Once again not directed at Dewey, sorry.
Haven’t a clue about the price. A lot of these places charge 1% of portfolio for ongoing arrangements.
That’s what we tried for, with a financial adviser recommended by a friend who seemed to be well-informed about financial matters. We paid about $600 for a three-meeting consultation.
Sadly, said financial adviser suggested an overly complicated portfolio of 12 or 15 mutual funds, most with active management and higher ERs than I was comfortable with, and repeatedly solicited our business. The last straw was him insisting that we didn’t need to max-out tax-deferred accounts at work (which wouldn’t be under his management, of course).
It wasn’t all bad, we got some good advice about asset allocation, given our particular situation. Still, I’m more comfortable with a simple three-fund portfolio, maxing out our 457(g)s and Roth IRAs, and putting the taxable investments into a tax-efficient mutual fund.
My advantage is that Mrs. Ispolkom agrees with the general approach we’re using, while you are starting out with disagreements.
You’re imagining there’s “beginner” financial advice and “advanced” financial advice and they you’re ready to graduate to the second category but there’s really not. The reason it’s hard to find the type of person you’re looking for is because that’s not what the industry is geared up to provide.
1% seems like a small amount… until you realize that in retirement, 4% is the recommended withdrawal.
So, that small 1% is now 25% of your income!
You might be looking for a “fee-only” CFP? Google that and see what comes up, I guess.
Meh, you’re just looking in the wrong place, or more likely asking the wrong questions. I’m a financial advisor for a large firm as well, and offering a fee-based financial plan is extremely standard across the industry.
Ruken, you’re looking for a Certified Financial Planner who will do a fee-based financial plan for your household. The standard price around me is $1000, with no obligation beyond that. Of course when we do a plan, we’d love to retain your business beyond that, but we’ve done them for the self-investor plenty of times, and gotten referrals from them.
One thing you might want to do is ask your friends for a referral. Is there someone that you know is doing well financially? Ask if they’re using someone.
No, all my investments are self directed. That’s why I went with the more general “here’s how to find one” advice. Best of luck!
I’d recently retired and was changing from the accumulation phase to the consumption phase of my assets. I had a plan in mind, and was pretty sure I had the will power to stick to it, mostly because it’s dead easy, but wanted someone to just take a look at it.
I auditioned several financial planners by attending some of those free seminars you see advertised in the financial section of the newspapers. Frankly, most of them were thinly veiled inducements to purchase financial products that I considered unsuitable for most people, but one CFP seemed more honest than most and didn’t push annuities, which I liked, and he worked as a fee-only, which is the only way I wanted to work.
Once you get to the point where you have a decent amount of money to invest there is no shortage of people willing to work with you for a piece of the action on an assets under management basis (AUM). Fees run from what I consider quasi-criminal, 1.5% or so to a more reasonable 0.3% at Vanguard. The average is around 1.0% on the first million dollars.
I didn’t want to pay an AUM fee because even though 1% sounds small if your portfolio generates an average 4% return 1% is 25% of that return on an average year, and in a down year you’ve lost even more money.
So now that it’s too late to make a long story short, I hired this guy. Fee only. He charged me $2,200 to put together a financial plan. There was a lot of information gathering and a couple of one to two hour meetings. They do the whole risk tolerance, personal investment profile assessment. They looked at different social security strategies and did risk assessments for long term care scenarios and insurance plans. I’ve got projected net assets reports going out to the age of ninety, which I think is pretty optimistic, but I’ll do what I can.
As part of it I have access to a wealth planning software tool that I can use to make my own changes to the plan if my circumstances should change, and I can use it to get instant real time reports on my net worth. I usually spent a few hours every quarter aggregating all that data, so that’s worth something too.
I’m glad I spent the money. There weren’t any major changes in my plans, I didn’t even tweak my allotments, but it’s nice to look at the glide path confirmation every once in a while. Plus, in the unfortunate event of my demise, my widow is not a financial person, and will need guidance.
Which is why I have stated multiple times that I am not interested in a long-term relationship.
Thank you, Bill Door, for taking the time to share that. Sounds like I’ll need to do some auditioning.
We ended up hiring a manager, but prior I looked at several fee only people.
It looked like in a lot of cases the original plan fee would be in the $1,000 to $2,000 range, but once they had all of your information organized, ongoing yearly ‘check-ups’ were generally in the one hour of time range (+/- $500).
Doesn’t sound like you would necessarily need or want that, but something to keep in mind also.
Could be good for a major change in circumstances, e.g. buying a house, inheritance, having triplets in your forties (relative of mine).
I have considered posting something like the OP. I’ve managed my own money (which is divided between the Thrift Savings Plan and Vanguard) for over 30 years. I’ve never bought an individual stock or bond, only mutual funds.
But I’d like to get a professional’s opinion on whether the blend of stocks across my four different funds is good. I’m talking about the diversification, the companies’ capitalizations, whether the stocks pay dividends, etc. Also tax angles, which seem more pressing as I get closer to retiring.
It amazes me how many people don’t realize how costly a 2% annual fee on their entire portfolio can be. If you stay with that financial advisor for 20 years, they will have 40% of (some average of) your net worth. Gold-digging spouses can be had for less.
I’ve concluded that one doesn’t need a lot of knowledge to competently invest as a layperson to build long-term wealth, but since there’s a lot of intentional noise in the financial services industry, it can be hard to acquire that knowledge.
That index card thing is great. When friends and colleagues ask me for tips about investing, I’m going to give them that for a start.
If you have an account directly with Vanguard, they have advisors on staff, although the level of service is dependent on the size of your account.
I talked to Fidelity today. I get the impression that they are no fee at all for money not under management, which can be any of it you want at any time you want. Also in signing up, at least at the level I was asking about, they offer finanical advice on the way in, as part of their basic service for a new customer.
So I’m asking myself how and when do I need guidance? How much of my money will be not under management anyway?
I’m pretty sure you can get the advice you need, and move your money away from management and associated fees any time.
A friend who recently retired shared with me his experience with a financial planner. It was a fee-only situation (which I highly HIGHLY recommend). The output from the planner was a series of what I call regression analysis saying “here is your goal, here is your likelihood of reaching the goal based on these scenarios, scenario 1 gives you a 60% chance, scenario 2 gives you a 70% chance”, etc. The result was a re-balance of their portfolio, and an understanding of how much they could take-out (and spend) each year from the pot.
(As a side note, this friend only shared information on their 401/IRA and Social Security with the planner. They neglected to mention their multiple pensions - which IMHO would have drastically impacted what the planner would have said. Kinda odd, if you ask me.)
More than five years ago my sister set me up an appointment with a financial planner that she really liked. It was about $500 for what would have been a 2 or 3 visit review. Since I don’t live in the same state as my sister, I did the homework (a big financial survey) ahead of time and emailed it in. I did the goal interview and basic first review in person. Then I got sent a big report with charts and suggestions and a spreadsheet that could re-figure some of the graphs if details changed. That last usually includes another visit.
Basically, I wasn’t doing badly, but the retirement, as it was, would have been mediocre rather than good. I had identified one or two possible ways to improve things, and one, especially, was confirmed to be a good idea. I’ve completed that upgrade. It was a relief to have someone else draw everything together into confirmed (as much as investments can be) numbers. It was also motivating.
I consider the money well spent.