Portfolio Review and Advice on FA?

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Topic Author
Abarn
Posts: 14
Joined: Sun Mar 10, 2019 1:39 am

Portfolio Review and Advice on FA?

Post by Abarn » Wed Mar 13, 2019 4:04 pm

Hello all. I'm hoping to get some insight on my portfolio and current asset allocation. Also, I foresee kind of a tricky situation on the horizon with a financial adviser who happens to be a very close family friend.

Information about me:
Emergency fund: More than adequate at this time
Debt: Mortgage with 10% equity, 3.875% interest rate
Tax filing status: Married filing jointly
Take rate: 35% federal, 6.84% State
State of residence: Nebraska
Age: 34
Desired asset allocation: 90% stocks/10% bond
Desired international allocations: 30% of stocks

My current assets, allocations, and contributions (current overall allocation is 60% US stock, 30% international stock, and 10% bonds)
403(b) - 100% Vanguard TDF 2050 - $19,000/year
401(a) 1 - 100% Vanguard TDF 2050 - ~$25,000/year
401(a) 2 - 80% FID Total Mrkt Index (FSKAX), 20% FID Total Intl Index (FTIHX) - $5500/year
457 (b) - 80% FID Total Mrkt Index (FSKAX), 20% FID Total Bond Index
(FXNAX) - $12,000/year
Roth IRA - 100% FID Total Mrkt Index (FSKAX) - $6000/year through backdoor

Questions
1. Does anyone have any thoughts on my current asset allocation? Currently I'm doing this on my own and really have no idea if I am totally off base. I plan to retire in 20-30 years. There are other funds that are available that I could use in place of the Vanguard TDF 2050.

2. I have a close family friend who is a financial/wealth management adviser. I have met with him a couple times but he has not yet laid hands on my portfolio. I agreed to meet with him soon and I'm concerned that he will suggest changing everything up. Has anyone been in a situation where they interacted with a close friend who is an adviser? How did you approach the situation?

Thank you!

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BL
Posts: 9159
Joined: Sun Mar 01, 2009 2:28 pm

Re: Portfolio Review and Advice on FA?

Post by BL » Wed Mar 13, 2019 7:17 pm

Stop meeting with this "friend", or he will get his hands on your portfolio and it will be still harder to "divorce" him. Stop wasting his time!

Read Wiki, recommended books, and/or If You Can instead:
https://www.etf.com/docs/IfYouCan.pdf

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Wiggums
Posts: 1904
Joined: Thu Jan 31, 2019 8:02 am

Re: Portfolio Review and Advice on FA?

Post by Wiggums » Wed Mar 13, 2019 7:34 pm

Why talk to a FA when you have over 88,000 BH friends that give you great advice for free? We have nothing to sell to you.

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bertilak
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Location: East of the Pecos, West of the Mississippi

Re: Portfolio Review and Advice on FA?

Post by bertilak » Wed Mar 13, 2019 7:36 pm

Not really a close friend but the guy who does my taxes does not approve of my portfolio of Vanguard index funds. His attitude is that I could do a lot better with smarter investment picking. I just said I was set in my ways. I avoided any discussion of investment strategies.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

ExitStageLeft
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Joined: Sat Jan 20, 2018 4:02 pm

Re: Portfolio Review and Advice on FA?

Post by ExitStageLeft » Thu Mar 14, 2019 3:03 pm

Welcome to the forum!

Your asset allocation is fine at 90/10. That's pretty much the default AA for target date funds until you approach about 20 years from the target date. It then starts to ramp up bond allocation by about 1.5 percent per year.

Your family friend could be a wonderful advisor or could end up costing you up to a third of your retirement savings. Be sure to read Bill Bernstein's IfYouCan before the meeting!

Topic Author
Abarn
Posts: 14
Joined: Sun Mar 10, 2019 1:39 am

Re: Portfolio Review and Advice on FA?

Post by Abarn » Fri Mar 15, 2019 7:01 pm

Thank you for the input. He is a close friend of my in-laws and has been their financial adviser for years. I know he is trying to be friendly and helpful but I know so much more now than I did when we initially met and I think he's going to be very surprised (hopefully pleasantly) with my knowledge and opinions.

I plan to send him my investment policy statement prior to our next meeting and making my goals and intentions very clear (i.e. low cost index funds only!).

ExitStageLeft
Posts: 1631
Joined: Sat Jan 20, 2018 4:02 pm

Re: Portfolio Review and Advice on FA?

Post by ExitStageLeft » Sat Mar 16, 2019 11:12 am

I applaud you for taking that step now and developing an IPS.

One thing that did catch my eye though is that only one IRA is getting deposits this year. If there is enough freeboard in the budget you can be saving in your spouse's IRA as well, even if spouse isn't working.

Saving for retirement is a long-term goal that should involve both of you in the planning and execution. It's not clear to me if you've presented a joint retirement plan. If you haven't yet brought your spouse in on the planning, doing so while developing the IPS is a great way to start.

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mhadden1
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Joined: Tue Mar 25, 2014 8:14 pm
Location: North Alabama

Re: Portfolio Review and Advice on FA?

Post by mhadden1 » Sat Mar 16, 2019 11:29 am

You are saving for retirement with excellent inexpensive index funds. The target date funds automatically rebalance and shift AA toward retirement. I don't see a need to pay for advice. Also I would avoid doing business like this with a family friend.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

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