NFT: Anyone use a financial planner?

a fiduciary.

account threshold. I had one back when I was only investing $20k and I didn’t like it since I was only in a handful of funds that I can do myself, was paying fees and still had to pay fees to execute trades.

It depends on your goals to be honest.

1% is standard for larger wealth management firms

I’d recommend going to a private advising firm you can get the same results and pay 1/2 point less.

Get references and verify their results. Be diversified, this market looks unpredictable short-term.

Good luck!

planner and the 1% is standard, but if I didn't feel like he was adding value, I'd easily yank my money and invest elsewhere.

Things I look for as expertise, value, etc. and so far he's exceeded my expectations and the plan he put together for my family.

Typical fee structure and have joint cash, Roth, IRAs, college savings and regular savings all there. I have other “play” accounts as well as 403 separate investments from work.

All in all - worth having some distance from your savings and some oversight from a professional. I do invest actively outside of that account as well.

of some things my planner recommended for us.

He suggested that due to changing conditions, people no longer can rely on a portion of your portfolio to come from fixed income items like bonds, they just don't provide a reliable return like they once did.

So, he suggested a whole life policy as a buffer asset. net rate of return based on the policy is around 5.5%. I talked to my father about it who is an old school stock broker. And he nearly came through the phone and choked me. He said whole life policies are not investments, etc. and suckers get them. Then I did some research and I understood how it fit in my portfolio and it just makes a ton of sense.

Also he advises in areas of investment diversification. some emerging stuff like crypto, traditional blue chips, tech, reits, etc.

He shows how much money we anticipate needing in retirement, what we'll do in down market years to not deplete those funds faster than anticipated, how to best position ourselves from a tax standpoint, etc.

I like what I've seen so far.

he does add value. Their firm manages a group of stocks. Pick and choose when to buy/sell, etc. Has also gotten me some IPOs, such as GoDaddy and Alibaba

I caveat the phrase above that it really depends on your situation and goals. Maybe if you have certain businesses, complicated tax situation or similar then sure - let someone take 1%. But they better give you something well beyond traditional service

I'll have many doubters on here and point to their advisers who "got them into certain things which turned out well". Look at the ride we have been on since 2009 - is it really worth paying someone 1% when you can get the same returns yourself?

As someone who understands active management very well, I can assure that nobody can beat the market.

Unless I had 10 million plus
Use a fee only if needed
% of assets? So easy to just do a solid asset allocation, especially in the accumulation phase
Distribution phase, may make more sense
Ask your CPA if you use one for some advice also
Unless your clueless about money just don’t see paying someone literally 10-15% of your RAte of return to pick the same funds u Could pick with 5 minutes of research

I'm in the industry. If you pay that 1% over the next 25 years it adds up to big money. Vanguard, Fidelity etc will do most of the planning for you free and put you in index funds where you should be.
The only guaranteed way to get better investment results is to lower your costs.

each broker is different. If you want to invest in index funds or managed funds, yes the advice above rings true. But that's one strategy.

there are just not enough hours in the day for me, as a parent, husband, a coach, as a full time employee, an amateur hockey player (lol) and everything else to be good at all things.

If 1% is all it costs me for the peace of mind that someone has a fiduciary responsibility for my financial well being (funded by me) it's well worth it.

I'll give you an example. The first financial planner we met with (and hired and since fired) reviewed our whole portfolio with us, savings, investments, assets, goals, etc. and said you guys are doing a decent job for new parents in your early 30's, etc. You will be able to retire at this rate around 60 years old, but you are under funding your children's college funds by 1000% (yes, three zeroes, one thousand).

So, we adjusted, but I'm a fairly smart person, and there just isn't enough hours in a day to be expert in everything, and to keep on top of it, so for me (not for everyone) the fee is worth the expertise and if this guy I have now (the past 4 years) helps my portfolio to keep outperforming expectations it will go beyond being just "worth it" and it will shave years off when we can retire (already now he has it down to 55 - not that we have to, but we will be financially able to - which is huge for me).

in Ridgewood NJ. We are independent and a fiduciary, which is what you should be looking for. As you mentioned, we are fee based, and our fee is about 1% of assets managed. You will pay somebody something, whether an ETF or a Mutual Fund, unless you are confident enough in your ability to choose individual stocks.

I would be happy to answer any questions you may have- not really looking to land you as a client, but educate you a bit on what you should be looking for.

Mt email is jjbjr922@aol.com. Just put BBI in the subject line.

Good Luck.

But an etf these days are less than 1/10th of one percent
I am also a CPA studying for the PFS credential ( will be a fiduciary too if I go thru with all 4 parts)
Not against a planner at all, but really only fee only
It takes 5 minutes to pick 3-4 good funds
Vanguard Wellington and fidelity contra fund
A solid mid cap and small cap etf
Throw in a reit and 25 % international/ emerging market
Bonds are in the Wellington fund (1/3). Can’t really go wrong there
Paying for a financial plan makes sense. 1% hand holding assets?
Can’t do it
Jmho

In comment 15120451 Payasdaddy said:

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But an etf these days are less than 1/10th of one percent I am also a CPA studying for the PFS credential ( will be a fiduciary too if I go thru with all 4 parts) Not against a planner at all, but really only fee only It takes 5 minutes to pick 3-4 good funds Vanguard Wellington and fidelity contra fund A solid mid cap and small cap etf Throw in a reit and 25 % international/ emerging market Bonds are in the Wellington fund (1/3). Can’t really go wrong there Paying for a financial plan makes sense. 1% hand holding assets? Can’t do it Jmho

The funds you mentioned all carry fees in excess of 1%. 25% in emerging markets is way too much. 10% maybe. And bond funds are dangerous, especially with interest rates rising.

My 1% fee includes all planning services, and most fiduciaries operate the same way. ETFs and Mutual Funds do not provide any planning services- you are on your own, and Robo Advisors are, well, robots.

Mine was with a big gank and the fees were not worth it. He promised he could get me in the same funds I had with my 401k and it was not true. I've done better with help from financial planner friends and my own research. Just my 2 cents.

Someone socks away 33 grand a year for 30 years saving a total of 1 million for retirement, assuming 4 percent growth will pay their 1% advisor over 200 grand in fees and end up with a portfolio of about 1.5 million
Thanks a ton of cash for hand-holding.

you really know what financial planners do.

Mine doesn't hold my hand, he's constantly transacting, not churning since he doesn't get paid by the transaction, making moves based on the research they do.

It's not for everyone, some people think "I can pick ETF funds, why do I need a financial planner"

if that's all that is in your estate sure, but if you have children, assets, multiple investment vehicles, and other retirement goals you may decide it is for you.

Maybe if you're considering using one you should meet with a few and hear what they say and then decide.

I didn't use one for a long time and looking back I wish I did.

Some of you may not need one, I did (and do)

In comment 15120495 pjcas18 said:

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you really know what financial planners do. Mine doesn't hold my hand, he's constantly transacting, not churning since he doesn't get paid by the transaction, making moves based on the research they do. It's not for everyone, some people think "I can pick ETF funds, why do I need a financial planner" if that's all that is in your estate sure, but if you have children, assets, multiple investment vehicles, and other retirement goals you may decide it is for you. Maybe if you're considering using one you should meet with a few and hear what they say and then decide. I didn't use one for a long time and looking back I wish I did. Some of you may not need one, I did (and do)

Well said PJCAS!

Most think a financial planner is only for investments. Pick a few funds and that is it. These are the people that just don't get it. The value I provide my clients goes way beyond, and my 1% fee is well worth the investment.

Markets would be 25%, not just emerging markets. That would be 5-7 %
I know what a financial planners does
Estate planning, possibly some tax planning ( although Cpa much better choice)
Insurance etc.
My fidelity contra fund cost is 1/10th of 1%. My wife’s work negotiated that
Vanguard Wellington fees are small
My retirement accts as of today are 1 million area, why on earth am I paying something to manage my money?
Seriously, buy a kiplingers, pick a few diversified etf’s. Check them one a yr to rebalance
Not paying someone 10k to manage it, especially with no skin in the game. Heck. That’s 20% of my return out the door. Doing it myself has worked well

Estate planning pretty simple too
Durable power of attorney, revocable trust, health care proxy. Will. Not that complicated
Have a Medicaid trust set up for mom ( with help of attorney)
Unless it’s a complex area, wealth management just not worth it for most with less than 1 million.
And I am in the business ( being a CPA)
Pay the planner for the other stuff mentioned. 1% to pick etf that u could pick yourself? Just don’t see the value. They aren’t beating the market, at least 96% of them.

Any planner that says they can beat the market average is not your friend.
Target retirement funds from Vanguard, Fidelity, etc are great and they cost virtually nothing.
Now if you want to pay a financial advisor to work with you that's great but 1% is way way too much. Better off using someone that charges a flat fee for advice although they might be hard to find because the big bucks in this business is convincing people that it's too complex to figure out themselves and charging that 1%. I mean come on "The value I provide my clients goes way beyond, and my 1% fee is well worth the investment."

Agreed
What can make sense is a fee only one time financial plan
Cost may be 5k but u only need to revisit every decade or with major life changes
No reason any some what educated person ca;t rebalance themselves
Why on earth I have to pay someone 1% to picks etf.
The other stuff, like estate and insurance stuff, sure. Some fee only outlays make sense.
1% for some nice power point presentation? Nah. Only thing my old man got out of his Cpa/cfp was a crapload of annuities and 1 very good long term care policy that was worth its weight in gold
30 k premiums = 400k payout to nursing home. Was there 4 yrs. not a dime out 9f his pocket

it sounds like the best option is based on your knowledge of the markets and your specific needs. If you've got no time or interest in doing all the research and legwork needed to set everything up for yourself, kids college, retirement, legal, etc, then a fee-only planner is the way to go. If you'd rather not bother with any of it, the 1% fee might be worth it for you (if your net worth is on the higher end).

I will say, having sat through many advisor plans (independent as well as the big brokerage firms), I learned a lot about the markets and at least the basics of where we were at retirement-wise and what a professional strategy looked like going forward.

Personally, we used a planner to get life insurance, disability insurance, and will/trust/health care proxy in order, at no additional cost to us other than the premiums. I would have never gotten these things in order on my own. Our guy even reviewed and recommended a disability plan outside of his network, one that I found from my State Farm agent, even though he'd make no commission on that product.

Think u summed it up pretty well
Depends on your comfort level, what u need, amount of assets etc

In comment 15120649 GiantCuse said:

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Personally, we used a planner to get life insurance, disability insurance, and will/trust/health care proxy in order, at no additional cost to us other than the premiums. I would have never gotten these things in order on my own. Our guy even reviewed and recommended a disability plan outside of his network, one that I found from my State Farm agent, even though he'd make no commission on that product.

Clarification, the will/trust/proxies costs about $1200 to the law firm, but the kick in the butt to get it done was free.

There are many misconceptions in this thread, which I feel the need to correct because people’s financial decisions are some of the most important decisions they will make in their entire life, especially if they are very young (compound interest) or older, nearing retirement, where making a mistake could have massive ramifications on their lifestyle in their golden years.

1) Financial planners are not there to help you “beat the market”. Any diversified portfolio that isn’t 100% stocks will not beat the market, it is not designed to, it is designed to reduce volatility and diversify risk. If you want someone to “beat the market” go pay a hedge fund 2%( flat fee) and 20% (of any return they generate) — but even they haven’t had a great run lately.

2) Financial planners help you avoid making massive mistakes. Retail investors are their own worst enemy, they always sell at the exact wrong time. Financial plans give you confidence to stay the course when things get bad. How many people panicked in March ? (and don’t tell me you didn’t, because even Wall Street was worried). Simply put, one bad financial decision (panic sell, over leveraging, etc) can set you back YEARS due to the arithmetic of loss. Similarly, compound interest is extremely powerful. Pay someone to help you avoid making the big mistakes - it will pay for itself over time.

3) Do you research. There are a lot of very good and ethical financial planners - there are also a lot of people I wouldn’t want anywhere near my grandmothers money. And if you are very young, a planner is probably not right for you. Everyone’s situation is different and not everyone needs a financial planner.

I work with a guy at Goldman. In 2020 we had a 12% return on our public equity (75/25 US/Global) and 3.5% on Fixed Income. This during a world pandemic...

I don't know an ETF from a mutual fund, etc., etc.

I am a year from retirement and in a nice position.

I could kiss my guy I'm so pleased with his work and advice. Plus, if I email him on a Friday night at 10:00 pm, I hear back from him that night...seriously. Zoom meetings for as many dumb assed questions as my wife and I can come up with, usually a day after I email him.

For me, anyway, worth every penny.

S&P returned over 16% last year. Vanguard total bond over 7.5%. Goldman
didn't do so hot. You paid extra fees to underperform, it's Nate Solder investing!

Is paying 1% for hand holding , as in not selling in march 2020
Fee only planning makes sense, not 1% a yr
"Beating the market " , of course i mean the portion i own in stocks
Solid asset allocation is diversifying
I am not paying someone 1% to manage what may be 2 million in a decade
Thats 20k a yr. in reality thats the amount that i would take out each yr for vacation expenses before rmd hits. Basically planner be taking my vacation. Hell no. My fixed expenses are covered from wifes pension and both our social security. It just doesn't fit for me. Maybe someone else

you keep (after taxes and fees). We had a financial planner and it was a good deal for him. We switched to a Personal Advisor Service under Vanguard. We have a financial plan and consult several times a year. We wanted this because we are retired and my wife wanted a fiduciary to have someone to guide her should I predecease her.

In comment 15120670 dannysection 313 said:

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I work with a guy at Goldman. In 2020 we had a 12% return on our public equity (75/25 US/Global) and 3.5% on Fixed Income. This during a world pandemic... I don't know an ETF from a mutual fund, etc., etc. I am a year from retirement and in a nice position. I could kiss my guy I'm so pleased with his work and advice. Plus, if I email him on a Friday night at 10:00 pm, I hear back from him that night...seriously. Zoom meetings for as many dumb assed questions as my wife and I can come up with, usually a day after I email him. For me, anyway, worth every penny.

All due respect you shouldn't be pleased with that performance. Sounds like the service is good but the numbers aren't.

a financial planner can provide, and others believe it is a waste of money. It may also depend on the size of your assets and your overall knowledge of the financial markets and how much time you have to dedicate to portfolio management and financial planning. I strongly disagree with the posts that say a planner is a waste of money.

Truth be told, I am a Certified Financial Planner, and what I do know is my clients appreciate the value I deliver to them and the services I provide on top of the management of assets. Some may argue that a low cost ETF or mutual fund gets the job done, but if you are sophisticated enough you will realize this is a false sense of security or justification. It comes down to managing risk, and aligning goals and risk tolerance with an overall financial plan. Good luck getting this analysis from an ETF or mutual fund provider.

To the original poster, and anyone else considering the services of a financial planner, do your due diligence and interview a few different planners. I would recommend you speak with independent firms who are fiduciaries, and you take into consideration the individual advisor's track record and experience.

I just don’t believe that forking over 1% for money management for a solid middle class retirement portfolio of 1-2 million is worth it
Most planners aren’t agile enough to get ahead of the market to minimize risk
I can get myself 5-6 funds to diversify enough. Being either low cost funds or etf
U do have to be somewhat well versed to do it yourself.
What’s the point of paying 15k to a planner on a 1.5 million portfolio hen I am only grabbing 60k a yr
25% to you guys? You aren’t that agile and u sure ain’t minim8zing my risk enough to fork over a couple of Italy trips each yr
Maybe it’s because I am comfortable handling my own money

In comment 15121194 Payasdaddy said:

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I just don’t believe that forking over 1% for money management for a solid middle class retirement portfolio of 1-2 million is worth it Most planners aren’t agile enough to get ahead of the market to minimize risk I can get myself 5-6 funds to diversify enough. Being either low cost funds or etf U do have to be somewhat well versed to do it yourself. What’s the point of paying 15k to a planner on a 1.5 million portfolio hen I am only grabbing 60k a yr 25% to you guys? You aren’t that agile and u sure ain’t minim8zing my risk enough to fork over a couple of Italy trips each yr Maybe it’s because I am comfortable handling my own money

I understand what you are saying Regarding fees and comfort in managing one's finance, but in what world is 1-2,000,000 saved for retirement considered "solidly middleclass"? The median retirement savings for people in their 60s in this country is 172,000.

1-2 million is middle class, Reason why we plan on relocating to Nevada, az or Texas and lower cost of living in 9 yrs, 11 months and 18 days. ( wife’s retirement). Hopefully enjoy the fruits of our labor. Someone with 200k doesn’t need a planner , just decent asset allocation and to max out 401k

Anywhere. Salaries may be way up in California but the cost of living is so sky high that nobody is saving for retirement.

I don't care. However what is a reasonable annual rate of return on your money using mutual funds etc? 15% 20% ...?

2 earners, for 20 yrs
Plus huge bull market. No too difficult to get over 1 million in retirement
I live like i am middle class, spend less than we earn
Think like we are middle class. Hence we are
The day i start thinking we are more than that is the day shit starts falling apart
So yes, maybe the numbers say more but mindset stays the course

In comment 15121266 Payasdaddy said:

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2 earners, for 20 yrs Plus huge bull market. No too difficult to get over 1 million in retirement I live like i am middle class, spend less than we earn Think like we are middle class. Hence we are The day i start thinking we are more than that is the day shit starts falling apart So yes, maybe the numbers say more but mindset stays the course

You're doing the right thing. Live below your means and the rest will take care of itself. However, like you said, the numbers don't support 1,000,000 and middle class anywhere. Also don't sacrifice too much today for tomorrow. It's always a fine line but in my job I've seen far too many retirees unable to live their retirement dreams because of unexpected health issues.

Wasted money on 2 maui timeshares but we do put them to good use and enjoy them quite a bit
Health way more important than $$$$ for sure
We have great post retirement health package with the kaiser so at least we got that covered. Almost 57, i am strictly seasonal tax season work at this point, wife still has ten yrs
So try to do 3-4 vacations a yr to ease her pain
Besides some good vacations, try to stay within a reasonable monthly budget
Definitely pay ourselves first, max out 401k, wifes after tax roth 401k too so we have a tax free bucket in retirement. Bought a house that doesn't stretch us too much, luckily in 2012. Be tougher affording our house now. Hopefully we reap the rewards next decade

In comment 15121116 johnnyb said:

Quote:

a financial planner can provide, and others believe it is a waste of money. It may also depend on the size of your assets and your overall knowledge of the financial markets and how much time you have to dedicate to portfolio management and financial planning. I strongly disagree with the posts that say a planner is a waste of money. Truth be told, I am a Certified Financial Planner, and what I do know is my clients appreciate the value I deliver to them and the services I provide on top of the management of assets. Some may argue that a low cost ETF or mutual fund gets the job done, but if you are sophisticated enough you will realize this is a false sense of security or justification. It comes down to managing risk, and aligning goals and risk tolerance with an overall financial plan. Good luck getting this analysis from an ETF or mutual fund provider. To the original poster, and anyone else considering the services of a financial planner, do your due diligence and interview a few different planners. I would recommend you speak with independent firms who are fiduciaries, and you take into consideration the individual advisor's track record and experience.

Very well put. When I was younger, I would do my own research, my own trading/investing and it started to consume a lot of time. Checking my E*Trade status and making moves continually was not only time eating, it was stressful too. when our portfolio got to a certain size, we used a financial planner.

What she has provided has been a great service. We meet quarterly, even if it is just a brief call to discuss any recent changes or big future plans, and she appraises us of any dramatic shifts to expect. When COVID hit, she laid out the expected impacts, positive or negative, and she's been pretty dead on.

I don't have to worry about frequently trading, she handles it for us, we select the risk we want to take, and our portfolio has gone up steadily.

Do your due diligence. Ask the questions about how things will be handled, what fees there are, and what services to expect. A good financial advisor is there to work with you, not for you, and you should agree on goals and objectives and the risk tolerance you're willing to take. They can explain that to you very clearly. It is well worth 1%

Weight in gold
But for mostly things outside of money management
Hard for me to rationalize why after a 4% rate of return ( after inflation)
That I would give 25% to a money manager
But if it gives people the comfort they need, or if they just don’t want to put in the time ( which can be quiet a bit)or deal with the stress, go for it
Whatever gets one to the place where they are financially comfortable in retirement and not stressed out
1% is well worth it if the alternative is not planning properly