Financial Planner

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1

Mamas & Papas-

Anyone have any experience in using a financial planner? We've got a broker and a tax accountant. Thinking of taking the next step and speaking with a financial planner/ advisor to take a look at our current assets, holdings, investments, liabilities and debts, and assist with short term and long term financial goals, as well as advise re: insurance.

What should I look for in terms of their qualifications? what should I ask about to determine their success rate? client retention? fees? billing structure? firm organization? ratings? what should I go in equipped with? any other thoughts?

Thanks a bunch,
fanged bunny

2

We've used one for years.
I like someone that is not tied to a particular company (like Northwestern), since they'll always leads with investments from their employer. I like an unbiased look into the market and offerings.

I would look for someone that doesn't try to sell you too hard on moving your money around. And depending on how aggressive you want to be with your investments, that person's tendencies should match your own. In other words, is your investment approach aggressive, or more conservative. And if it's either, do you want someone that matches that, or might advise you otherwise (slow down, speed up, etc...)

We meet with our guy 2x/year. We're both pretty conservative in our approach. He's given us good advice in how to maximize our portfolios, and helped us get on track so that college is paid for for the kids by the time they get there. He'll come with suggestions for new market offerings, but doesn't push us hard if we're not excited about the move.

So it's more of a question of how you like to manage your money now, and what you're looking for in someone to help you with it.

3

ooo, thanks for the reminder! we did talk to one a year ago. we need to go back to him with the estimates from SS so he can give us better numbers, but the thrice-cursed SS site won't let me in, and you know how helpful it is to call government agencies to walk you through.......
but i need to X out a full day so i can get it done.
i chose ours not only because he gave us good advice decades ago when we were young and dumb (we didn't follow it) but because of his qualifications. anyone can say they're a financial adviser, so check for accreditation by the CFP.
khairete
suz

4

I have used one for years - long before I needed someone to do my taxes :) People have a misconception that planners are only for the wealthy, but IMO, they can help anyone.

I like to go with an established company, not an individual, because I know that there is an establishment there and checks and balances, and no one can run off with my funds. Over the years, I've switched around a bit, but this is mostly due to the personality of the person I was working with. Even though I don't have a lot of $, I think I deserve good customer service, and when I didn't get that, I switched.

If you do go with a big company, the fees are pretty similar among them (my experience is with Merril Lynch, AmEx, and Hefren Tillotsen, of those, I thought AmEx was the least useful, the other two were better).

The best thing to do is really to call the office of a company that has a good reputation and is convenient for you. Describe what you are looking for - you need a comprehensive plan and how you would characterize your assets/lifestyle (eg, younger and middle class and looking to grow your assets OR upper class and your concerns include tax planning and protecting your assets OR whatever). They may have some questions, and then they can usually recommend a specific planner in their office that sees the kind of client that you are.

First visits should always be free so that you can evaluate them, see if it is someone you think you can work with, and who seems competent when you talk to him/her. If you stay with them beyond the initial visit, they will charge a fee based on the assets in your account.

ETA: yes, some others bring up a good point. Ask how long the planner has been with the current company. I too got a 'jumper' at one point - it seems to be common in the industry. I moved funds with him twice, and when he told us he was going to a 3rd company in 5 years and asked us to move with him, we moved - but not with him. We went with our current person, who has been with the same firm for many years. And have been much happier.

5

Sore subject for me. My financial planner jumped companies a few times and each time he went somewhere different he'd change the things he'd sell. Of course he wouldn't continue to have administration rights to the old products so they'd become 'orphan accounts' meaning that someone else in the old company would have to be contacted to make changes or close them out.

If I got a do over I'd go with a financial planner that worked on a hourly rate who could review everything I have and give recommendations on what I needed to do next. Then it would be up to me to implement the plan which would let me choose which companies to use.

6

My husband and I are both insurance agents and we have a CPA that does all our taxes for our businesses.

We used Edward Jones for our financial planning because they work VERY hard to start their offices from scratch so we felt like once they were established, it was unlikely they would leave.

I would ask around to see who your local family and friends use. And although agents do tend to jump around from company to company, once you have your long term goals figured out, ideally you should just leave them where they are and someone else will take them over. If you cancel and move your money every time your agent goes somewhere else, you likely lose the benefits of leaving it long term. JMO. Good luck.

7

We do have a relationship with a planner as well as tax and legal counsel. This is for personal use as well as our company.

My hubby is a huge numbers guy and very good at forecasting, reading markets, etc. HOWEVER, it is not to HIS best interest to manage everything himself because he gets so emotionally involved. The market has crashed twice in so many years and the first time, we lost 1/2, and it is hard to continue to keep putting funds in to build plus make up for the losses and not see returns you expect. It is also important to not have expectations so high that your goals are almost unachievable.

Always remember if something sounds too good to be true it probably is not true. If someone is pushing a particular stock, mutual fund, annunity, etc to you.... ask why they are so into that particular item. Commissions? Fees?

Our planner follows what hubby wants to do and suggests, for the most part. She also will stand up to him if she feels that whatever he is suggesting might not be a good decision and may steer him in a different direction. She is a good balance for him financially and it keeps his emotions out of it.

I would ask a lot of questions regarding commissions and fees. Those 2 items can eat up a lot of your earnings if you are not careful and go in with eyes wide open.

A lot of it has to do with age as well. We work very closely with our planner because we are currently using the 529 and funds we saved for upteen years for daughter's college. We are also nearing the age of retirement where we do not need to have any major risk areas and we are moving to more fixed but healthy investments with good returns. Hubby will turn 60 this year and although has no plans to retire.. we still plan because who knows, he could have a heart attack tomorrow or be in a bad accident and need to start using funds.

The planner is someone you trust, have a good relationship with and will do his/her best to grow your portfolio. Ours is well established. I don't know if someone you are interviewing will just tell you about his books but it helps to know what type of books they manage. I believe our planner manages a 50 million book (that is total investments for all of her clients). You don' want a book that is too big and you don't want a new one either. You have to find a balance where the planner is still able to maintain a relationship and you do not become a number.

best wishes!

8

Our portfolio is managed by Raymond James. I like our guy. Make sure whomever it is they are a certified financial planner - CFP. This means they've gone through the requisite education. Most firms won't hire unless the candidate is certified but some will hire if the applicant is in the process. My only complaint is I wish he was a little more proactive in contacting us when he sees something that could benefit us. My DH is great at recognizing diamonds in the rough and so he will often reach out first. Best of luck and, as with all things, make sure you listen to your gut. :-) Sharon

9

We are doing it ourselves. I read a lot of books on planning and investment, and I decided that our long terms financial health required that we didn't give away 1-2 percent of our net worth every year. Check this out: http://www.fool.com/how-to-invest/personal-finance/2014/05/29/the-invisible-and-brutal-cost-of-using-a-financial.aspx

When I was doing my research, some 12 years ago at this point, I happened upon a book called A Random Walk Down Wall street. There is an interesting argument about whether or not blind folded monkeys do better at picking stocks ( http://priceonomics.com/how-well-do-blindfolded-monkeys-play-the-stock/)

What I know is this, you lose in investing to fees, so it's best to have as few fees as possible. Vanguard offers a cheap yearly service for planning consulting. You might want to check that out. Giving them 300 a year, as opposed to a planner 1-2% is a big difference.

In terms of planning, there are lots of great books that are easy reads that help you construct your own short-and long-term plans. I do mine every year, and I feel very comfortable with the choices we've made. I'd be happy to share our insurance choices with you, we have all sorts of policies, from accidental to an umbrella. We've also been talking lately of getting another policy for me now that we have another kid. 500k just doesn't seem like enough to be a real support to hubby if I go missing.

In investment, I'm a big John Bogle fan and I found The Four Pillars on Investing by Bernstein essential when I started out years ago.

Sorry I answered in the counter (I hate that!), but I do think it's worth exploring if you actual NEED a planner. Money isn't a place to make assumptions. ;-)