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Best Way to find a Fee Based Financial Planner?

Discussion in 'TUG Lounge' started by Sugarcubesea, Jun 9, 2019.

  1. Sugarcubesea

    Sugarcubesea TUG Member

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    I’ve had my financial planner for some time now and he recently merged his business with a bigger company and I now feel his advice is more to his benefit than to mine.

    What is the best way to find a fee based financial planner?

    Thanks
     
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  2. Luanne

    Luanne TUG Review Crew: Veteran TUG Member

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    We went by a personal referral. A friend at work was using a small company and she and her husband were very pleased with them. Dh and I went in and talked to them at length and decided to use them as well. We started with them before we retired and they helped up figure out when we could retire, if we could handle mortgages on two properties while we were moving from one state to another. Our investments have done well with them and now both of our dds have accounts with them as well.

    By fee based do you mean the financial planner just takes a flat fee? Our works on a percentage so we feel they are working for us because the more we make, the more they make.
     
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  3. artringwald

    artringwald TUG Member

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    The term is fee-only financial advisor. If they're not fee-only, they may be making investment decisions that benefit them more than you. NAPFA is an association of Fee-Only financial advisors, and you can search for a local member on their web site.

    https://www.napfa.org/about-us
     
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  4. Brett

    Brett Guest

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    Along with the NAPFA recommendation I would also suggest Schwab and Vanguard's fee based advisory service

    financial_advice_16-51.jpg
     
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  5. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    I just went through this process. I decided to go with a Garett Network few ONLY guy who does not hold your assets. He does a plan with you for a set fee and is available all year for help included in that fee. (for us it was $1500) Going forward you can pay him by the hour as you need help or pay a yearly retention fee.

    He uses a holistic approach and evaluates all aspects of your financial life.

    Very happy so far and glad to not have to pay someone a percentage of our assets.

    Fee only is better than fee based. Make sure they are a fiduciary.
     
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  6. Luanne

    Luanne TUG Review Crew: Veteran TUG Member

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    I just want to ask a question. If someone is taking your money monthly, or however often the fee is assessed, what makes you think they'll be working better for you? They get their fee one way or another.
     
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  7. artringwald

    artringwald TUG Member

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    If they are fee-only, they don't get commissions or bonuses for the investments they recommend so there is no conflict of interest. You make the final decisions yourself, and the advisor doesn't have access to your accounts.
     
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  8. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    Some fee based advisors do not get commissions but their fee involves 1-2% of your assets or whatever they determine and you agree on.

    The way I feel about it is- everything is computerized today. Do you think these advisors are giving every single one of their hundreds of clients personal attention after the initial set up?. I think not.
     
    Last edited: Jun 10, 2019
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  9. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    Right-kind of- that is the difference between fee based and fee only- but many advisors who do not get commission and "only" a percentage of assets will say they are fee only.

    And they are still considered fiduciaries.
     
  10. capjak

    capjak TUG Member

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    I really believe that if you are going to hire someone you will need to know enough about finances to do it yourself. If you do not know enough to do it yourself than you likely can not evaluate the FA adequately.
    Go to boglehead.org and look at their reading list or ask some questions (several that contribute on their are FAs and have written several books on overall finanace).
     
  11. Luanne

    Luanne TUG Review Crew: Veteran TUG Member

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    And my question still is, if someone is getting a fee from you every month, or year, are THEY giving every single one of their hundreds of clients personal attention after the initial set up. What exactly are you paying the fee for?
     
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  12. Brett

    Brett Guest

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    you're paying for the investment advice for your particular situation (age, income, assets, risk tolerance, etc)
    Paying a set monthly fee for investment advice is better than paying a % of your assets (IMO)
     
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  13. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    EXACTLY!

    But when you just pay by the hour for specific advice - or just keep the advisor in retention to help you sort things out as you go along, you save a tin of money.

    The $1500 one time fee we paid for a comprehensive retirement plan was well worth it. He also addressed the issue we had about selling our home and relocating out of state. But we will also need some help the next year or two as we transition into retirement and we will appreciate having this person to ask for advice - more on handling our withdrawals to live on then asset allocation advice, amongst other things. A total holistic approach that also reviews insurances and social security, estate planning, etc.
     
  14. Brett

    Brett Guest

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    EXACTLY what .. or do you not know what you are getting from your financial advisor ?
     
  15. Panina

    Panina TUG Review Crew: Elite TUG Member

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    Like anything else you need to make sure your advisor is honest, a hard worker and has the experience you need.

    A good investment advisor is worth everything you pay.

    A bad one and you are wasting your money.

    I had one that a related family used, that I found gave me incorrect information. I use one now that knows ramifications of every move.
     
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  16. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    HUH? I am saying- exactly- bingo- what are you paying a yearly fee for once a plan is totally set up- that's the question. Why pay an advisor a percentage of your assets every year when it is their computer that adjusts your asset allocation going forward? No way do most of them personalize anything after that.

    But when you just pay for specific advice as needed- and the advisor does not hold your assets- you get the most objective advice for the least cost.

    No way do I want to pay someone like $10,000 per year!
     
  17. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    deleted
     
    Last edited: Jun 10, 2019
  18. VacationForever

    VacationForever Tug Review Crew: Rookie TUG Member

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    Our investments are managed by a large wealth management firm and we are happy with the arrangement. Our financial advisor meets with us every quarter to review our portfolio as well as providing insights as to what he (and the firm) project the market to look like in the coming months, the events that have taken place and upcoming events that will influence how the market reacts. We are paying alot of money every month/year but it helps distance our investment decisions from our emotions. We don't react to a bear or bull run like we used to. That itself can save us from making bad decisions and losing more money than our wealth management fees.

    I have no doubt that many TUGgers and folks on Bogleheads manage their investments very well, and do much better financially than our managed investments. Paying for wealth management may not work for most but it works for us.

    We are in the driver seat on deciding how our retirement is funded. Our FA simply helps manage a piece of that pie.
     
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  19. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    One thing we can do is call our advisor if we are not sure what to do at any given time with our investments. He has a record of everything we own; he has made suggestions on how we should invest my husbands 401k and lump sum when he retires, amongst other things like that. All I need to do from there is call T Rowe Price and set it up and I can do some things on line myself as well like I have always done.

    We do not have to know too much about investing or pay someone outrageous fees to do it for us. If I start worrying or get emotional- now I have him to call. Just like I did with the new house situation. Any financial question I can call him.

    This said- when we get older, we might not be able to handle it and then we might need to get someone to handle it all.

    But right now, if I am going to give away thousands of dollars per year, I would rather give our son the money than hand it over to a planner. But actually, we are keeping it for ourselves by keeping that money invested.:D
     
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  20. VacationForever

    VacationForever Tug Review Crew: Rookie TUG Member

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    Oh I know what you mean. I am still supporting my son while he is enroute to getting another Bachelor's degree and hopefully a job in that field. However, our arrangement works for us in wealth preservation so that one day it will all be passed on to my son.
     
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  21. Luanne

    Luanne TUG Review Crew: Veteran TUG Member

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    You see, I don't look at it as "giving" away money. It's a service I am paying for, where I am reaping a benefit. If I weren't I would terminate the arrangement. Good thing there are different things that work for different people.
     
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  22. Sugarcubesea

    Sugarcubesea TUG Member

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    Yes, I would a financial planner just takes a flat fee. I would like him / her to look at my 401K's, IRA's and savings and give me advice on how best to maximize to retire.
     
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  23. Sugarcubesea

    Sugarcubesea TUG Member

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    Thanks for the link, I just found one that is 5 miles from my house and I've sent them an email...
     
  24. Sugarcubesea

    Sugarcubesea TUG Member

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    Dang, never even thought of Vanguard... I use them for my yearly IRA
     
  25. Sugarcubesea

    Sugarcubesea TUG Member

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    Maryanne, thanks so much, there was only one planner within 20 miles of me, the rest were either not taking new clients or were over 2 hours away... I sent a note through the Garett Network so we will see if he gets back to me....
     
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