# Using a financial advisor or planner?



## Victor (Nov 19, 2016)

Has anyone here in U.S. used a financial adviser recently--for your personal finances? Not for investments.or buying anything.
they are often expensive like accountants. 
 Are they worth it?You think an accountant
or H.R  Block guy could do it?


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## Lon (Nov 19, 2016)

I have certainly worked in that capacity with out charge. My credentials are Chfc, CLU


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## anodyne (Nov 19, 2016)

Worth it if you've invested or wish to invest your money with the goal of making it grow. Your bank will assign someone to assist with that, usually no fee, but your bank's own best interest will take priority. 

Also well worth it if your income well exceeds what you spend, or plan to spend, and you're wondering what to do with the excess.

Waste of money if, like me, your income is quite manageable without assistance, and, additionally, you hit your 60s before you even thought of a financial advisor.


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## Aunt Bea (Nov 19, 2016)

Not sure what you are looking for.

If you are looking for someone to help with preserving your money and protecting some assets from the nursing home circuit then I would look for an attorney in your area that specializes in setting up trusts, transferring assets, etc...  I have looked at some of that and found that there is no free lunch when it comes to this subject and in my situation it would create as many problems as it solves.

For investment advice I have always done it on my own by investing in balanced mutual funds and index funds.  

No matter what you are looking to do I would not trust my financial future to an "H&R Block guy".


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## Myquest55 (Nov 23, 2016)

Because we have life insurance through both Prudential and Thrivent we have used their reps to advise us along the way.  The first plan we had done in 2005 and cost us $500 but since then we haven't had to pay anything.  I do keep our finances on a spreadsheet - easier for my husband to comprehend - and easy for the financial guys to use to advise us.  I show totals beginning in January, again in June and the final Year To Date, separating ready cash and designated retirement funds and grand totals.

When we started out, I was careful not to tell the Prudential guy about what we had with Thrivent and vice-versa.  Over the years, I realized that wasn't necessarily the best way to plan ahead so have finally shared the big picture with both.  They understand that we don't want to put all our eggs in one basket and have gone so far as to complement the choices.  I have also made some investments on my own and have done fairly well.  We have had some ups and downs but the balance continues to grow.  

Two years ago my husband was diagnosed with Parkinsons at age 58.  We took the spreadsheet to the Thrivent reps and asked them - "If we HAD to retire in 2 years or 5 years - can we?"  I wanted it simple - which accounts to do tap first, second, third, etc.  They came back with a plan that said, it would be tight, but we could do it.  Since then we have met with them every year to revise and adjust- again - no charge.  So far we're on track and we can, hopefully retire in the next year or so - pending disability, which would make it SO much easier.


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## OneEyedDiva (Nov 30, 2016)

Never have and probably never will. I'm a self taught investor who "inhales" financial articles. I am very happy with how my investments are doing, at least the ones I picked myself.And when I did follow the advice of financial "experts" twice, once on a hot mutual fund they were touting and more recently on a hot stock everyone was touting...I lost money. The stock lost about 67% or more. I'm glad I didn't buy too many shares. I sold all shares of the mutual fund at various intervals and invested in an ETF that is doing very well. I'm holding on to most shares of the stock for now in hopes it will recover. I sold a few shares to offset the capital gain from another sale.


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## mathjak107 (Dec 1, 2016)

except for my fun speculating i have never bought individual stocks for my serious investing , only funds .  last thing i want to be is dependent on a company's whims and luck . it is hard enough investing with just market risk . adding individual company risk is something that never interested me ,

since 1987 the funds i used for my growth model averaged 10.80%  . my retirement model is  more conservative and up almost 6% ytd with half the volatility of the s&p500


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## bluebreezes (Dec 1, 2016)

I don't use a financial advisor and instead have taken time to educate myself via my investment company articles and sites like Mr. Money Mustache and The Motley Fool over the years. Like mathjak, I only invest in funds and have had returns I'm satisfied with.


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## Lethe200 (Dec 4, 2016)

I used to work for an independent CFP so I can say that yes, they do add value - IF you have sufficient assets. Most will not take clients with less than $500K liquid assets. Liquid means investible and non-401k, not net worth. 

They are middlemen and make their money from fees: either asset worth or transactional. It is preferable to use one who bases his/her fees on asset worth, and the more you have in liquid assets the lower the fee percentage charged.

Could an accountant or HR Block guy do it? NO. You use a CFP for comprehensive, holistic _*Financial Planning. *_That is a legal term under SEC rules (it used to be called Estate Planning, and I still think that's a better phrase). There are only 3 certifications allowed to do this: CFP, Chartered Financial Consultant, and CPA with Personal Financial Specialist (PFS) designation (e.g., not just any CPA--the PFS designation is legally required).

There are almost 6000 - yes, six thousand-plus - useless financial certifications invented by companies to "snow" consumers. They mean absolutely nothing. Zip. Nada. Useless. No legal standing at all. They can help you with "asset planning", "investment planning and allocation", "future retirement analyses", and all kinds of other carefully phrased terms to get around that FP phrase.

There are two ways to use a CFP and one of them is much cheaper. You can consult on an "as needed" basis with an independent CFP who will charge you per hour and work with you on any aspect of your financial, retirement, or estate planning you wish. The downside? What you get out of them depends on how much work you put into it. They won't call you, you call them. If you're like 999 people out of a thousand, you'll experience lifestyle changes that impact your financial plnng but you won't call your advisor to pay for a few hours of work because "well, that's more money spent and I'm just too busy right now. I'll do it next month." 

Next month turns into two months, then three, and before you know it, three years and many changes have gone by and you still haven't met with your CFP to let them know what's happening with you.

Or, you can use a CFP on an "on-going" basis, incurring regular quarterly fees for investing your account. You will also put in some effort and time to learn to work with your advisor, but in this case your advisor has a pro-active role in your life. They should check in regularly without being prompted to do so. You can feel free to call them at any time to discuss the markets, or a change in your lifestyle, or the state of your health. You want to learn about the markets? Great, schedule an appt and sit down for a couple hours to get some basics! 

Want more? Cool, let's do this once a month or maybe every couple of weeks. A good financial planning advisor always has time to talk to you, because the better they know you, the better help they can be to you. I've never met one that didn't love to teach people about finances and markets.

And it goes without saying, always always always always make sure your investment accounts are *non-discretionary. *Never, under any circumstances, allow any advisor to set up a "discretionary" account with your assets!!

I can honestly say that one of the best uses for an on-going CFP relationship is where one person handles ALL the couple's finances. We had a fair # of widows as CFP clients and only a couple of them had the financial smarts and discipline to pick up the estate reins and learn about handling all the financial/legal/tax/family matters - where _they _told _us _what they wanted to accomplish. Then we developed the financial strategy and worked with the client's tax and legal advisors so all the paperwork was complete and up-to-date. More importantly, we acted as the neutral checkpoint so that everything was kept current. 

But in a number of cases the surviving spouse (usually the wife but not always!) had no interest in managing money. So it was the CFP firm's fiduciary responsibility to ensure s/he worked with us so we knew what was wanted. Leaving money to the kids? Educating the grandkids? Special needs trusts? A comfortable old age and the heck with leaving any $$$ behind? Sometimes we even had to get down into the nitty-gritty and help set up a monthly budget because the client was liquidating assets too fast for non-essentials. 

Fiduciary responsibility means we must always act in the client's best interest, not ours. So if we see a client spending more than they should, we have a legal responsibility to point it out. We can't stop them, but as a firm we can terminate them as clients if they keep acting contrary to our advice. 

I mean, you're paying someone a lot of money for advice. If you're not going to take that advice, then best to save your $$$ and either DIY or find a cheaper/non-fiduciary advisor who will tell you what you want to hear.

Now, if you enjoy doing investment research, that's great. Handling your own money and doing well? More power to you! But don't kid yourself, it bores most people silly. I love reading financial news, but although my DH is no dummy, he has no interest in reading the WSJournal or the Financial Times or any other investing/planning article. We use a CFP firm, not for me but for him. 

Sure, the chances are reasonably good he'll predecease me. But if I predecease him - or if we both kick off and the estate goes to our heir who is completely ignorant about handling a good-sized estate - then an ethical, independent, reliable financial advisor with fiduciary responsibility is well worth the fees they get. 

Financial planning is so much more than what stocks to invest in. I know that neither my DH nor our heir understands NAV, LIFO vs FIFO, or global bond funds. They couldn't tell you what S&P means, let alone the companies that make up the list and the changes that occur every year. They're not up-to-date on tax planning or risk mitigation strategies. They wouldn't know a 10Q from a 401k. How many laypeople know that you must continue distributions from, and try to should avoid liquidating, an inherited IRA?

Answer to all those: very, very few folks. But they are important - nay, *critical *- to spouses and heirs.

I do think most middle-class folks need good professional advice. But most CFP firms are not set up to serve them. When it costs as much time and effort to handle a $400K account as it does to manage a $4M account, then it's obvious where the marketing is going to aim at. The little guy with $40K won't get any attention at all, unfortunately.

In short: if you are in a suitable net worth and personal situation, a professional Financial Planning advisor can be well worth it. If you are not, then all the responsibility for estate planning and education of your spouse/heirs, falls on you. Make sure you cover all your bases and *keep all legal docs up-to-date.*

HTH.


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## Myquest55 (Dec 4, 2016)

First, thank you Lethe200, that was comprehensive and informative but leaves me with some questions.  

Is there a difference between a Certified Financial Advisor and the Insurance/Finance Reps that I talked about?  

For an average person this can all be really confusing.  Am I correct in assuming that a CFA will managed ALL of your finances - including savings and checking accounts?  A broker just manages the stocks and mutual funds, leaving the rest to you?  But they all seem to give advice - IF you ask them - too.  I have always managed our day-to-day living expenses but I have taken investment accounts to Prudential or Thrivent and asked them to "make us some money!"  It is their expertise, after all, not mine.  They have never commented on our expenses (but we only have our mortgage as debt) and barring the one 2005 Financial Plan in a binder, we have never paid for advice.  Are we okay?  I do monitor the statements but don't always understand the details.

Lethe200 was right about minimum deposit amounts.   I recently thanked our new Prudential Rep for taking the time to review our investments and make suggestions.  He mentioned that his previous employer's corporate minimum was $50,000 to open an account but the local office boss only wanted $100,000 or more.  He had to turn potential clients away.  Most of our deposits with Prud. are already tied up in closed accounts but one is still liquid and well under $100K.  I told him that is wasn't much by his standards but it was everything to us.  He understood and said he didn't have a minimum and a new client has to start somewhere!  There should be more out there like him!  Maybe it is harder to find the right help since we are looking towards the end of our investing lives and not at the beginning.


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## fureverywhere (Dec 4, 2016)

Financial planner? Um yeah...how much cat food must I steal to keep a small family alive?


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## Lethe200 (Dec 5, 2016)

Myquest55: I'll apologize in advance if I sound over-emphatic. It is a very complex subject, indeed. I get a little frustrated sometimes on financial forums, LOL.

First of all - I'll say that although I disagree with the DIY-investors that "anybody can learn about this stuff and do it themselves", I agree with them on one very important point.

This is YOUR money. You DO need to learn something about investing and market swings. Maybe not "every little detail", but you should know the difference between bonds/bond funds and stocks/mutual funds. You should know that markets go up and down, and that your portfolio will ALWAYS have some risk to it. 

How much risk? That's up to you: risk vs return. High risk = high returns or big losses. Low risk = low returns, sometimes so low you fall below inflation and lose money just by holding cash. Accept a moderate amount of risk, and over time, if well invested, you'll receive a moderate/satisfactory return. 

Remember, the shorter your 'growth time', the less return you'll receive because you lose the advantage of compounded growth. No fast-talking investment planner in the world can overcome that. You are not going to double your money guaranteed in five years. You can, but you might just as easily lose it all. If you can't afford to play the high-risk game, stay away!

Learn what a portfolio allocation means when it's low risk, moderate risk, or high risk. Don't focus on exact numbers! Portfolio allocation means *your comfort level with risk.* There are no guarantees, but a balanced/moderate portfolio has been shown to do very well over a 10-20 yr period. Over a 30 yr period, a moderate risk portfolio actually comes within 1-2 percentage points to a high-risk portfolio's return, with much less volatility (ups and downs in your net worth).

Remember, this is YOUR MONEY. You want to grow it to take care of you in your old age! It is worth spending some time to read a little. Then you can ask more questions of your advisor, if something stumps you. A good advisor should be happy to teach you to be a smart investor.

NEVER be afraid of sounding stupid or foolish for not understanding "the jargon." ALWAYS ask for an explanation; even if it takes five times of explaining the same thing in different ways before you "get it." 

NEVER let any advisor rush you into a decision on a "hot tip." There'll be another tip tomorrow and ten more next week.

>>Is there a difference between a Certified Financial Advisor and the Insurance/Finance Reps that I talked about? >>

*YES.* A CFP, ChFC, or CPA w/PFS are FIDUCIARIES. That is a legal standard, same as an attorney or a doctor. They are required to put YOUR best interests first.

EVERYONE else is a *NON-FIDUCIARY.* Their titles have no legal meaning and they are NOT required to put your interests first. 

They are only required to perform the "suitability" standard. It is so legally loose as to be essentially meaningless. Specifically, it is "... helps clients decide what products would be *suitable* for them".

So what is "suitable"?

'Suitable' means I'm suitable, because I'm not a fiduciary and gee, you'd be perfectly safe leaving your money with me, honest! I swear on my momma's grave!

You call me up: "Lethe, I need to earn a little more on my money. But I'm sorta afraid of the market."

Lethe: "Okay, I can see that. Well, there's this fund XYZ we have that's done great for my other clients like you. The expense ratio's a little above average but their returns have been dynamite, even when the market shifts downwards. Or there's the GetRich ABC fund, it's a little more volatile but has just been tearing up the market, double-digit returns for the last four years. Which one sounds better to you?"

You: "Uh....I guess I'm not sure. What would you recommend?"

Lethe: "Well, the GetRich is a great fund, just super-hot and really good. But maybe you don't want to have too much risk. I'd recommend our XYZ, lower risk and I think you'll probably be really pleased by its performance in another 3-5 years."

You: "Okay, that sounds good, just what I'm looking for. Let's go with XYZ."

*Here's what I didn't have to say to you, because I'm not a fiduciary:*
(1) XYZ is an in-house fund. The firm is giving me an extra three points of commission $$$ for pushing you to it. 
(2) I did NOT say XYZ is a low risk investment. I said it was lower risk than GetRich, which is a very high-risk investment (and probably unsuitable for you unless you're 25 yrs old and a disciplined saver). Under the 'suitability' standard, it is YOUR responsibility, not mine, to figure out the verbal distinction I made.
(3) Sure, my clients are happy with XYZ and ABC funds because their portfolios almost doubled in five years! Guess what? That's the 2009-2014 period - one of the market's lowest starting points to one of the highest. A blind monkey should be able to make money in those 5 yrs.
(4) Finally, I win no matter which fund you pick. GetRich is also pushing their XYZ fund this month, so they're offering brokers an extra two points of commission $$$ on every sale/transfer. What I didn't bother to tell you about was the five other funds with lower expenses that have done almost as well with very little risk at all - because under 'suitability', I don't have to tell you that. _Caveat emptor_, after all!

+++++++

It is, btw, perfectly possible to have a very good financial advisor/broker, and a lousy CFP. Just as it is possible to get a bad attorney, or CPA, or doctor. 

No matter what the certifications, learn to ask the right questions. DO NOT pick an advisor, fiduciary or not, because "they're nice." They're all salesmen - being nice is part of the job!

The NAPFA and CNN Money websites have very good one-page lists of questions you need to ask when meeting an advisor for the first time. Does it take time to find a good advisor? Yes, it does. 
NPFA: http://www.napfa.org/consumer/Resources.asp
CNN/Money: http://money.cnn.com/retirement/guide/gettinghelp_basics.moneymag/index3.htm

But again - this is your money, your entire future livelihood! Would you buy a house without an inspection? Sight unseen? No questions asked? Of course not!

So take your financial future seriously. Learn - that's one of the best things the Net is good for! Take your time...and honestly - stop wasting time asking for financial advice on the Net. Everybody's situation is unique, and you want an advisor to work with closely so that s/he can help you achieve *your* individual goals and meet *your* specific needs.


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## Don M. (Dec 5, 2016)

If a person is going to "invest", they MUST educate themselves on the workings of the markets, and follow the financial news closely.  To just trust an "advisor" can be quite risky, as so many of them generate their salaries off their fees, and the "churn" (excessive trades) they make with a clients funds.  There are some good books on investing that a person should read, and time watching CNBC or Fox Business Network is far more valuable than wasting electricity on a goofy reality show.  No one has a greater vested interest in a persons finances than that individual.


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## mathjak107 (Dec 6, 2016)

there can be issues no matter what the creditionals are of a planner .

most financial planners are decent in the accumulation stage stuff . but they lack the current research and knowledge in the 2nd half of the game which is the decumulation stage .

they basically were helping boomers save and invest all these years . now the game is changing and most are old school and still run on myth and old beliefs .

it isn't easy finding a well schooled planner for the 2nd half of the game .

my own experience has been many fee only are the worst at it . they can lack the training and credentials in many great low cost products that can give someone a nice comprehensive package of their own investing coupled with various low cost products that can guarantee a base income improving success rates .

you really need to do enough homework on your own reading the study's by kitces , pfau and the likes of blanchett   first so you get an idea of what current research is showing .


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## Myquest55 (Dec 6, 2016)

Good discussion and very educational! Lethe200 - thank you for laying it all out there in terms even I can follow. I have some business background but finance was not my expertise.  I have questioned things along the way and so far, everyone has played nice and all the "reps" have understood it to be my, or our, call in the end.  I don't mind the Rep taking some commission - it IS his job, after all but don't want to be over-paying and, like real estate, there is ALWAYS another deal.  

Mathjak107 - you are right about the 2nd half of this - the dispersal.  I feel the one set of Reps have worked that out for us and we meet once or twice a year to go over the plan.  DH will most likely leave work in 2018 - well before Full Retirement Age so we hoping SS Disability will tide us over until that FRA.  After years of living off a paycheck written by an employer, it will be hard to pay ourselves.  It has helped to have someone else make up the plan - maybe I won't feel so responsible.

We started out with just a little but have tried to steadily add to it over the years and am hoping that paid off for us.  Even if we are at the end of our investing lifetime - this is good information we can pass on to our children & grandchildren and hope they can do even better!


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## Victor (Dec 7, 2016)

As I said in my first post,* I am NOT looking for someone to manage and* ad*vise me on investments and places to put my money*. I have done this myself over the years
and will continue this way. I don't trust anyone to do this for me, even my mother at times. As the saying goes--financial planners or consultants make money from you, not for you. I am the suspicious type.

No, my goal is much simpler. I want someone to review my math and show me how I will have enough money to last me for the rest of my life, assuming I
do not work, assuming I keep my frugal lifestyle, and given a much higher raise in apartment rent and utilities. That is key. I have figured this out many times
with slightly different totals. The answer will make a big difference for my future decisions.


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## mathjak107 (Dec 7, 2016)

why not just use firecalc or the fidelity planner . they both are very similar to anything advisers will run


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## 401Paul (Jan 12, 2017)

I feel it can only help to speak with an adviser who DOES have a fiduciary responsibility for YOUR money. In other words, know how the person you are speaking with gets paid. If they profit whether or not you gain or lose, that would be a conflict of interest, in my opinion. On the other hand, interviewing a few folks who's goals are aligned with yours (you lose = they lose, you gain = they gain) could reveal strategies or concepts that make sense which you may not think of on your own. Point being, know how your pro gets compensated and make certain it aligns with your goals!


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## tnthomas (Jan 12, 2017)

Victor said:


> As I said in my first post,* I am NOT looking for someone to manage and* ad*vise me on investments and places to put my money*. I have done this myself over the years
> and will continue this way. I don't trust anyone to do this for me, even my mother at times. As the saying goes--financial planners or consultants make money from you, not for you. I am the suspicious type.
> 
> No, my goal is much simpler. I want someone to review my math and show me how I will have enough money to last me for the rest of my life, assuming I
> ...


, 

That is basically my position.   I hesitate to even search for a financial planner or adviser, as it is my understanding that there is no regulatory body, or standards control to  insure that not just any charlatan can hang their shingle out, professing to have such expertise.


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## Aunt Bea (Jan 12, 2017)

tnthomas said:


> ,
> 
> That is basically my position.   I hesitate to even search for a financial planner or adviser, as it is my understanding that there is no regulatory body, or standards control to  insure that not just any charlatan can hang their shingle out, professing to have such expertise.



Even if you check it pays to be skeptical, listen to the "pitch" and do your own homework.

These links might help.

https://www.sec.gov/investor/brokers.htm

http://www.cfp.net/utility/verify-an-individual-s-cfp-certification-and-background

[url]http://www.plannersearch.org/



[/URL]


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## 401Paul (Jan 13, 2017)

These are all great points. I've met many people who have done a great job managing their finances. I've also met many people hesitant to use an adviser. When it comes to Social Security (which I believe was the initial topic) timing can be the difference for a large capital sum over the course of years. From that perspective, I don't think it could hurt to inquire a bit deeper into financial options using some SSI timing software capable of running several different scenarios, based on when you accept your payments!


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## Floridatennisplayer (Jan 15, 2017)

My money is professionally managed by Fidelity's Private Client Group.  I'm happy so far. Been 6 months. Conference call with them scheduled every 3 months. Tell me exactly what and why they are doing what they do.


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## Retirement Strategist (Feb 16, 2017)

Retirement is a journey, it is not a destination.  Seek out professional a retirement specialist who only work in this arena.  An independent retirement specialist who possesses a fiduciary license is bound by law to do what is in the best interest of the client.  A good one is agnostic and will seek out the proper tools tailored to your unique situation. There are no cookie cutter answers and planning properly takes someone dedicated to their craft with up to date education as the rules change constantly.The majority of the public never hear of these rule changes and the lack of knowledge can wreck your retirement future.  Seek out the best.  Your retirement deserves and depends on it.


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