country to know for sure how to fix it. Who can blame any investor for thinking about throwing in the towel after what the market has given us over the last decade.

I suppose this is what worries me most about staying the course over the next 10 or more years. Even though I have learned no investing comes without risk, which risk do I take? Also will all this risk I keep taking ever pay off? If I invest defensively I may not make enough returns on my money to retire, that's one risk. If I continue taking on more risk in order to get higher returns I may reach my goal. However, I also risk losing a huge amount of my portfolio and not having enough time left in my investing life to recover. I have demonstrated to myself I have the stomach for risk. I have stuck with my investment strategy through both recessions. It's just hard to know if the strategies of the past will be effective in the future.

Anyway thanks again for all the replies. I now have plenty of other options to consider before deciding how to continue in my investment journey. By the way, the 2% financial planner will definitely not by an option thanks to your replies

Wayne
What I don't understand about your post is that you've already demonstrated the ability to do the one and only thing that many people feel a planner can help with: stay the course. So I don't understand what value you believe the planner is going to add.

It's very possible that there will be no positive returns from equities or bonds or cash for many decades to come. It's probably more likely that returns from all asset classes will be very low for many decades, meaning that the amount you lose to a planner's fee will be very difficult to earn back. Planners prospered in an era when returns were ten percent, and most people neither noticed nor cared if a percent or two got shaved off that. If returns are 2% for a few decades, I'm not sure the planner model (and fees) will hold up. I think there are two possibilities. One is that planners may fade away due to their fees consuming all investment profits. The other is that buy-and-hold will indeed come to be viewed by almost everyone as a losing strategy (which by definition it would be after enough consecutive decades of losses), and therefore active investors will be the only successful investors (however small a minority they may be.) In that environment people may accept that they have to swing for the fences and and hope they'll be in the 10% or whatever of people who do make money from investments. People may seek out planners even more enthusiastically in the hopes of being in that 10%.

Paul
jegallup
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Post by jegallup »

amp wrote:Okay, I know nothing about this advisor, but based on the information you provided, I did a little online sleuthing.

In an article dated March 4, 2009, he is said to have moved his clients "toward cash, treasury bills and other safe havens." He was also quoted as saying:
We've gone totally defensive for the entire firm.
So, he apparently has missed the entire market recovery over the final three-quarters of last year. I wonder how his current clients feel about him right now. Is this really who you want to be managing your asset allocation?
One of the many reasons this forum is so valuable....
freebeer
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Re: Thank you so much for all the replies

Post by freebeer »

tibbitts wrote:... I don't understand what value you believe the planner is going to add...people may accept that they have to swing for the fences and and hope they'll be in the 10% or whatever of people who do make money from investments. People may seek out planners even more enthusiastically in the hopes of being in that 10%.
Paul, you answered your own question. The OP is panicked and susceptible (as we humans are wired to be) to someone offering him hope. It is not rational, but if rationality were prevalent, casinos and crystal therapists would be out of business, and Madoff never would have been in business.

Greed plays a role. "You can't con an honest man" remains a truism. I'm not suggesting the OP is greedy or dishonest per se, only that there is magical thinking in the grasping at straws.

Now, if one really wanted to go "double or nothing" with their money, say calculating that they'd be better off with 50% chance of 0 dollars (maybe just Soc Sec) and 50% chance of $2X, vs. the $X they are likely to have with rational savings & investing, I don't think that's necessarily irrational. But in that case the right approach is not a long-term pattern of high-load investing - that's like making a lot of small bets at a casino, which pretty much guarantees you'll be worse off. The best strategy in that case would be to wait until retirement and then make one risky bet (whether in the market or at a casino).

Alternatively, just take the $X that you have at retirement and spend as if you had $2X. That gives you two ways to win: your investments pay off unexpectedly favorably, or you die early.

Of course for most people annuitizing would actually be the way to go.
Topic Author
bagels95
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Great research Jegallup

Post by bagels95 »

jegallup wrote:
amp wrote:Okay, I know nothing about this advisor, but based on the information you provided, I did a little online sleuthing.

In an article dated March 4, 2009, he is said to have moved his clients "toward cash, treasury bills and other safe havens." He was also quoted as saying:
We've gone totally defensive for the entire firm.
So, he apparently has missed the entire market recovery over the final three-quarters of last year. I wonder how his current clients feel about him right now. Is this really who you want to be managing your asset allocation?
One of the many reasons this forum is so valuable....

I had no idea he had been touting the defensive mode thing since March/09. I'm very happy I stayed the course. If I would have thrown in the towel and hired him after watching my portfolio go down 40%. I then would have missed the rebound last year totally. The only way he could turn out to be right is for the market to drop back to 2008 levels. It could happen but I wouldn't want to put my money on it.

Yes Jegallup, This forum is valuable. I've only recently posted the last couple of days which I guess is why one poster called me a troll. There are two reasons for that. First before I did something crazy like give a financial planner who practices market timing based on politics my money I came here. You people have gave me alternatives to consider and kept me from making a bad situation worse. The other reason I rarely post here is it helps me stay the course. I made my investment plan years ago with help from Vanguard Diehards. I find it easier to stick to if I ignore constantly reading this and other boards. To much financial advice seems to make me second guess myself and tempts me to make changes. In other words by not constantly participating makes investing easier for me because I stick to my plan.

Free beer, I also agree with rrosenkoetter above. To me this seems to be the best advice. "Tripling your money shouldn't be too hard... as long as you can keep saving... If you saved $350,000 in the last 11 years, can you save that much again? There, you've doubled your money... Now you only need about a 6% average gain over those 11 years to make the third $350,000

That gets you just over a million at 62... Not too shabby... "



This to me sounds calming and sensible. With this advice I can lower my current risk, save like hell, and possibly even retire in a little over a decade. If there is one thing I'm good at it is saving money. I have put myself and family in the position where we owe nothing to anyone including banks. Total family income is only around 75K each year but We manage to save over 1/3 of that money each year. I just hope I can manage a 6% return. After the last decade I'm not sure that's even possible. Thanks again everyone.

Wayne
555
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Joined: Thu Dec 24, 2009 7:21 am

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Post by 555 »

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Last edited by 555 on Fri Mar 26, 2010 12:48 am, edited 2 times in total.
dbr
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Re: Thank you so much for all the replies

Post by dbr »

555 wrote:That is unbelievably cruel and callous. You are essentially saying all crime victims bring it upon themselves and deserve what they get.
freebeer wrote:"You can't con an honest man" remains a truism. .
Honest people get conned all the time because they are uninformed, or because they are no longer competent to manage their affairs, or because they are deceived by their relationship with a group or person that somehow disguises what greed or dishonesty might be involved.
YDNAL
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Re: considering hiring a fee only planner. I'm I carzy?

Post by YDNAL »

bagels95 wrote:Even though I'm complaining I've managed to save about 350,000 towards retirement. That's probably about what I've contributed over the last 11 years. In other words I've lost money if inflation is factored in.
I'm 51 years old now and feel I well need to work enough and invest enough to somehow triple the 350,000.00 to enjoy retirement. If it wasn't for the lost decade I think I would easily have 600,000.00 saved based on historic returns. Would've, could've, should've right. My point of this post is not to wine and complain. Many of us are in the same boat or worse. My real question to all of you is does it make sense to hire a fee only planner.

I found a local fee only planner that charges 2% per year. Is that the going rate?
Wayne,

I didn't read through the responses, so bear with me if this is already discussed.

Retirement Saving is quite simple:
1) Savings Rate. You appear to be good at that ($350K / 11 = $31.8K).
2) Asset Allocation (stock/bond splt). Control risk and invest according to NEED and ABILITY for risk.
3) Watch-out for cost and taxes.
4) Diversify globally.
5) Rebalance - use new money to do the heavy lifting.

You don't need an advisor to take 2% of your money. BTW, I think you are carzy if you do. :)
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
JW-Retired
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Post by JW-Retired »

bagels95 wrote: I've only recently posted the last couple of days which I guess is why one poster called me a troll.
Sorry, I was mis-reading something into your first two posts that made me think you were shilling for the planner.

Now I think you were only temporarily nuts to be thinking of giving away 2%/year to the guy. Great you have come to your senses.
JW
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1210sda
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Post by 1210sda »

I went to their website. Learned that they are "fee BASED", not "fee ONLY".

They are CFP's and licensed insurance agents.

Also, I could not find them registered as RIA's. www.adviserinfo.sec.gov

maybe they are registered with the state of Florida (???)

Good luck.

1210
Topic Author
bagels95
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Post by bagels95 »

JW Nearly Retired wrote:
bagels95 wrote: I've only recently posted the last couple of days which I guess is why one poster called me a troll.
Sorry, I was mis-reading something into your first two posts that made me think you were shilling for the planner.

Now I think you were only temporarily nuts to be thinking of giving away 2%/year to the guy. Great you have come to your senses.
JW
No harm JW. I've been called worse. Actually I got a laugh out of it in all the seriousness of this tread and its replies. My work hasn't ended yet. Now I need to revise the risk I'm taking. If the market heads South again, I don't want to watch my portfolio go down as far as it did the last time. I probably will be posting my current portfolio in another thread looking for help in that area. Feel free to help.

Wayne
bb
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Post by bb »

If this advisor is so good at predicting the future what does he need
your money for?
grumpyretiree
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Location: Midwest

Fee only planner

Post by grumpyretiree »

I was in the same position as you about a year ago, using a fee-only investment/financial advisor that charged $5,000 per year on a $650,000 plus rollover IRA. Based on the advice I got here, I did some studying on my own, and have been managing the money myself since the beginning of the year. Quite honestly I am not sleeping all that well with this decision, but have decided that the $5,000 per year is something I can't afford. I am only 63, with no family at all, and this money is all I have.

My advice is that the 2% fee is very excessive, and that you can probably find a qualified advisor if you take a little time to do some looking, and for a lot less than 2%. I would also recommend getting an advisor that charges by the hour.

Good luck.
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rcshouldis
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Re: Thank you so much for all the replies

Post by rcshouldis »

555 wrote:That is unbelievably cruel and callous. You are essentially saying all crime victims bring it upon themselves and deserve what they get.
freebeer wrote:"You can't con an honest man" remains a truism. .
I have never seen a generation more full of devils advocates who are more willing to blame those who are victimized rather than the perpetrators. Make one wonder who the real devils are.
junior
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Re: considering hiring a fee only planner. I'm I carzy?

Post by junior »

bagels95 wrote: My other worry based on listening to his radio program is he is very freaked out about the current administration and claims they are going to destroy our economy hence investing in the US market. His current strategy he seems to be touting on his program is set up a portfolio in a defensive mode until after the November elections. He wants to watch and see if the house looses enough Democratic seats so that it is no longer 1 party rule. After that time he will change strategy based on the outcome one way or the other.

Wayne
Wayne, one or more of the investment advisers who post on this forum appear to be on the political right.

As far as I know, they have NEVER suggested timing based on elections.

They operate based on market history and statistics.

You are in danger of doing something very stupid. Beware.
leonard
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Post by leonard »

bagels95 wrote:If the market heads South again, I don't want to watch my portfolio go down as far as it did the last time.
I think it will be critical for you to get your bond/stock ratio right, so that you don't panic sell if the market goes down again by 40-50%.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
Laura
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Joined: Mon Feb 19, 2007 7:40 pm

Portfolio

Post by Laura »

You wrote
Possibly I should submit my current portfolio on this board and put it up for Boglehead scrutiny.
I think that is an excellent idea. Show us what you already have and settle on a risk level that translates into an asset allocation you can live with. We can save you the money and help you build a low cost, tax efficient, broadly diversified portfolio. You can do this yourself as well or better than anyone else. You can easily set this up so you only need to look once a year.

Your savings rate is the key factor when combined with your asset allocation. Studies have shown that 90% of your return comes from your asset allocation and not from the actual funds you select. Only you can settle on an asset allocation since this is a very personal decision. Why pay someone to do something you will end up doing for yourself?

Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.
Topic Author
bagels95
Posts: 32
Joined: Mon Feb 26, 2007 9:02 pm

Re: Portfolio

Post by bagels95 »

Laura wrote:You wrote
Possibly I should submit my current portfolio on this board and put it up for Boglehead scrutiny.
I think that is an excellent idea. Show us what you already have and settle on a risk level that translates into an asset allocation you can live with. We can save you the money and help you build a low cost, tax efficient, broadly diversified portfolio. You can do this yourself as well or better than anyone else. You can easily set this up so you only need to look once a year.

Your savings rate is the key factor when combined with your asset allocation. Studies have shown that 90% of your return comes from your asset allocation and not from the actual funds you select. Only you can settle on an asset allocation since this is a very personal decision. Why pay someone to do something you will end up doing for yourself?

Laura

Laura,
I agree with you. I have already taken steps towards doing this. I called early Monday and canceled my appointment with the financial planner. I am now focused on gathering information and will be posting my portfolio soon. It will be a new thread. All help you and this forum can provide will be appreciated.

Wayne
sirocco
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Re: considering hiring a fee only planner. I'm I carzy?

Post by sirocco »

junior wrote:
bagels95 wrote: My other worry based on listening to his radio program is he is very freaked out about the current administration and claims they are going to destroy our economy hence investing in the US market. His current strategy he seems to be touting on his program is set up a portfolio in a defensive mode until after the November elections. He wants to watch and see if the house looses enough Democratic seats so that it is no longer 1 party rule. After that time he will change strategy based on the outcome one way or the other.

Wayne
Wayne, one or more of the investment advisers who post on this forum appear to be on the political right.

As far as I know, they have NEVER suggested timing based on elections.

They operate based on market history and statistics.

You are in danger of doing something very stupid. Beware.
You can be an entertainer with a marked political viewpoint and spend your time writing radio scripts and stirring people up, or you can be a serious financial planner with minimal credentials like CFP, but I don't think you can do both. The fact this guy is making statements like he is on the radio would scare me off from the get-go. Also, as people have noted, 2% is way out of line. You might benefit from reading Jane Bryant Quinn's advice about financial planners in her classic personal finance book which has just been updated. She also has a good discussion of asset allocations, stocks versus bonds, retirement, and just about anything else you can think of.
Cruncher
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Post by Cruncher »

I'll provide you financial advise for 2% AUM, heck I'll even you give yo a 50% discount and only charge 1% :D . I won't lie to you either, you will make the market (minus a very small fee, in addition to the monster 1%!!).

Read these two books:

Bogle: The Little Book of Common Sense Investing
Bernstein: The Four Pillars of Investing

The first book should take about 4 hours to read, but after about the first couple chapters you'll get the idea. Bill's book is meant to take a little more time, read it piece-meal, no faster than you can truly comprehend what he writes.

This is my first post, as I am mostly a lurker, but your title grabbed my attention. Good luck with whatever you path choose.
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