Alternatives to financial advisor and general investment advice

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Claire
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Joined: Mon Mar 23, 2020 7:45 pm

Alternatives to financial advisor and general investment advice

Post by Claire » Mon Mar 23, 2020 8:20 pm

Dear all:
First, thank you all for your very generous time in advising newbies like me. I hope everyone is managing to keep safe and healthy during these trying times.

I have decided to leave my Ameriprise advisor (high fees, poor/non-existent communication, reacted badly when I asked what the fees covered and how come I underperformed the market last year, etc.). So I am in the market for alternative options to a financial advisor. I'm a disciplined saver (about 60% of my income), but I have not learned how to invest. It frightens me but I'm willing to learn as I don't think my money is growing as it should. I think I need some hand-holding to start off - not sure I can jump right into DIY. I've considered Wealthfront and Personal Capital but wonder whether they're right for my needs. I've been 100% debt-free for 8 years, have maxed out 401k contributions for as long, contributing to 529, emergency funds for 12 months and good salary (knock on wood with these special times).
- What does a good alternative look like for someone like me? My goal is wealth growth
- What mistakes might I be making and should correct promptly?
- Is now a good time to make a transition?
- What to do with cash in the bank? Keep? Invest? Buy?
- In my mid-30s with a chronic medical condition but I suspect the multi-index UL I have is overkill with its $6k/annual premium.
- How do I exit current financial advisor gracefully but firmly?

Just writing it out makes me feel like a financial hot mess for these decisions. I welcome soft and tough love. Must get my financial house in order and I'm willing to learn. Thanks so much!

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Sandtrap
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Location: Hawaii No Ka Oi , N. Arizona

Re: Alternatives to financial advisor and general investment advice

Post by Sandtrap » Mon Mar 23, 2020 8:45 pm

1 Open a brokerage account at Vanguard
2 Talk to Vanguard VPAS Services at no charge
3 Transfer your funds (in kind) Don’t need your advisor permission. Vanguard will talk you through it.
4 Post a portfolio review so we can help you create a long term comprehensive financial strategy. Many options.
5 Decide your path. DIY or VPAS.
6 Concurrently to #1-5 read the forum Wiki “Getting Started”

j🌺
Wiki Bogleheads Wiki: Everything You Need to Know

jjface
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Re: Alternatives to financial advisor and general investment advice

Post by jjface » Mon Mar 23, 2020 8:51 pm

Vanguard Personal Advisory service as suggested above is a good way to get hand holding in a safe environment.

One hurdle to jump is the idea that investing has to be complicated. It can be especially if you want to eek out every dollar you can but it doesn't have to be. A novice investor can do a lot worse than investing in the Vanguard balanced index mutual fund or vanguard lifestrategy moderate growth, adding to it each year and leaving it alone until retirement. If you want more wealth growth possibilities with more risk the go for the Vanguard life strategy growth fund. Assuming your 401k has these options.
https://investor.vanguard.com/mutual-fu ... estrategy/#/

Read this great free booklet if you want to learn and take things a little further:
https://www.etf.com/docs/IfYouCan.pdf

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Peter Foley
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Location: Lake Wobegon

Re: Alternatives to financial advisor and general investment advice

Post by Peter Foley » Mon Mar 23, 2020 9:00 pm

A follow up to Sandtrap's advice and that of jjface: investing doesn't have to be hard. Read up just a little on the Wiki about the 3 fund portfolio, and as an alternative, Target Retirement Funds. Both options are very simple.

Before investing, however, also try to get a read on your ability to take risk, need to take risk, and willingness to take risk. These concepts relate to your overall asset allocation between stock mutual funds and bond mutual funds. You have to know your risk tolerance to be able to implement any investment strategy.
Last edited by Peter Foley on Tue Mar 24, 2020 1:58 pm, edited 1 time in total.

sport
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Re: Alternatives to financial advisor and general investment advice

Post by sport » Mon Mar 23, 2020 9:07 pm

Another approach to consider is to start with Vanguard's PAS. After a year or two, when you understand what they are doing, and you are comfortable with it, you can discontinue PAS and do it yourself. While PAS is inexpensive, it is not free. So, use it as long as you feel you need it, and then you can take over the job yourself. (A little known secret: it is not difficult.) :idea:

Chip Shot
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Re: Alternatives to financial advisor and general investment advice

Post by Chip Shot » Tue Mar 24, 2020 6:25 am

sport wrote:
Mon Mar 23, 2020 9:07 pm
Another approach to consider is to start with Vanguard's PAS. After a year or two, when you understand what they are doing, and you are comfortable with it, you can discontinue PAS and do it yourself. While PAS is inexpensive, it is not free. So, use it as long as you feel you need it, and then you can take over the job yourself. (A little known secret: it is not difficult.) :idea:
This :thumbsup

WIAV8TOR
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Joined: Thu Dec 10, 2015 7:26 pm

Re: Alternatives to financial advisor and general investment advice

Post by WIAV8TOR » Tue Mar 24, 2020 6:32 am

Welcome. Don’t forget to go to the library & check out a few books. Those by John C Bogle is a great start.


An important key is asset allocation, with age & investment psyche factored in.

HomeStretch
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Re: Alternatives to financial advisor and general investment advice

Post by HomeStretch » Tue Mar 24, 2020 8:32 am

Good advice, above. No one will ever care about your portfolio as much as you do. Even if you use a lower-cost advisor service like Vanguard’s PAS, do the suggested reading to educate yourself so you can determine whether the advisor’s proposed plan is a good fit for you.

Concurrent with educating yourself and changing brokerages/advisors, for best advice from this forum post your financial picture in the format found in ”Asking Portfolio Questions”:
https://www.bogleheads.org/wiki/Asking_ ... _questions

To address some other items in your post:
1. Cash in the bank - is this your emergency fund or additional funds to invest?
2. Universal life insurance is usually not the best choice. Check out 20 or 30-year level premium term life insurance as an alternative at online brokers such as selectquote.com (I used and liked them), term4life and Xander are often mentioned in the forum.

alex_686
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Re: Alternatives to financial advisor and general investment advice

Post by alex_686 » Tue Mar 24, 2020 8:41 am

A true fee only CFP. One should be able to write up a high quality IPS and AA which you can execute yourself at a low cost brokerage firm.

afan
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Joined: Sun Jul 25, 2010 4:01 pm

Re: Alternatives to financial advisor and general investment advice

Post by afan » Tue Mar 24, 2020 8:45 am

VPAS is a good transition service. Cheaper than the vast majority of advisers and will put you in a reasonable portfolio. Although VPAS includes financial advice, it seemed to to too generic and inexpert to be of much use. You will get far more detailed and thoughtful information here.

Alternatives include consulting an hourly fee only adviser. Some, like Rick Ferri, will only advise on investing. Others, like Allen Roth, will give more comprehensive advice, which you might need given uncertainty of how much and what kind if life insurance you need.

Garret Planning network offers hourly fee only advising. The Finance Buff also will identify such advisers for you.
All of these options come with fees. Depending on how much money you have they could be more or less than a year with VPAS.

Thanks to market efficiency, the investing part of managing your finances is dead simple.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Topic Author
Claire
Posts: 2
Joined: Mon Mar 23, 2020 7:45 pm

Re: Alternatives to financial advisor and general investment advice

Post by Claire » Thu Mar 26, 2020 12:29 am

Sandtrap wrote:
Mon Mar 23, 2020 8:45 pm
1 Open a brokerage account at Vanguard
2 Talk to Vanguard VPAS Services at no charge
3 Transfer your funds (in kind) Don’t need your advisor permission. Vanguard will talk you through it.
4 Post a portfolio review so we can help you create a long term comprehensive financial strategy. Many options.
5 Decide your path. DIY or VPAS.
6 Concurrently to #1-5 read the forum Wiki “Getting Started”

j🌺
Thanks. I have done this and their wait times for appointments is long, which is understandable under the circumstances. Portfolio review coming up. Will re-read "Getting started." A few people elsewhere on the blog think Vanguard DIY is better than VPS in that the advice here might be as good as or better (and more diverse) than a single VPS advisor. What do you think?

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Sandtrap
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Location: Hawaii No Ka Oi , N. Arizona

Re: Alternatives to financial advisor and general investment advice

Post by Sandtrap » Thu Mar 26, 2020 7:53 am

Claire wrote:
Thu Mar 26, 2020 12:29 am
Sandtrap wrote:
Mon Mar 23, 2020 8:45 pm
1 Open a brokerage account at Vanguard
2 Talk to Vanguard VPAS Services at no charge
3 Transfer your funds (in kind) Don’t need your advisor permission. Vanguard will talk you through it.
4 Post a portfolio review so we can help you create a long term comprehensive financial strategy. Many options.
5 Decide your path. DIY or VPAS.
6 Concurrently to #1-5 read the forum Wiki “Getting Started”

j🌺
Thanks. I have done this and their wait times for appointments is long, which is understandable under the circumstances. Portfolio review coming up. Will re-read "Getting started." A few people elsewhere on the blog think Vanguard DIY is better than VPS in that the advice here might be as good as or better (and more diverse) than a single VPS advisor. What do you think?
Depends on:
1 How well the portfolio review goes, level and quality of input, quality of data provided, etc.
2 Your willingness and ability to setup then maintain the portfolio (depends on complexity)
3 You might decide that Vanguard VPAS services is worth the "hands off" for a very small fee, or not
4 You might decide to go with VPAS for a short time then discontinue (no contracts) and DIY from then on
5 Once you go through all of the WIKi reading and study the book list on your own, your perspective will change greatly. At some point, you might think, "wow, this is a lot simpler than folks think and FA's let on", then, based on the results of your "portfolio review", decide to DIY. A lot depends on how much you want to learn, initially it can be overwhelming, but after awhile its like "riding a bike" and you might enjoy it.
6 The Wiki book list complements the WIKI so doing both is a plus. Once going thru that you will know as much or more than many FA's salesman.

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

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