Need a financial advisor?

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Topic Author
jamesrs
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Joined: Mon Oct 07, 2013 12:42 pm

Need a financial advisor?

Post by jamesrs »

What is the potential value of a financial advisor? I have a million dollars of a nest egg in various mutual funds. I have managed this myself. I am 70 and my wife is 60. We have not touched the retirement money yet. Our life is fairly simple and we are pretty frugal. There is no goal for us to leave money to anyone at the end. Still I think there might be a need to have our money managed in retirement. This will be especially the case if I go before my wife. I have limited this to 3 options. First, use the financial advisor service with Vanguard. That costs 3%. So, at the moment $3000/year. Second, turn over our money to a financial advisor at a fee of perhaps 1%, or $10,000. Lastly, put in the money in a mix of Target date funds and generally let things ride.

I know that I do have a "sub" option of sorts. That being hiring an advisor on a hourly basis. That might be preferable as I think the work for us would be small. What is a fair hourly rate for an advisor in a small mid-western town?

I realize they would ask a lot of questions about tolerance to risk, cost of our current lifestyle, other sources of income, etc. My thought is that we simply target a percentage such as 4% for withdrawal and live within those means.

I am not interested in a financial advisor who is going to make a lot of trades. I would like a strategy that is fairly passive. My main question is there a huge advantage using a financial advisor over using the Vanguard service at this point? Would they make up the possible $7000/year difference in fees?
The last question would be is there a huge advantage using any advisory service at all and simply keep the money in Target funds? I am fine with the idea of an advisor as long as I can see value for money.
livesoft
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Re: Need a financial advisor?

Post by livesoft »

I cannot answer your questions because the answers are based on your personality and anxieties.

I know someone who pays an AUM advisor that AUM fee to invest in index funds and other passively-managed funds. They are always asking me if they should ditch the advisor who is actually quite good for them, but really unnecessary given the investments that their portfolio is invested in. There are almost no transactions each year in the portfolio since everything seems to be set to automatic reinvestment. The portfolio could be more tax-efficient, but it is not that bad. Somehow they cannot bring themselves to accept the responsibility for their own portfolios. The very thought of self-management gives them the heebie jeebies even though they ask about switching to self-management a few times a year for the past several years.
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retired@50
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Re: Need a financial advisor?

Post by retired@50 »

My initial reaction would be to stick with target date funds or Vanguard LifeStrategy funds.

An all-in-one solution can be comforting to a surviving spouse. Simplicity can be a real benefit.

I'm extremely skeptical that a 1% AUM adviser is better than using Vanguard at 0.30%.
If you go this route, just use Vanguard and stay out of places like Edward Jones or Raymond James. There isn't a financial adviser alive that has control over the financial markets to such a degree that they can reliably make up an annual $7,000 deficit (in spite of what they may claim) :shock: .

At your age(s), just make sure you're covered with a will, power of attorney, medical proxy, etc.

Finally, regarding withdrawal rates (4% etc.) see this link: https://www.bogleheads.org/wiki/Safe_withdrawal_rates

Regards,
This is one person's opinion. Nothing more.
dbr
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Re: Need a financial advisor?

Post by dbr »

A value of an advisor is that you could do a horrible job of managing your assets and be saved from that by an advisor. The cost of an advisor is punitive and certain and could even involve you in mistakes you would not have made. Avoiding that cost while avoiding mistakes is up to you regarding straightforward principles that are simple and that you can learn. This forum is dedicated to doing exactly that.
Topic Author
jamesrs
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Re: Need a financial advisor?

Post by jamesrs »

I am confident in what I am doing. But, I am getting tired of doing it, and would not mind having someone looking over my shoulder. Also, I do not find it that interesting.

It has occurred to me that if I use the Vanguard service my portfolio might not look that different than if I just chose a number of target funds for my wife and I.

I got some advice from a financial advisor and I will copy it below.

"Vanguard is a great resource. But you’re not gonna get personal attention, you’re not gonna get financial planning, you’re not gonna get other advice that a financial advisor is able to provide. You will be talking to a new guy every time you call in.

It depends on how you feel about the relative value of professional advice and a tax managed tailored portfolio.

If you don’t want any other help, just use a target risk or a target date fund. It’s not a terrible solution. My choice would be to use a target risk portfolio rather than target date. At least that way you get some minimum control over the asset allocation."
tibbitts
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Re: Need a financial advisor?

Post by tibbitts »

jamesrs wrote: Wed Sep 15, 2021 11:49 am I am confident in what I am doing. But, I am getting tired of doing it, and would not mind having someone looking over my shoulder. Also, I do not find it that interesting.

It has occurred to me that if I use the Vanguard service my portfolio might not look that different than if I just chose a number of target funds for my wife and I.

I got some advice from a financial advisor and I will copy it below.

"Vanguard is a great resource. But you’re not gonna get personal attention, you’re not gonna get financial planning, you’re not gonna get other advice that a financial advisor is able to provide. You will be talking to a new guy every time you call in.

It depends on how you feel about the relative value of professional advice and a tax managed tailored portfolio.

If you don’t want any other help, just use a target risk or a target date fund. It’s not a terrible solution. My choice would be to use a target risk portfolio rather than target date. At least that way you get some minimum control over the asset allocation."
Question: what is it that you're actually doing now, and getting tired of, to manage your investments?

That seems like reasonable advice you received from whatever adviser that was.
Topic Author
jamesrs
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Re: Need a financial advisor?

Post by jamesrs »

I guess mainly I am getting tired of making decisions and carrying this on my shoulders. Also, I am not so confident in the spectrum of things that I am investing in. Perhaps the balance is wrong. Lastly, I am not so clear of what he means by target risk portfolio. Could you give me an example?
dbr
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Re: Need a financial advisor?

Post by dbr »

jamesrs wrote: Wed Sep 15, 2021 11:49 am I am confident in what I am doing. But, I am getting tired of doing it, and would not mind having someone looking over my shoulder. Also, I do not find it that interesting.

It has occurred to me that if I use the Vanguard service my portfolio might not look that different than if I just chose a number of target funds for my wife and I.

I got some advice from a financial advisor and I will copy it below.

"Vanguard is a great resource. But you’re not gonna get personal attention, you’re not gonna get financial planning, you’re not gonna get other advice that a financial advisor is able to provide. You will be talking to a new guy every time you call in.

It depends on how you feel about the relative value of professional advice and a tax managed tailored portfolio.

If you don’t want any other help, just use a target risk or a target date fund. It’s not a terrible solution. My choice would be to use a target risk portfolio rather than target date. At least that way you get some minimum control over the asset allocation."
It could be you don't want an advisor but rather an investment manager. Probably something like VPAS works for that at a reasonable cost. The limitation is that they don't manage any assets that are not invested under the plan at Vanguard. Finding someone who manages all of one's assets in general at a reasonable cost might be difficult.

It would be interesting to know what the chores are that you have that are tiresome. To be fair, here is my list of stuff I have to do, roughly from most to least necessary:

1. Make sure to distribute the RMD from my 401k. This involves keeping the notice regarding how much it is and the bother of selling assets in the brokerage link and moving them to the plan itself from which the withdrawal will be taken. I also have to decide how much state and federal withholding to elect.

2. Make sure I get all the tax data I need from the various financial institutions. As far as investments are concerned that means keeping the 1099 from the 401k and downloading the combined statement from the broker into TurboTax.

3. Track the deposit into the checking account of dividends direct deposited by the broker.

4. Keep a spreadsheet that tracks asset allocation so I can decide if I want to do something to rebalance. In actual practice I have sold and bought once in the last ten years to keep things in line. To some extent other transactions can be used to help.

5. From time to time we sell something in a taxable account for cash. After RMD we don't take distributions from tax deferred accounts. It is possible to arrange for a broker to make a monthly cash disbursement.

6. We don't have any holdings without so much unrealized gain that tax loss harvesting ever happens.

So, what would I use an investment manager to do. Keep in mind an investment manager is not a personal financial manager who pays bills, tracks expenses, does tax filing, disburses money from investment accounts, and so on.
tibbitts
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Re: Need a financial advisor?

Post by tibbitts »

jamesrs wrote: Wed Sep 15, 2021 12:38 pm I guess mainly I am getting tired of making decisions and carrying this on my shoulders. Also, I am not so confident in the spectrum of things that I am investing in. Perhaps the balance is wrong. Lastly, I am not so clear of what he means by target risk portfolio. Could you give me an example?
There isn't a "wrong" balance, just one that's reasonable or not. I'm assuming he means that dates in fund names can be misleading because:

1. they change their allocations and glide paths from time to time;
2. they assume a client has a certain risk tolerance based purely on age or retirement date.

So he feels he could better tailor a portfolio to how you feel about different risks your portfolio would face.
Topic Author
jamesrs
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Re: Need a financial advisor?

Post by jamesrs »

I plan to visit/interview a financial planner that is certified by NAPFA. I have talked to him on the phone. He is flexible. He will take over all the duties for a fee. He also said he would do work on an hourly basis. He would do as little or as much work as I want. This sounds good to me. I have no idea what he charges at this point.
Soon2BXProgrammer
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Re: Need a financial advisor?

Post by Soon2BXProgrammer »

jamesrs wrote: Wed Sep 15, 2021 1:23 pm I plan to visit/interview a financial planner that is certified by NAPFA. I have talked to him on the phone. He is flexible. He will take over all the duties for a fee. He also said he would do work on an hourly basis. He would do as little or as much work as I want. This sounds good to me. I have no idea what he charges at this point.
you should be able to find his rates in his ADV Part2 if you find him/his company on: https://adviserinfo.sec.gov/
Earned 34 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Soon2BXProgrammer
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Re: Need a financial advisor?

Post by Soon2BXProgrammer »

jamesrs wrote: Tue Sep 14, 2021 5:21 pm What is a fair hourly rate for an advisor in a small mid-western town?
For Context:

I met Sterling Raskie, PhD as he was my grading instructor for my CFP capstone class, he one of the two advisors that work for:

https://blankenshipfinancial.com/
https://blankenshipfinancial.com/forms/ADVPart2AB.pdf

They charge $225 an hour in New Berlin, Illinois.
Earned 34 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
BitTooAggressive
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Re: Need a financial advisor?

Post by BitTooAggressive »

I have never used a financial advisor and certainly not at vanguard. However vanguard puts great effort into their target date funds and life strategy funds. So my guess would be they would have to have compelling reasons from deviating too much from them. If there is no compelling tax reason, something unusual in your situation my guess is you could pick a life strategy and be just fine.
Misenplace
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Re: Need a financial advisor?

Post by Misenplace »

jamesrs wrote: Wed Sep 15, 2021 12:38 pm Lastly, I am not so clear of what he means by target risk portfolio. Could you give me an example?
A target risk portfolio would be something that has a set percentage of equities and bonds, and the mutual fund manager keeps it there by rebalancing when needed. For example, it's always 60% stock/40% bonds. Here are the Vanguard flavors of these all in funds:
Life Strategy funds page

A target date fund would be something like Vanguard Target Retirement 2030. It's for people planning to retire in about 10 years, and it is currently about 65% stock, but the mutual fund manager is rebalancing the stock portion downwards every quarter, and will be much less stock in 10 years.
Topic Author
jamesrs
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Re: Need a financial advisor?

Post by jamesrs »

I had been thinking a number around $220-250/hr. In my world they ought to charge less than a lawyer.

So, I did a little quick math. If I were to go with a % based fee structure and the fee was 1% of my million that would be $10,000/year. Divide 10,000 by 250 and you get 40. That means ostensibly I am pay for 40 hours (1 full week) of his undivided attention to my finances. I find it hard to imagine that really happening. If you carry that to the Vanguard scenario the fee would be $3000 or about 12 hours of work. I know the numbers are a bit arbitrary.
dbr
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Re: Need a financial advisor?

Post by dbr »

jamesrs wrote: Wed Sep 15, 2021 3:15 pm I had been thinking a number around $220-250/hr. In my world they ought to charge less than a lawyer.

So, I did a little quick math. If I were to go with a % based fee structure and the fee was 1% of my million that would be $10,000/year. Divide 10,000 by 250 and you get 40. That means ostensibly I am pay for 40 hours (1 full week) of his undivided attention to my finances. I find it hard to imagine that really happening. If you carry that to the Vanguard scenario the fee would be $3000 or about 12 hours of work. I know the numbers are a bit arbitrary.
I'm curious how many hours you think they would spend on your investments and what they would be doing. Note I am not sure most financial advisers really actually work on all your finances distinct from your investments. They would not, for example, help you buy a car or negotiate a contract to paint your house or help plan a vacation or manage your daily spending. They might or might not help with insurance, but unfortunately it is probably best if they are not involved trying to sell you insurance. I do agree that if you hire a professional at that level a $250/hr fee, less than a good lawyer, is probably a good estimate of a fair rate. I think they could be in the same category as a personal tax accountant doing ordinary tax work or something like that. If they are also a tax accountant that might be reasonable but I don't think the skills overlap except maybe at a firm that has different people for each area.
loghound
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Re: Need a financial advisor?

Post by loghound »

I think what OP wants is a process that is more-or-less on autopilot, especially as you get older (or if you fear your spouse will have a tougher time managing money)

In that case I think it's worth looking at some kind of managed service (and by "Manged" I mean something that takes care of sending you money and preventing you from doing something stupid). This isn't so much trying to optimize returns as it is trying to do a 'good enough' job and not run out of money.
  • My father (89 YO) went to the vanguard managed services about 6 years ago. Although he is still doing great and could probably manage it himself it has greatly simplified his life (in his words "I don't think about money" -- He talks to his advisor a few times a year, mostly to let them know if he needs more money for a vacation or big purchase and/or to give him updates on his life. I think he pays 1% (as OP mentions) and in my mind it's money well spent (I don't have to worry about him doing something crazy, or sending a Nigerian prince money).
  • He also has Schwab and I suggested he look at their 'intelligent portfolio' with 'intelligent income' feature. Much the same where it automatically keeps you balanced sends you checks and can more or less be forgotten (they also have a version of that where you get a dedicated advisor for a fee)
  • Probably lots of similar other options.
I guess I would suggest that if you really want to not worry about your wife post your demise, and/or don't want to think about it any more, and/or you worry that *someday* you may start loosing your mental facilities (which, sadly, is somewhat inevitable) you should consider a financial planner/system that sort of works in automatic mode. It's something I plan on doing when I get 70+
dbr
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Re: Need a financial advisor?

Post by dbr »

loghound wrote: Wed Sep 15, 2021 3:39 pm I think what OP wants is a process that is more-or-less on autopilot, especially as you get older (or if you fear your spouse will have a tougher time managing money)

In that case I think it's worth looking at some kind of managed service (and by "Manged" I mean something that takes care of sending you money and preventing you from doing something stupid). This isn't so much trying to optimize returns as it is trying to do a 'good enough' job and not run out of money.
  • My father (89 YO) went to the vanguard managed services about 6 years ago. Although he is still doing great and could probably manage it himself it has greatly simplified his life (in his words "I don't think about money" -- He talks to his advisor a few times a year, mostly to let them know if he needs more money for a vacation or big purchase and/or to give him updates on his life. I think he pays 1% (as OP mentions) and in my mind it's money well spent (I don't have to worry about him doing something crazy, or sending a Nigerian prince money).
  • He also has Schwab and I suggested he look at their 'intelligent portfolio' with 'intelligent income' feature. Much the same where it automatically keeps you balanced sends you checks and can more or less be forgotten (they also have a version of that where you get a dedicated advisor for a fee)
  • Probably lots of similar other options.
I guess I would suggest that if you really want to not worry about your wife post your demise, and/or don't want to think about it any more, and/or you worry that *someday* you may start loosing your mental facilities (which, sadly, is somewhat inevitable) you should consider a financial planner/system that sort of works in automatic mode. It's something I plan on doing when I get 70+
We have heard of such agents as fiduciaries that handle a person's finances for them. Money placed in a trust would be managed out of the hand of the grantor with controls by the trustees. People can end up being court ordered into someone's custody. Preferentially much before that someone with durable and healthcare POA is available to help.

I would not be so sure a financial advisor would prevent a person doing what they wanted except perhaps to advise against it. Vanguard does not let VPAS clients just call up and switch investments to things Vanguard doesn't manage, but they can't stop a person from withdrawing assets.

I am not sure any advisor can stop a person from withdrawing and spending money even if it is half the assets to buy a Yacht when the investor lives in Oklahoma or something.

In any case from having been there and done that more than once, the financial issues affecting elderly, surviving, and/or incapacitated people involve things more serious and important than just managing investments. Also, I don't think there is any such thing as completely automatic management of investments. But one thing a person seeking such a service should do is set up whatever system that is well before they are gone in order to be sure what they want is actually happening. It is also possible that when the person who knows what is going on is gone the person remaining will be taken advantage of by the people one thought were the advisors. That might not happen at VPAS, but it sure can anywhere else.

None of this means a person can't put their wealth under the management of someone else if they want to.
deltaneutral83
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Re: Need a financial advisor?

Post by deltaneutral83 »

For accumulation, anyone who has a few hundred hours reading these forums probably doesn't need an adviser. I don't know that I would ever need an "adviser" but more of a financial planner. "Adviser" as it stands now is usually a guy at a big box shop who takes custody and buys front loaded actively managed mutual funds with an additional AUM fee and hopes to God you stick with he and his firm for 20 years. But as you age and life gets more complicated, issues present themselves, SS, Roth conversions, Medicare, Long Term Care, which state to retire in if applicable, etc. etc. If you can handle it then save your money, but father time erodes all of our cognitive abilities at some point. If you make even one little mistake that winds up costing you 5 figures (or 6 or 7 for some BH's), then a fee only guy would have "paid for himself" several times over most likely. If you are anywhere near half the exemption limit, I would "plan ahead" for the future and I wouldn't think twice about getting an estate attorney, CPA, and fee only guy in your corner. It would amount to peanuts on a $10M net worth per year (2 spouses).

$1M net worth, frugal, no heirs, might be a good idea to check in with a fee only guy just to see if you're on the right track. Or just post here as outlined. Probably can't go wrong either way. Preferably a fee only guy who was once a CPA and stays on top of those things. I think it goes without saying that a 1% AUM guy isn't happening in any scenario. I would also not need anyone to take custody of my assets, the plan would be for a child I've trained up over life to "check over me" the suggestions that a fee only guy recommends that we all three (me/child/fee only guy) agree to.

ETA - If you frequent this board, the Vanguard PAS is probably overkill, isn't it just determine AA and then 3 fund with 60% of equities in TSM and 40% in Intl, and the bond portion to BND?
Last edited by deltaneutral83 on Wed Sep 15, 2021 4:27 pm, edited 3 times in total.
Topic Author
jamesrs
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Re: Need a financial advisor?

Post by jamesrs »

A lot of things run through my mind as I read the comments.

I think developing a hourly type of relationship might have the advantage of being able to increase or potentially decrease the amount of help that I want over time. I have managed well enough to this point. My biggest fear is that I will get the risk balance out of whack and lose a lot of money. I think I may be too aggressive in the funds I have now. But, they are doing really well and I hate to give up that return for something like 2%/year. That is hard, but I know that would be a sensible thing to do. So, an advisor would do the appropriate thing for us at a given age. Some of it is control as well. It is hard to turn over complete control over this money to a stranger. I know I am not the only person with that concern.

I am particularly concerned about my wife after my passing. She is clueless about where the money is and how to access it. So, a trusted advisor at that point (or when I loss it) would be valuable.

I know at this point the easiest option would be to park the money in target date funds or a target risk portfolio and draw a percentage each year like 4% and live with that amount of money each year. So, it goes back to the initial question of what value will an advisor bring to our fairly simple life?

Frankly, I am not too concerned about running out of money in my lifetime. It is my wife that I am concerned about.
Lee_WSP
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Re: Need a financial advisor?

Post by Lee_WSP »

Unless you desire some sort of further glidepath, there are several mutual funds and ETF's which will keep your AA constant.

As far as financial management for your wife, a trustee is the type of service you are looking for.

If you are concerned about losing your mental acuity, you are describing a trustee or financial fiduciary who will pay your bills, balance your checking, and otherwise handle your finances. This person is not a financial advisor and balancing your checking account and paying bills is beyond the typical services typically advertised as trusteeship. Ie, you'd have to craft a specific plan for your specific situation with a fiduciary.
Topic Author
jamesrs
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Re: Need a financial advisor?

Post by jamesrs »

I think the advice I would be interested in now relates to allocation strategy, withdrawal strategy and tax strategy.

I know I can get a lot of advice here especially if I can articulate a good question, but I find it hard to sustain interest.
pkcrafter
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Re: Need a financial advisor?

Post by pkcrafter »

jamesrs wrote: Wed Sep 15, 2021 5:33 pm I think the advice I would be interested in now relates to allocation strategy, withdrawal strategy and tax strategy.

I know I can get a lot of advice here especially if I can articulate a good question, but I find it hard to sustain interest.
OK, but remember this is your money and you have an obligation to know what is going on, so you should not simply hire an advisor because you are not interested and he has a friendly smile. To get this right it might be best to provide your personal situation (portfolio). That will determine whether you need full service or or just need a low maintenance self-adjusting portfolio. If your current portfolio is too complex, we can help you simplify it. This would be a once and done. :happy


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.
EvelynTroy
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Re: Need a financial advisor?

Post by EvelynTroy »

Soon2BXProgrammer wrote: Wed Sep 15, 2021 1:53 pm
jamesrs wrote: Tue Sep 14, 2021 5:21 pm What is a fair hourly rate for an advisor in a small mid-western town?
For Context:

I met Sterling Raskie, PhD as he was my grading instructor for my CFP capstone class, he one of the two advisors that work for:

https://blankenshipfinancial.com/
https://blankenshipfinancial.com/forms/ADVPart2AB.pdf

They charge $225 an hour in New Berlin, Illinois.
Over the past maybe 7-8 years I met in person twice with Sterling Raskie - I live about a 2 hour drive from them in Missouri.
I was thinking of getting an advisor, after having worked with Larry Swedroe's firm Buckingham Asset Mgmt. for a time. BAM was just too costly for me. Second time I was quite nervous over a big market increase, again thinking maybe an advisor would be a good idea. I don't want to make any big mistakes as I entered retirement.
I am single and have no one financially literate to review and discuss portfolio management with, etc.

Both occasions Sterling with professional guidance and patience - directed me to just continue what I was doing, stay the course, and I didn't require an advisor. No charge for the time spent with me. Would accept no payment. I may well have them manage my portfolio should I become incapacitated, or perhaps have some cognitive decline, or totally lose interest as I continue to age. I have the utmost confidence in both Sterling and Jim Blankenship. If they weren't two hours away from my home the question would be solved. Philosophy of low cost, index ETF's based on risk tolerance.

IMO, if the OP is questioning whether he needs an advisor at all, or for specific advice, on an ongoing relationship - these guys will provide a professional, and I mean honest, considered opinion which to begin with will be free of charge.

OP and readers may be interested in their blog - I think it is very good, and covers a wide range of topics. The blog itself never pushes or really ever mentions their services. Jim Blankenship is a tax and social security expert. I hope you find it helpful.
https://financialducksinarow.com/


Evelyn
dbr
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Re: Need a financial advisor?

Post by dbr »

EvelynTroy wrote: Thu Sep 16, 2021 1:20 pm
Soon2BXProgrammer wrote: Wed Sep 15, 2021 1:53 pm
jamesrs wrote: Tue Sep 14, 2021 5:21 pm What is a fair hourly rate for an advisor in a small mid-western town?
For Context:

I met Sterling Raskie, PhD as he was my grading instructor for my CFP capstone class, he one of the two advisors that work for:

https://blankenshipfinancial.com/
https://blankenshipfinancial.com/forms/ADVPart2AB.pdf

They charge $225 an hour in New Berlin, Illinois.
Over the past maybe 7-8 years I met in person twice with Sterling Raskie - I live about a 2 hour drive from them in Missouri.
I was thinking of getting an advisor, after having worked with Larry Swedroe's firm Buckingham Asset Mgmt. for a time. BAM was just too costly for me. Second time I was quite nervous over a big market increase, again thinking maybe an advisor would be a good idea. I don't want to make any big mistakes as I entered retirement.
I am single and have no one financially literate to review and discuss portfolio management with, etc.

Both occasions Sterling with professional guidance and patience - directed me to just continue what I was doing, stay the course, and I didn't require an advisor. No charge for the time spent with me. Would accept no payment. I may well have them manage my portfolio should I become incapacitated, or perhaps have some cognitive decline, or totally lose interest as I continue to age. I have the utmost confidence in both Sterling and Jim Blankenship. If they weren't two hours away from my home the question would be solved. Philosophy of low cost, index ETF's based on risk tolerance.

IMO, if the OP is questioning whether he needs an advisor at all, or for specific advice, on an ongoing relationship - these guys will provide a professional, and I mean honest, considered opinion which to begin with will be free of charge.

OP and readers may be interested in their blog - I think it is very good, and covers a wide range of topics. The blog itself never pushes or really ever mentions their services. Jim Blankenship is a tax and social security expert. I hope you find it helpful.
https://financialducksinarow.com/


Evelyn
It's very useful that someone would tell an investor to just keep on doing what they have been doing.
Topic Author
jamesrs
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Joined: Mon Oct 07, 2013 12:42 pm

Re: Need a financial advisor?

Post by jamesrs »

I went and interviewed a NAPFA registered planner today. He was sober and clean shaven. That was a good start.

His overall theme was gloom and doom. Inflation is going to come back and stay around for a good while and that taxes are bound to go up having a big impact on the market. As a result he was not crazy about target date funds. He did mention some other Vanguard bond fund.

Anyway, he offered a variety of service options. Custom portfolios for .8%, "model" portfolios (like vanguard) for .4%, or on an hourly basis for $180/hr. He highlighted the later two.

He also said the process would start by working through the Right Capital software. He estimated the cost to review investment account holdings and the Retirement Sustainability Analysis with in-person meeting to be 3-5 hours. I can bail out at any time. After that I can get as much help as I want.

This all seems reasonable.

I am trying to think of ways I could check him out, present and prior clients. But, can't think of a way as I found him on my own. He does not seem all that busy considering he has been in business for 14 years.

My initial thoughts are that I could pay Vanguard .3% or $3000 or go with this business and pay $180 for someone that has been doing this for 35 years versus what I might get at Vanguard. $3000 would buy me about 16 hours of his time.
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retired@50
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Re: Need a financial advisor?

Post by retired@50 »

jamesrs wrote: Fri Sep 24, 2021 4:54 pm I am trying to think of ways I could check him out...
Start here: https://www.investor.gov/introduction-i ... y/form-adv

Do some searching and reading.

Regards,
This is one person's opinion. Nothing more.
mr_brightside
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Joined: Sat Oct 17, 2020 3:23 pm

Re: Need a financial advisor?

Post by mr_brightside »

retired@50 wrote: Tue Sep 14, 2021 5:31 pm My initial reaction would be to stick with target date funds or Vanguard LifeStrategy funds.

An all-in-one solution can be comforting to a surviving spouse. Simplicity can be a real benefit.

agree

they were pretty much invented for this. hard to imagine a scenario where she'd ever run out of money using an appropriate TDF and a 4% withdrawal rate.

------------------------------------------------
Topic Author
jamesrs
Posts: 27
Joined: Mon Oct 07, 2013 12:42 pm

Re: Need a financial advisor?

Post by jamesrs »

retired@50 wrote: Fri Sep 24, 2021 5:00 pm
jamesrs wrote: Fri Sep 24, 2021 4:54 pm I am trying to think of ways I could check him out...
Start here: https://www.investor.gov/introduction-i ... y/form-adv

Do some searching and reading.

Regards,
He did email me his Individual Disclosure Brochure which looks good.
Mr.BB
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Re: Need a financial advisor?

Post by Mr.BB »

What if you get a fee only planner. Someone that will review and structure your portfolio 1x a year/ set up the upcoming year (taxes/RMD, etc). It would cost you a lot less than getting an advisor who will charge you 1% or more a year. www.garrettplanningnetwork.com

The advisor will make very little money with target date funds so they will never endorse them. I have talked with a few planners over the years. Most either will try to sell you something you don't need or create a scary future, because if everything is coming up roses you don't need them as much.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: Need a financial advisor?

Post by Katietsu »

Just some things to think about:

1) Are your investment assets in tax advantaged accounts? If you have many assets in a taxable brokerage account with embedded capital gains, taxes associated with selling should be a consideration.

2) What type of funds and expenses are associated with the funds he uses? Are they low cost and compatible with your philosophy?

3) Will you be likely to stick with his strategy for the long run? I believe that one reason that people underperform a target date/life strategy fund is because they change strategies in a way that leads to selling low and buying high. For instance, I wonder how many clients underperform because of their association with Buckingham. I say this not because I feel that Buckingham’s approach is bad but because I suspect, some clients bail after a period when a BAM portfolio underperforms a indexed total stock fund.

4) No one knows what will happen with inflation. You can sometimes make a better guess about taxes but, even then, the devil can be in the details. Hopefully, he does not adjust his advice too strongly for these unknowable. I have had family get bad CPA advice because of the underlying political beliefs of the CPA.


Good luck. It is too bad that we must be so on guard when looking at hiring help.
Topic Author
jamesrs
Posts: 27
Joined: Mon Oct 07, 2013 12:42 pm

Re: Need a financial advisor?

Post by jamesrs »

Good luck. It is too bad that we must be so on guard when looking at hiring help.
[/quote]



Well, it is just like the old joke about asking a bank robber why they rob banks and he responds "cuz that's where the money is"
AnnetteLouisan
Posts: 143
Joined: Sat Sep 18, 2021 10:16 pm
Location: New York, NY

Re: Need a financial advisor?

Post by AnnetteLouisan »

jamesrs wrote: Fri Sep 24, 2021 4:54 pm I went and interviewed a NAPFA registered planner today. He was sober and clean shaven. That was a good start.

His overall theme was gloom and doom. Inflation is going to come back and stay around for a good while and that taxes are bound to go up having a big impact on the market. As a result he was not crazy about target date funds. He did mention some other Vanguard bond fund.

Anyway, he offered a variety of service options. Custom portfolios for .8%, "model" portfolios (like vanguard) for .4%, or on an hourly basis for $180/hr. He highlighted the later two.

He also said the process would start by working through the Right Capital software. He estimated the cost to review investment account holdings and the Retirement Sustainability Analysis with in-person meeting to be 3-5 hours. I can bail out at any time. After that I can get as much help as I want.

This all seems reasonable.

I am trying to think of ways I could check him out, present and prior clients. But, can't think of a way as I found him on my own. He does not seem all that busy considering he has been in business for 14 years.

My initial thoughts are that I could pay Vanguard .3% or $3000 or go with this business and pay $180 for someone that has been doing this for 35 years versus what I might get at Vanguard. $3000 would buy me about 16 hours of his time.
Definitely check his disciplinary record on Finra’s BrokerCheck website for free.
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