Do you have a financial advisor

[spirits]

Are you using a financial advisor to manage your investments or have you switched to self managing? After the financial meltdown I started educating myself by watching Bnn and reading financial forums on the internet. However we are not confident that using ETF's will be the cost saver that they are advertised to be and have stayed with our advisor and mutual funds for now.

 

[ricoba]

Are you using a financial advisor to manage your investments or have you switched to self managing? After the financial meltdown I started educating myself by watching Bnn and reading financial forums on the internet. However we are not confident that using ETF's will be the cost saver that they are advertised to be and have stayed with our advisor and mutual funds for now.

No, in another life gone and far away I was an Investors Group rep in Canada for a few years, selling mutual funds and insurance. Needless to say I was not the worlds greatest salesman, but I did learn enough to be able to manage my own piddly accounts.

ETF's are great investments. But if you want more active management, look for a no-load mutual fund. Back when I worked with Investors most funds in Canada were front loaded,(at the time all IG funds were loaded, but I think this has changed) but since then I am quite sure that this is no longer the case and there are probably plenty of no-load funds in Canada now from which to choose.

 

[Tia]

I self manage after having a couple American Express financial advisors, aka sales persons, that I was not so happy with. I used to read Money Magazine and some Forbes, then I used a resource think it's Morningstar at the library to compare funds. Mostly use Vanguard funds now.

 

[pwrshift]

I'm not a big fan of mutual funds, especially in Canada where the MER fees are the highest in the world ... if it is 3%, and you want to grow by 5% a year, you'll need 8% growth just to get the 5%. Outrageous -- funds in the USA have MERs as low as 0.5%. In addition, 'expert' managers of Canadian mutual funds did worse than the average Joe in the market over the recent crash...and even if they go down you still get charged the fee! If you go the mutual fund route, diversify into at least 5 different areas to protect against a double dip.

I think everyone with a meaningful portfolio needs annual meetings with a financial planner on whom you have thoroughly checked references, and not one that will do the investing for you. Depending on your age, you will need an asset mix set up and adapt the plan as you get older and closer to retirement when you can't afford much risk.

ETF's aren't much more than buying index funds but even with them you need to balance your portfolio just as you would with stocks and bonds.

I'm heavy in corporate bonds right now, some like Sun Life paying 7.9%, National Bank of Canada paying 7.2%, ScotiaBank paying 6.6%, etc. These are getting harder to find without premium due to current low interest rates, but the lowest one I've got pays 4.5% with relatively low risk. I've been fully paid out on all my bonds over the years, even the GMAC one I was worried about last year with GM's troubles.

Bond's won't let you capitalize on growth markets ... had you invested in Apple a year ago you'd be up 129%, but had you put your money in RIM a year ago you'd be up only (?) 77%, but that's only part of the story as the 6 month performances are very different. Growth stocks don't usually pay much in dividends so your objective is different in the asset mix.

Dividend stocks should be just as diversified but chosen based on company stability and their history of paying dividends (especially during the recent recession) and those dividends should be reinvested back DRIP into the stocks you own to put the process of wealth building with compound interest.

You can do it yourself and then have nobody to blame but yourself if there's a dip. But your broker wins at both ends ... when you buy and when you sell. Get proper financial advice and a plan based on your current age and you can probably do a lot of it yourself for $10 a trade online. Over the stressful recession, I slept pretty well due to my corporate bonds, but it's less 'fun' than stocks. It takes a $2 million portfolio earning 4% to pay you $80,000 a year before taxes ... if you retire in 20 years you'll probably need a $10 million portfolio just to stand still. It ain't easy.

Brian

 

[Ironwood]

Are you using a financial advisor to manage your investments or have you switched to self managing?* After the financial meltdown I started educating myself by watching Bnn and reading financial forums on the internet.* However we are not confident that using ETF's will be the cost saver that they are advertised to be and have stayed with our advisor and mutual funds for now.

As a retired investment advisor, my advice to anyone excepting those with little interest, would be to learn investing basics and manage your portfolio yourself!* There are many useful on-line sites and BNN that can help you construct a portfolio of equities, ETF's and fixed income securities tailored to your risk profile that will serve you better and be much more cost effective than mutual funds or managed product, on a much more cost effective basis and with your interests solely in mind.* It will take some effort, and is a constant learning exercise, but you will be*better off in the long run taking charge of your own affairs.

 

[cgeidl]

All depends

I would gladly pay an investment advisor 50% of my gains above the total market return in the up years after fees provided the advisor would pay half the losses in the losing years. If these firms are so good they should beat the market and not be afraid to share with the investors. Anyone finding such a firm please let me know.
Otherwise I will continue to pick my own choice of investments using free expert advise available to review reports.
In one study I read only 10% of the mutual funds beat the total market over a 10 year period after considering investment costs.
The person mentioning Vanguard Funds has a firm with relatively less costs to the investor and the long term effects of this over a long period of time make a big difference to the investor.

 

[pgnewarkboy]

Financial advisors or managers? Big difference. If you have someone managing your money , making invesments for you within stated goals, they are managers. If you have someone telling you what you should do - that is an advisor. In either case the party should be working for you and not trying to sell annuities, other insurance, mutual funds. Conflict of interest is the key thing to avoid. There are financial managers out there that have absolutely nothing to sell except their services in investing your money. If you have the time to develop expertise and monitor the various markets every day,and the temperment not to make decisions based on fear, fad, or greed, self-investing could be fine. If not, financial management is something to consider because these people ideally would have time, expertise, and make rationale decisions. Like anything else, it takes a great deal of research to find the right person or group to manage your money.

IMO when you buy a mutual fund you are not buying financial management services. You are buying a fund that is managed by someone. They are not managing YOUR money and investing it. Financial managers can buy many mutual funds in many areas and markets. They make the decision whether to buy a particular fund, for how long, or whether to buy commodities and for how long, or whether to buy financial instruments. They are managing your money.

 

[laurac260]

We use a financial planner. We left our first one, he was more interested in selling "company product" then he was in helping us maximize our portfolio to suit our needs. I would never personally recommend anyone, even our own advisor. I wouldn't want to feel any liability to someone when things don't go quite the way they thought, or when the market tanks, and it always does at some point.

What I would recommend if you ARE looking for a financial advisor is to check out one of Dave Ramsay's books or his website (if you agree with his investment philosophy of course). Somewhere he has a list of financial planners that subscribe to his methodology. When we were shopping for our 2nd financial planner several years ago, we already felt so burnt by the last one (that had been recommended by someone we had known for years, by the way), that we had no idea where to turn. We found someone in our area that was listed on Dave's website, I believe. We have been most happy with her. When the original company she was with was bought out, she contacted us and said "so and so bought us. I am waiting to see what they are about. If I feel they do not have their customers best interests at heart the way that "previous company" did, I will in good conscience have to leave. I will let you know if that happens." About 3-6 months went by, and we received a call from her telling us she had left, and went with a new company. She said when she learned they were going to immediately raise all fees for all customers she knew it was time to go. She did alot of research as to where SHE would end up, and once she made her decision, she called us and others I'm sure. She chose the new company because they were "customer focused", and used a conservative approach she was comfortable with.

One of the selling points for her believe it or not, was that when the current CEO joined the company, instead of spending the company's money to decorate his new office, he brought his own furniture, including a desk he had in his house that was 20 years old. We've been quite happy so far.

 

[Kal]

Over the last number of decades I've had all kinds of financial advisors while simultaneously managing my own separate self-directed portfolios. I finally realized this market is by all means not the same as it was 5, 10 or 15 years ago. There is so much control by hedge funds and other highly capitalized resources that the average guy just gets whip-sawed by actions that occur over micro-seconds. The average guy simply does not have the institutional structure to make timely decisions. We are left with all the great wisdom such as being "highly diversified" and the like.

Four years ago I largely transferred the entire investment package into the hands of a financial advisor. That was the best decision ever especially considering I pay no fees. Unlike the past, I sleep like a baby. Now I am being provided the opportunity to purchase things that I would never previously had a shot at. In some cases a particular investment device might be fully subscribed in a matter of days, long before the average guy even knew it existed, much less had an opportunity to buy.

Granted, I pay a premium for stock transactions but that is chicken feed considering the value of the transaction. Early on I did make a mistake involving the sale of 3-1000 share lots. I did it incrementally without mentioning my plan. After the third sale, my advisor said I should have told him what I wanted to do and we could have just sold 3000 shares at a single fee instead of 3 fees for 3 sales. Lesson learned.....communicate in advance!

Right now I'm within a few days of a principal protected note purchased 13 months ago terminating. Even though the gain is 24%, the principal was protected so there was no downside exposure. So now I'm evaluating incredibly interesting choices for investment of those proceeds. This is actually fun!

 

[John Cummings]

I have a financial manager that manages all my finances except our personal spending. He is a local independent that owns his own financial services company. He personally handles all our financial affairs including investment portfolio, taxes, business, etc. He also has attorney services and other accounting services.

He is a Registered Principal, Enrolled Agent, and Certified Financial Planner. I have known him and his family personally for 25 years.

I started using him when I had my own incorporated business. Though I am pretty knowledgeable in this area, I was just much too busy to do it myself plus I like the idea of not being emotionally attached to financial decisions.

I am now retired and our investment portfolio is pretty large and very diversified to match our needs and preferences. He is fee based and the fees are very low. He has put me in some products that are outstanding that are not available to the general public. There are no commissions as they are subtracted from his fee. We are in constant contact by phone every few days or whenever I want. We meet personally every couple months to review everything.

I like the fact that he is not only a CFP but also an Enrolled Tax agent so he understands the tax consequences of all our options and how best to approach them.

I definitely do NOT recommend financial advisers/managers etc. that have a vested interest in the products they offer. This applies to ones at Banks, Brokerage Houses, etc. They are going to put you in products that benefit them and not the customer. Mine, like other fee based ones, make more money by growing your wealth, not from commissions.

 

[easyrider]

Were learning how to manage our stock investments which are 0 right now. Kind of waiting to see how this year goes and watching for a drop. This graph showing similarites between what happened in 1929 and 2009 have made us leary.http://broadcast.ino.com/education/deja_vu_aff/?campaignid=3

Other issues have made us even more tight.

 

[pgnewarkboy]

Over the last number of decades I've had all kinds of financial advisors while simultaneously managing my own separate self-directed portfolios. I finally realized this market is by all means not the same as it was 5, 10 or 15 years ago. There is so much control by hedge funds and other highly capitalized resources that the average guy just gets whip-sawed by actions that occur over micro-seconds. The average guy simply does not have the institutional structure to make timely decisions. We are left with all the great wisdom such as being "highly diversified" and the like.

The above statement is important. The average joe has been told to "diversify" their 401 K between domestic, small cap, large cap, international. What they diversication should be in terms of amount - not specified. Funds available to use - very limited. People were also told to put their money in stock index funds like the S&P 500 and "don't worry about it". All of this combined into a perfect storm of disaster for most people. Most of this advice was garbage. Most of their choices too limited. Investing has become more complex year to year. Most people with jobs and families don't have the time to analyze. All these great tools that various online brokers are selling as the big "savior" mean nothing unless you know how to use them, the value of the particular tool, as well as the having the time to constantly monitor many markets. There is no single graph or chart or computer program that will tell anyone how the various markets are doing and where they will be heading. There are many many variables that require human intelligence and experience. That is where a good financial advisor or manager comes in.

 

[Nickfromct]

I manage my own money, but I have a MBA in finance and am a CFA, so I know alot. If you want to manage your own money you need to get your level of knowledge up to where you feel comfortable doing it. The key thing you want to be able to do is determine your asset allocation. This will account for about 80-85% of your portfolio return. That means how much in stocks, bonds, etc. Much of that is determined by your age and when you need your money. The longer the time before you need your money, generally equates to the ability to take on more risk. Security selection accounts for about 15% -20% of portfolio returns. This can be done via mutual funds, so you don't need to be a stock or bond picker.

 

[falmouth3]

I've always managed my own money. I could probably use some help with planning at this stage, but I'm leery. A number of years ago I dragged my boyfriend (now husband) to an adult education seminar on managing money. There were 4 instructors (all investment advisers for the same company)and they made some serious errors on basic things. Then I went with my new DH to listen to his adviser in the yearly meeting. I disagreed heartily with what I was hearing. I also asked some pointed questions and the person clearly was less knowledgeable than I.

I also listen to my in-laws comments on what their adviser has them doing and I think the adviser is out to enrich himself but the in-laws think he's great so I don't stick in my two cents.

My SIL took my mother, unbeknownst to the rest of the family, to a lawyer for a will. This guy, with a CPA, set her up in an irrevocable trust which cost her thousands, and her estate is so small, it's truly sinful what he did.

I've been reading Kiplinger's for years and I think it's a great source of information for the general population. I have recommended it to many other people over the years.

Now that I have amassed a good amount of money for retirement, and I'm getting closer to that stage in my life, I could probably use some guidance. But when I've seen all these creeps in action over the years, I just do not trust them.

 

[laurac260]

I've always managed my own money. I could probably use some help with planning at this stage, but I'm leery. A number of years ago I dragged my boyfriend (now husband) to an adult education seminar on managing money. There were 4 instructors (all investment advisers for the same company)and they made some serious errors on basic things. Then I went with my new DH to listen to his adviser in the yearly meeting. I disagreed heartily with what I was hearing. I also asked some pointed questions and the person clearly was less knowledgeable than I.

I also listen to my in-laws comments on what their adviser has them doing and I think the adviser is out to enrich himself but the in-laws think he's great so I don't stick in my two cents.

My SIL took my mother, unbeknownst to the rest of the family, to a lawyer for a will. This guy, with a CPA, set her up in an irrevocable trust which cost her thousands, and her estate is so small, it's truly sinful what he did.

I've been reading Kiplinger's for years and I think it's a great source of information for the general population. I have recommended it to many other people over the years.

Now that I have amassed a good amount of money for retirement, and I'm getting closer to that stage in my life, I could probably use some guidance. But when I've seen all these creeps in action over the years, I just do not trust them.

"Creeps" exist in every type of occupation unfortunately. Finding someone to trust with your money runs a close second to finding someone to trust with your life, like a doctor. If I loan someone a car and they steal it, well I can always get another car. Life savings and your life? Well, that's a different animal all together.

I wouldn't say our first guy was a "creep", but he was surely the self serving type. When we asked him, "can we buy mutual funds?" He steered us away from them every time the subject came up. We finally learned the answer, it wasn't because they were a bad investment, it was because his company did not sell such a product. He pushed us to take out a line of credit on our paid for house years ago. "Why tie up your cash when you can use it to invest?" Why I didn't get this the first time is beyond me. We got the LOC, only to watch the interest quickly rise from 4% to what, 8% before we paid it off?? When we sat in our annual meeting a few years back, always in February since we lived in Florida, and always during the Gasparilla festival (can you say, drunkfest?) he told us our ROI was 13%. He conveniently lumped a well performing 4th quarter previous year with a rocky current year, to pump up the ROI. When I chimed in that we DIDN'T make 13% on the first XXXXX.XX on our money because we were paying 8% back to Poorlyrun Inc in the name of interest on our LOC, he looked at me like I had two heads. (perhaps it was because he was painfully hung over that he couldn't make the connection).

It is very difficult to swallow when you learn that your investment company recorded record profits, when you look at your own portfolio and see that, after fees, commissions, etc, you might have been better off buying cd's. It is also hard to swallow when you learn that there are funds managers taking your hard earned money and investing it in 1000 shares of company Z, (at $.01 per share!) ( Poorlyrun Inc has since been sucked up, by Evenmorepoorlyrun Inc. )

In the meantime, the woman who handles our investments now did everything in her power (stop losses, etc), to help lessen the blow of the last stock market downfall. Did we lose money? Of course we did. But when looking back at how we fared, we did alright. Certainly less than the national average. Since I DON'T have a finance degree and she does, it is worth what she charges. I probably should not share where she works, but I will say that they have their name on a stadium in a Tampa.

 

[Twinkstarr]

I manage my own money, but with the trusts my mother left my sister and I(I'm trustee) I use a financial advisor. It was how the trust were set up that we needed a 3rd party person to advise us.

 

[Nickfromct]

If anyone is interested in a book that contains some good information on portfolio managemnt, I would recommend "Investment Analysis and Portfolio Management" by Reilly and Brown. Chapter two contains alot of good information as to how to set up you own portfolio. Its an expensive book, but there are a few cheap ones on Ebay for like $5 or try your library.

 

[Kal]

...Now that I have amassed a good amount of money for retirement, and I'm getting closer to that stage in my life, I could probably use some guidance. But when I've seen all these creeps in action over the years, I just do not trust them.

Let's say you wanted to make a major purchase. If you're like me, you would listen to the sales pitch of a number of vendors, do serious analysis and homework to verify what you heard, then make the best informed decision possible. Selection of a financial advisor is similar.

However, that process might be considerably easier today. Almost every month I receive an invitation to attend some sort of financial presentation at a restaurant. We not only see this as a learning experience but we only attend if the restaurant is high quality. Our name seems to be on a select list so the most common is a full dinner at Ruth Chris. You go to enough of these and it becomes very easy to separate the smart guys from the those who recently obtained all their experience in the time share industry. They all offer a "free" 30-60 minute face-to-face meeting so we use that opportunity to really see what they're all about.

Granted, such a process might take time, but in the end the decision has significant financial exposure.

I look back, about 3 years ago, one guy's pitch was residential real estate. The whole theme was to buy cheap and use that property as leverage to buy a second property. Repeat the same for the third, fourth and fifth properties. Ahh yes a real estate barron!! I would love to see what shape that guy is in today.

If you like to do your own dental work, in this economic market you would fit perfect as your own financial account manager.

 

[falmouth3]

However, that process might be considerably easier today. Almost every month I receive an invitation to attend some sort of financial presentation at a restaurant.

You raise good points. Now all I need to do it get on those lists so financial people can find me.

Sue

 

[pgnewarkboy]

You raise good points. Now all I need to do it get on those lists so financial people can find me.

Sue

IMO the only things these pitches are good for are the free meals. Anyone giving you a free meal is trying to sell you something. I have been to a few and wouldn't trust the presenters as far as I could throw the building we were eating in.

 

[Elan]

I manage my own portfolio. It's not rocket science, and it's not time consuming. I consider myself fairly knowledgeable regarding investing, and have done all sorts of trades in stocks, ETF's, leveraged ETF's, MF's and options. I just don't see any advantage to paying someone to do it if, and it's a big IF, you're inclined to learn enough to be competent at it.

I am in complete agreement with cgeidl regarding how a financial manager should be compensated.

 

[Kal]

You raise good points. Now all I need to do it get on those lists so financial people can find me.

Sue

I've asked that question and almost every time the answer is "high net worth".

 

[Kal]

IMO the only things these pitches are good for are the free meals...

It also provides a fun opportunity for people watching. Last year a dinner meeting was held at a very exclusive golf and country club where about 3 blocks from Bill Gates' residence. Members of the club included such folks as Bill Gates, the Nordstrom family and many others. Some of the questions posed to the presenters were eye openers!

The food service was incredible very high end Japanese in a gorgeous setting. I still receive their client newsletters even though I declined their services.

 

[Aussiedog]

IMO the only things these pitches are good for are the free meals. Anyone giving you a free meal is trying to sell you something. I have been to a few and wouldn't trust the presenters as far as I could throw the building we were eating in.

Most of these meals are offered by financial advisors trying to sell you an annuity. With first year commissions >10% the price of a few meals is a small price to pay for one sale!

Ann

 

[Aussiedog]

Can you spell Fiduciary?

When shopping for a financial planner or advisor or manager, asking them to put in writing whether they will be serving as your fiduciary is one of the most important questions to ask. This practice standard requires them to put you first and recommend asset allocations, products and strategies that are in your best interest considering your entire financial picture.

Many of the large brokerage houses do not allow their employees to serve at this level. They limit their product test to "suitability" - much lower standard but much less liability for the firm.

Suzie Orman, Dave Ramsey and others all recommend fee-only Certified Financial Planners(r). And if you are a fan of Motley Fool, you have probably noticed that they have just entered into a partnership with a nationwide network of fee-only CFPs for their members - the Garrett Financial Network. You might want to add them to your research list.

Ann