Financial Consultants?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Topic Author
catfish48084
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Financial Consultants?

Post by catfish48084 » Sun Jan 12, 2020 9:10 am

I've always made my own investment choices. Early on my naivety and arrogance cost me a lot in bad decisions. In more recent years the humbled version of self - which surrendered to reality that I'm no "stock picker" - now just owns low fee index funds.

The wife and I are fairly close to retirement, and have net worth in the area of $2.5M. Probably it's closer to $3M when we finally abandon the jobs.

I'm thinking that despite my above average financial aptitude, it would make good sense to pay a well qualified expert to help guide us in retirement planning and management - just like I pay my accountant and lawyer for their professional services. What I don't know, is whether such financial advisors (one's paid on an hourly basis) exist? I see plenty of advertising for "financial advisors", who right or wrong, I believe want to charge me huge annual fees based on a percentage of "assets under management", for the outstanding advise that I should buy annuities or invest in the same funds I already own. Yes, I'm cynical and skeptical of everything.

I want to pay for the counseling of an expert, who with understanding of our specific backgrounds, can council us while tying together the ramifications of our investment accounts, property ownership, social security, healthcare, estate/trust issues, tax ramifications, etc.

Do such comprehensive advisor services, paid on an hourly basis, exist? What should we expect to pay, and how do we find them ?

Jimmie
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Re: Financial Consultants?

Post by Jimmie » Sun Jan 12, 2020 9:21 am

Your concerns are understandable. I wondered the same things since I handle my own investments.

The confusion lies when FA's advertise as "fee only" when they may charge fees for hourly consultations AND fees for assets under management. I have read and believe that this is a conflict of interest. This, in my opinion, is not a fiduciary since they make money off your investments, no matter how they perform. Even the firms that say "when you make money, we make money" still make money when you lose money if your funds are under their management.

I think to find the FA you want, you need to search for both "fiduciary" and "flat-fee", not "fee only". They are different.

student
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Re: Financial Consultants?

Post by student » Sun Jan 12, 2020 9:27 am

catfish48084 wrote:
Sun Jan 12, 2020 9:10 am
I want to pay for the counseling of an expert, who with understanding of our specific backgrounds, can council us while tying together the ramifications of our investment accounts, property ownership, social security, healthcare, estate/trust issues, tax ramifications, etc.

Do such comprehensive advisor services, paid on an hourly basis, exist? What should we expect to pay, and how do we find them ?
Perhaps starts here https://www.kiplinger.com/article/retir ... eckup.html

dbr
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Re: Financial Consultants?

Post by dbr » Sun Jan 12, 2020 9:29 am

For purposes of illustration this is an example of an hourly fee only investment consultant: https://rickferri.com/

This is not a recommendation either way to use or not use this service.

Note that in reading the pages this person is an investment consultant/planner and not a financial planner in the sense of advising you on Social Security, pensions, wills and estates, or taxes comprehensively, as far as I know. Someone can correct me if I am wrong on this.

I highly recommend Mr. Ferri's books.

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goingup
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Re: Financial Consultants?

Post by goingup » Sun Jan 12, 2020 9:51 am

Speaking of Rick Ferri...he hosted a podcast interview with Sheryl Garrett (Garrett Planning Network) that was helpful in understanding what type of help is available for retail investors. https://bogleheads.podbean.com/e/episod ... ick-ferri/

I think Rick can guide investors with setting up a low-cost, tax-efficient portfolio of funds. I don't believe he gets into issues regarding SS, pensions, Roth conversions, and complex tax issues.

For the OP, I'd start with finding someone from the Garrett Planning Network who can offer you a one-time (or annual) review of your situation. I'd expect to pay $1-2K for this. I'd steer clear of an advisor who wants a AUM relationship, unless that's what you want.

Allan Roth also provides one-time comprehensive financial reviews, but I've read he is quite busy!

Topic Author
catfish48084
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Re: Financial Consultants?

Post by catfish48084 » Mon Jan 13, 2020 5:34 pm

thanks to all for the much appreciated feedback

mdavis6890
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Re: Financial Consultants?

Post by mdavis6890 » Mon Jan 13, 2020 8:16 pm

Nothing wrong with paying for advice, as long as:
  • You know how much you are paying. That is, there aren't fees hidden as commissions or kickbacks.
  • There aren't any conflicts of interest.
  • You think the advice is worth what you're paying - and keep in mind there's a lot of good, free advice out there.
Be aware of subtle conflicts of interest, such as with an AUM fee your adviser will make more money if you keep your money invested rather than paying down your mortgage, for example.

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calmaniac
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Re: Financial Consultants?

Post by calmaniac » Mon Jan 13, 2020 8:54 pm

Search the Bogleheads forum for "financial planner" and "near retirement" (or similar) and you'll find a gazillion threads with a gazillion2 responses that have already examined this question in detail.

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patrick013
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Re: Financial Consultants?

Post by patrick013 » Mon Jan 13, 2020 9:10 pm

catfish48084 wrote:
Sun Jan 12, 2020 9:10 am

I want to pay for the counseling of an expert, who with understanding of our specific backgrounds, can council us while tying together the ramifications of our investment accounts, property ownership, social security, healthcare, estate/trust issues, tax ramifications, etc.

Do such comprehensive advisor services, paid on an hourly basis, exist? What should we expect to pay, and how do we find them ?


I would expect most good advisor's to have a finance degree and several years of experience. A CFP is a licensed advisor plus has 10 years of experience and has passed an additional examination. You can't expect an advisor to know everything. Medicare, some trust issues, etc. they might not know about. Regarding insurance and taxation a CFP should have more experience than a standard investment account arrangement. Fidelity and Schwab have account arrangements, some trusts some not, where a CFP is available for general consultation as part of an account management fee. Fees vary probably .3% to .5% depending on assets under management and includes the CFP consultation.

Otherwise it's the local bank, local lawyers, or CFP's in the phone book.
age in bonds, buy-and-hold, 10 year business cycle

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JoeRetire
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Re: Financial Consultants?

Post by JoeRetire » Mon Jan 13, 2020 9:16 pm

Jimmie wrote:
Sun Jan 12, 2020 9:21 am
The confusion lies when FA's advertise as "fee only" when they may charge fees for hourly consultations AND fees for assets under management.
What part of this isn't fee-only?
I have read and believe that this is a conflict of interest. This, in my opinion, is not a fiduciary since they make money off your investments, no matter how they perform.
Perhaps you have an unusual definition of the term "fiduciary"?
Very Stable Genius

Jimmie
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Re: Financial Consultants?

Post by Jimmie » Mon Jan 13, 2020 9:30 pm

JoeRetire wrote:
Mon Jan 13, 2020 9:16 pm
Perhaps you have an unusual definition of the term "fiduciary"?
Nope. My definition of fiduciary is a legal obligation of one party to act in the best interest of another.

FA's that charge AUM and claim to be fiduciaries really don't meet that standard. What obligation do they have to ensure you make the best investment decisions if they make of percentage of your investments regardless of how those investments perform? This is a conflict of interest if ever there was one.

What are you paying in AUM to your fiduciary?

hachiko
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Re: Financial Consultants?

Post by hachiko » Mon Jan 13, 2020 10:54 pm

Jimmie wrote:
Mon Jan 13, 2020 9:30 pm
JoeRetire wrote:
Mon Jan 13, 2020 9:16 pm
Perhaps you have an unusual definition of the term "fiduciary"?
Nope. My definition of fiduciary is a legal obligation of one party to act in the best interest of another.

FA's that charge AUM and claim to be fiduciaries really don't meet that standard. What obligation do they have to ensure you make the best investment decisions if they make of percentage of your investments regardless of how those investments perform? This is a conflict of interest if ever there was one.

What are you paying in AUM to your fiduciary?
So your definition of a fiduciary is only someone who earns a fee based on your gains? Flat fee - not a fiduciary? Hourly fee - not a fiduciary?

AUM is simply a fee structure. Most people who have more assets do actually have a more complicated situation that demands a higher fee (either due to the need for a more experienced advisor, the need for an advisor to consult with other professionals for assistance, etc.) Fiduciary is a question of intent, it doesn't have anything to do with the fee structure. Of course there are some fee structures that may be more likely to lead to an advisor violating their fiduciary duty, but the fee structure itself doesn't indicate whether an advisor is meeting their fiduciary duty.

knightrider
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Re: Financial Consultants?

Post by knightrider » Tue Jan 14, 2020 10:33 am

I've asked this question before and seems such people do not exist.. I think the reason is everyone has different financial situation and different goals in life. Another issue is most of this stuff you should be able to figure out yourself with help from forums like this. If you are smart enough to earn $3million then you should be able to know how to invest it..

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ThereAreNoGurus
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Re: Financial Consultants?

Post by ThereAreNoGurus » Tue Jan 14, 2020 10:54 am

Check this guy out and see whether he might be for you: https://planvisionmn.com/ (One year of guidance for $149.)

A forum member recently posted that link on a similar subject. He and one other BH member claim to have used him and spoke well of the firm.

There is enough info on the site to see whether there might be a fit for you.

I am not associated with that guy whatsoever, but after perusing the site I was impressed with his presentation, philosophy, what he purportedly offers and what he's asking for it.
Trade the news and you will lose.

knightrider
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Re: Financial Consultants?

Post by knightrider » Tue Jan 14, 2020 11:22 am

ThereAreNoGurus wrote:
Tue Jan 14, 2020 10:54 am
Check this guy out and see whether he might be for you: https://planvisionmn.com/ (One year of guidance for $149.)
I read through his FAQ and it appears he is mostly focused on helping you pick what funds to invest in. It doesn't seem like he offers any retirement planning or high level advice on things like backdoor ROTH, solo 401ks, SEP IRA, 529's, HSA's etc..
Last edited by knightrider on Tue Jan 14, 2020 3:34 pm, edited 1 time in total.

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goodenyou
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Re: Financial Consultants?

Post by goodenyou » Tue Jan 14, 2020 11:31 am

The best investing and financial advice I have gotten has been here on BH.org. Anything more complex such as trust and estates issues may require a lawyer, but you can get a start on some advice here. The next closest option would be a PAS at a low cost firm like Vanguard or Fidelity or Schwab.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

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ThereAreNoGurus
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Re: Financial Consultants?

Post by ThereAreNoGurus » Tue Jan 14, 2020 11:44 am

knightrider wrote:
Tue Jan 14, 2020 11:22 am
ThereAreNoGurus wrote:
Tue Jan 14, 2020 10:54 am
Check this guy out and see whether he might be for you: https://planvisionmn.com/ (One year of guidance for $149.)
I read through his FAQ and it appears he is mostly focused on helping you pick what funds to invest it. It doesn't seem like he offers any retirement planning or high level advice on things like backdoor ROTH, solo 401ks, SEP IRA, 529's, HSA's etc..
One of the links from there: https://planvisionmn.com/?page_id=6390 has links to articles about him. One of those links is an interview where he claims he does retirement planning. Also (if I correctly recall) he's got short videos on the site, that I've watched, where one mentions retirement planning is part of the $149. As to how comprehensive it would be I have no idea. (But of course it would be easy enough for the OP to ask if OP were interested in his services.)
Trade the news and you will lose.

RedTailedHawk
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Re: Financial Consultants?

Post by RedTailedHawk » Tue Jan 14, 2020 1:43 pm

catfish48084 wrote:
Sun Jan 12, 2020 9:10 am
I've always made my own investment choices. Early on my naivety and arrogance cost me a lot in bad decisions. In more recent years the humbled version of self - which surrendered to reality that I'm no "stock picker" - now just owns low fee index funds.

The wife and I are fairly close to retirement, and have net worth in the area of $2.5M. Probably it's closer to $3M when we finally abandon the jobs.

I'm thinking that despite my above average financial aptitude, it would make good sense to pay a well qualified expert to help guide us in retirement planning and management - just like I pay my accountant and lawyer for their professional services. What I don't know, is whether such financial advisors (one's paid on an hourly basis) exist? I see plenty of advertising for "financial advisors", who right or wrong, I believe want to charge me huge annual fees based on a percentage of "assets under management", for the outstanding advise that I should buy annuities or invest in the same funds I already own. Yes, I'm cynical and skeptical of everything.

I want to pay for the counseling of an expert, who with understanding of our specific backgrounds, can council us while tying together the ramifications of our investment accounts, property ownership, social security, healthcare, estate/trust issues, tax ramifications, etc.

Do such comprehensive advisor services, paid on an hourly basis, exist? What should we expect to pay, and how do we find them ?
We were in a similar situation years ago. The following is a description of what we did for your reading enjoyment and not an endorsement for anything. About 5 years before retirement, we decided to go with a full service fiduciary AUM-based wealth management firm. I had been managing our money more or less the BH way without realizing it. We decided to use this firm to get us planned for retirement and to transition us through the first few years of retirement. We have various 401Ks, IRAs, taxable accounts. We retired before 65 so there was medical insurance questions, trust questions, tax questions. I could have worked through all that myself but call me stupid or lazy because I didn't want to screw it up. I'd never retired before and there was no one available to walk me through it. So we went with the firm. We could always bail after a few years.

What they do that I like:
- Full service, can always get in touch with our POC. He is very attentive, of course. We can ask any question, any time.
- Work with us in every step of planning, everything is transparent.
- We tell them how much money we need, they will show us how much we can get.
- Our portfolio allocation is very BH like, low cost index funds, diversified, re-balance as needed not calendar based, tax loss harvesting as needed.
- They map out when and how much to do Roth conversion each year to reduce tax liability from future RMDs.
- They handle all the details. I tell them how much money when we need and how often and they do the rest.
- They help with finding the cheapest insurance (car, renter) so we don't have to.
- They have in-house lawyers to help with setting up trust.
- They have in-house CPA to do taxes, which we don't use because we like our own.

What we don't like:
- The 1% AUM fee of course. It's a sizable chunk in dollar term.

Why we are sticking with them for now:
- They do everything so we don't have to. For me to manage our money it will be a job in itself and I won't do it as well. I want stress-free time for myself in retirement. I feel that I've earned it. We have to pay for it of course. I think of it this way. When I bought my first house, money was tight so I mowed my own lawn and did everything myself. Fast forward 20 years, we have enough money for a large home on a half acre lot in CA. We paid a gardener to do all the yard work because we could afford to. We traded money for time.
- As long as they manage to make enough money for us to live comfortably and stress free, they can have their 1%. Obviously we want to pay less but that seems to be the going rate for this type of service. Note, if our portfolio is less than a certain threshold, I would not pay the 1% AUM because that 1% would then be significant to our bottom line.
- We can always stop using this firm in a few years after all the "tricky" stuff have been dealt with. I continue to read and learn from the BH forums. Our portfolio is basically an expanded version of a 3 fund portfolio. It shouldn't be too hard to simplify it if we ever decide to manage it ourselves.

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JoeRetire
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Re: Financial Consultants?

Post by JoeRetire » Tue Jan 14, 2020 3:24 pm

Jimmie wrote:
Mon Jan 13, 2020 9:30 pm
JoeRetire wrote:
Mon Jan 13, 2020 9:16 pm
Perhaps you have an unusual definition of the term "fiduciary"?
Nope. My definition of fiduciary is a legal obligation of one party to act in the best interest of another.

FA's that charge AUM and claim to be fiduciaries really don't meet that standard.
Okay. Then you are just wrong.
Very Stable Genius

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