### Author:  [@Section\_Maker\_Jupe](https://boards.straightdope.com/u/Section_Maker_Jupe)
#### Post date: [October 27, 2017, 4:08pm UTC](https://boards.straightdope.com/t/investment-advice/799999/1 "2017-10-27T16:08:34Z")
I’m generally not trusting of anything involving giving my money to someone else, despite this I opened a teeny IRA with Vanguard. I’m kinda frozen in place otherwise, even worried about my minor investment with them :eek:
I wish to put more cash into something other than my IRA, with perhaps more payback and risk, but should I trust their advisors etc?
Are other types of financial advisors worth all the hype? I dont really trust “anything” anymore, so am somewhat frozen into place.
I have savings in a bank, but am pretty intimidated by the learning curve required to move things. I’ll be dead before I can figure it out:D
Vanguard seems to have a good reputation, any suggestions for me? (or pm me links?)
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### Author:  [@engineer\_comp\_geek](https://boards.straightdope.com/u/engineer_comp_geek)
#### Post date: [October 27, 2017, 4:14pm UTC](https://boards.straightdope.com/t/investment-advice/799999/2 "2017-10-27T16:14:23Z")
**Moderator Action**
Since this is more advice and opinion than factual, let’s move it to IMHO (from GQ).
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### Author:  [@StusBlues](https://boards.straightdope.com/u/StusBlues)
#### Post date: [October 27, 2017, 4:43pm UTC](https://boards.straightdope.com/t/investment-advice/799999/3 "2017-10-27T16:43:12Z")
The folks at Freakonomics are pretty big fans of the Vanguard Index funds. You may want to listen to [this podcast](http://freakonomics.com/podcast/stupidest-money/). Short version: put your money in a market index fund with low fees.
[Their following entry](http://freakonomics.com/podcast/everything-always-wanted-know-money-afraid-ask/) claims that all you really need to know about finances can fit on an index card. You might like that also.
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### Author:  [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)
#### Post date: [October 27, 2017, 5:07pm UTC](https://boards.straightdope.com/t/investment-advice/799999/4 "2017-10-27T17:07:05Z")
> [@Section\_Maker\_Jupe](#):
>
> Are other types of financial advisors worth all the hype?
Generally, no.
If you have a lot of money and some special circumstances, then it makes sense to pay a financial advisor.
The other time it often makes sense is when you’re not comfortable doing it yourself, and you want someone professional to hold your hand. But it sounds like you kind of have the opposite problem
> [@](#):
>
> I dont really trust “anything” anymore, so am somewhat frozen into place.
>
> I have savings in a bank, but am pretty intimidated by the learning curve required to move things. I’ll be dead before I can figure it out:D
To move things, do you mean to transfer money to your Vanguard account? I’m pretty sure you can just write a check and mail it in. Are you comfortable with that?
> [@](#):
>
> Vanguard seems to have a good reputation, any suggestions for me?
[Three Fund Portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio#Vanguard_funds).
Simple, easy, and very likely within 99% of optimal for most people. Pick some percentages (it honestly doesn’t matter that much which. Splitting your money in thirds is fine, and you can always change it later) and put a chunk in each of the three funds. Whenever you add more, add to the fund that’s out of whack. Once a year, sell some of the funds that are higher and buy the funds that are lower. That’s it. You’re done. Wait for retirement.
Since you seem cautious, make sure you’re emotionally ready for the possibility of losing money for a while. The _worst_ thing you can do is make an investment, see that it goes down a bit (or even a lot), sell in a panic, then in a few years, when the stock market is booming, invest again, etc. If you’ve never been through a down market: It’s scary, but it’ll be ok. Don’t panic.
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### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 5:14pm UTC](https://boards.straightdope.com/t/investment-advice/799999/5 "2017-10-27T17:14:57Z")
The money you pay an advisor (who don’t even have to possess any kind of certification to call themselves advisors) plus fund fees will obliterate most of your return. But it does sound like you need someone to walk you through your risk appetite and liquidity needs. For someone reasonably young, I’d just put it all in a low-fee Vanguard index fund.
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### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 5:32pm UTC](https://boards.straightdope.com/t/investment-advice/799999/6 "2017-10-27T17:32:58Z")
> [@ReticulatingSplines](#):
>
> The money you pay an advisor (who don’t even have to possess any kind of certification to call themselves advisors)
Advisors have to pass the Series 6, undergo ongoing continuing education, are regulated by FINRA, and have to comply with their broker dealer. But yes - there’s no “certificate” for that.
> [@](#):
>
> The money you pay an advisor \ plus fund fees will obliterate most of your return.
The average return of the S&P 500 is about 7%. I’m unaware of any combination of high fee funds and even the most unscrupulous advisor that would come close half of that. I’d never suggest someone latch onto someone that charges (all in) 3.5%, but your statement is absurd.
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### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 6:05pm UTC](https://boards.straightdope.com/t/investment-advice/799999/7 "2017-10-27T18:05:30Z")
> [@Munch](#):
>
> Advisors have to pass the Series 6, undergo ongoing continuing education, are regulated by FINRA, and have to comply with their broker dealer. But yes - there’s no “certificate” for that.
Yeah, I know certifications and state requirements exist. My point is that unlike a doctor, anyone can call him or herself a “financial advisor.”
> [@](#):
>
> The average return of the S&P 500 is about 7%. I’m unaware of any combination of high fee funds and even the most unscrupulous advisor that would come close half of that. I’d never suggest someone latch onto someone that charges (all in) 3.5%, but your statement is absurd.
Well it’s disingenuous of you to assume that your returns under a financial advisor would be the same as the average broad-market return, but okay, you caught me, I exaggerated.
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### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 6:34pm UTC](https://boards.straightdope.com/t/investment-advice/799999/8 "2017-10-27T18:34:42Z")
> [@ReticulatingSplines](#):
>
> Yeah, I know certifications and state requirements exist. My point is that unlike a doctor, anyone can call him or herself a “financial advisor.”
You mean outside of the requirements I stated? Then I guess I don’t understand what distinction you’re trying to make. I mean other than going to medical school and passing your boards, anyone can call themselves a doctor as well.
> [@](#):
>
> Well it’s disingenuous of you to assume that your returns under a financial advisor would be the same as the average broad-market return, but okay, you caught me, I exaggerated.
I didn’t make that claim, did I? But if you’re going to claim that an advisors don’t have value, take it up with Vanguard:
[https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE\_ResPuttingAValueOnValue](https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE_ResPuttingAValueOnValue)
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### Author:  [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)
#### Post date: [October 27, 2017, 6:52pm UTC](https://boards.straightdope.com/t/investment-advice/799999/9 "2017-10-27T18:52:55Z")
> [@Munch](#):
>
> The average return of the S&P 500 is about 7%. I’m unaware of any combination of high fee funds and even the most unscrupulous advisor that would come close half of that. I’d never suggest someone latch onto someone that charges (all in) 3.5%, but your statement is absurd.
Half is an exaggeration, but your analysis isn’t correct. And the amount lost to fees over time can be quite large.
For one, 7% is the nominal return. If you assume 2-ish% inflation, you get a real return closer to 5%. Real return is the number that matters.
High-ish fee funds and advisory fees can easily be about 1% point higher than you’d pay doing it yourself, say, 0.25%. I mean, with a really bad advisor who prompts you to churn and pay a bunch of sales loads, they could be way higher, but 1% is a reasonable estimate.
So, your real return on your own is maybe 4.75%, and with a highish fee advisor is maybe 3.75%.
Now, add compounding. Doing your own thing for 30 years, you end up with ~4 times your initial investment (real). Going with the extra 1% advisor/funds, you end up with ~3 times.
So, over an investing lifetime, you’re losing about 1/3 of your return to fees compared to a basic low-fee index portfolio. That’s substantial, and not that far from 1/2.
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### Author:  [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)
#### Post date: [October 27, 2017, 6:54pm UTC](https://boards.straightdope.com/t/investment-advice/799999/10 "2017-10-27T18:54:24Z")
> [@ReticulatingSplines](#):
>
> Yeah, I know certifications and state requirements exist. My point is that unlike a doctor, anyone can call him or herself a “financial advisor.”
Utterly untrue. Series 7, Series 66, Life, Accident and Health insurance licenses as well as 40+ hours of CE each year. Is it easier than becoming a doctor? Sure is. Can anyone do it? Not by the pass-fail rate of the exams they can’t.
Honestly, I spend most of my time life-coaching people into either saving money at all or not spending what they have frivolously.
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### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 6:59pm UTC](https://boards.straightdope.com/t/investment-advice/799999/11 "2017-10-27T18:59:57Z")
> [@Munch](#):
>
> You mean outside of the requirements I stated? Then I guess I don’t understand what distinction you’re trying to make. I mean other than going to medical school and passing your boards, anyone can call themselves a doctor as well.
Yeah, well first try practicing medicine without a degree, and then try practicing as an unaccredited financial advisor and see which one gets shut down faster.
> [@](#):
>
> I didn’t make that claim, did I? But if you’re going to claim that an advisors don’t have value, take it up with Vanguard:
>
> [https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE\_ResPuttingAValueOnValue](https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE_ResPuttingAValueOnValue)
If their investment acumen were THAT valuable, they would stop selling shit to people and just make money by investing directly.
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### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 7:09pm UTC](https://boards.straightdope.com/t/investment-advice/799999/12 "2017-10-27T19:09:02Z")
> [@Jonathan\_Chance](#):
>
> Utterly untrue. Series 7, Series 66, Life, Accident and Health insurance licenses as well as 40+ hours of CE each year. Is it easier than becoming a doctor? Sure is. Can anyone do it? Not by the pass-fail rate of the exams they can’t.
Are you intentionally being obtuse? You really don’t see the difference between a required license and an optional one?
[http://time.com/money/3197721/why-financial-planners-should-be-more-like-hairdressers/](http://time.com/money/3197721/why-financial-planners-should-be-more-like-hairdressers/)
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### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 7:10pm UTC](https://boards.straightdope.com/t/investment-advice/799999/13 "2017-10-27T19:10:45Z")
> [@ReticulatingSplines](#):
>
> Yeah, well first try practicing medicine without a degree, and then try practicing as an unaccredited financial advisor and see which one gets shut down faster.
So you agree they’d both get shut down. Thank you for conceding the point.
> [@](#):
>
> If their investment acumen were THAT valuable, they would stop selling shit to people and just make money by investing directly.
I honestly have no idea what that could possibly mean, especially as it relates to the link I posted.
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### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 7:12pm UTC](https://boards.straightdope.com/t/investment-advice/799999/14 "2017-10-27T19:12:19Z")
> [@Munch](#):
>
> I honestly have no idea what that could possibly mean, especially as it relates to the link I posted.
Color me surprised
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### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 7:14pm UTC](https://boards.straightdope.com/t/investment-advice/799999/15 "2017-10-27T19:14:33Z")
> [@ReticulatingSplines](#):
>
> Are you intentionally being obtuse? You really don’t see the difference between a required license and an optional one?
>
> [http://time.com/money/3197721/why-financial-planners-should-be-more-like-hairdressers/](http://time.com/money/3197721/why-financial-planners-should-be-more-like-hairdressers/)
Things you should do today:
- read that article in its entirety
- learn the difference between “financial advisor” and “financial planner” - specifically as it relates to government oversight and regulation.
---
### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 7:18pm UTC](https://boards.straightdope.com/t/investment-advice/799999/16 "2017-10-27T19:18:47Z")
> [@Munch](#):
>
> Things you should do today:
>
> - read that article in its entirety
> - learn the difference between “financial advisor” and “financial planner” - specifically as it relates to government oversight and regulation.
Okay. One thing you should do today is learn that changing your title from financial planner to financial advisor subjects you to zero additional regulation.
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### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 7:23pm UTC](https://boards.straightdope.com/t/investment-advice/799999/17 "2017-10-27T19:23:34Z")
> [@ReticulatingSplines](#):
>
> Color me surprised
I initially thought you were suggesting that a person could become independently wealthy by leveraging nothing more than the 2.5-3% that an advisor brings to the table to your average DIYer, but assumed you were able to quickly realize that doesn’t provide any seed money for an initial investment, or that you actually read the article and saw that a good portion of the 3% was something that a savvy investor is already doing, and that absolutely no where in that article is it suggesting that the 3% is on top of average market/indexed gains. But hey - it’s your bone to chew, so have fun.
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### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 7:27pm UTC](https://boards.straightdope.com/t/investment-advice/799999/18 "2017-10-27T19:27:07Z")
> [@ReticulatingSplines](#):
>
> Okay. One thing you should do today is learn that changing your title from financial planner to financial advisor subjects you to zero additional regulation.
False - this has been pointed out to you multiple times now, with the actual requirements listed that you need for a title of “financial advisor”.
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### Author:  [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)
#### Post date: [October 27, 2017, 7:30pm UTC](https://boards.straightdope.com/t/investment-advice/799999/19 "2017-10-27T19:30:37Z")
> [@Munch](#):
>
> False - this has been pointed out to you multiple times now, with the actual requirements listed that you need for a title of “financial advisor”.
Haha, [no](http://www.meyersmoney.com/frequently-asked-questions/what-is-a-financial-advisor.html).
"Unfortunately, the term “financial advisor” has come into common usage. The unfortunate thing about it is that the term has no precise meaning whatsoever. Anyone may call himself a “financial advisor”. Just because someone calls himself a “financial advisor” does not mean that he has any specific education, background, experience, or certification which actually qualifies him to give financial advice.
What makes this especially unfortunate is that the most common usage of the term “financial advisor” nowadays is for a salesperson. Stock brokers and insurance agents, especially, call themselves “financial advisors” all the time."
---
### Author:  [@Munch](https://boards.straightdope.com/u/Munch)
#### Post date: [October 27, 2017, 7:40pm UTC](https://boards.straightdope.com/t/investment-advice/799999/20 "2017-10-27T19:40:41Z")
I’ll notify FINRA, the SEC and the NASAA that Meyers Wealth Management has figured it all out, and that their 70 years of oversight and regulation has been all for naught.
[Next page](https://boards.straightdope.com/t/investment-advice/799999.md?page=2)