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Question about CFA fees

Old 11-09-2007, 07:41 AM
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Default Question about CFA fees

Is anyone here using the services of a CFA, or are you one?

I am considering hiring an independent Certified Financial Advisor, and would like to know what would be a fair fee, or percentage of portfolio, that is charged.

Is it based on total the value of the portfolio, or soome other formula? Would it typically be the same fee for a 250k, 500k, 1m portfolio?

How do you go about choosing who will manage your money? Bankc and other financial institutions; independent advisors, or what?

Can anyone shed some light on this subject for me?

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Old 11-09-2007, 07:49 AM
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Default Re: Question about CFA fees

I am a CFA, a real one - Chartered Financial Analyst - not the pretend kind you reference.

Sorry - could not resist.
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Old 11-09-2007, 09:23 AM
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Default Re: Question about CFA fees

Chartered, yes, is what I am referring to. So can you offer any information to answer my question?
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Old 11-10-2007, 02:43 PM
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Default Re: Question about CFA fees

Investment advisors I have been reading like The Wall Street Journal Personal Finance Guide (excellent book by the way) , a book by Cramer and one by Ann Quinlin (sp?); suggest the flat fee or by the hour method and not a % of portfolio or trades or anything like that - for a variety of reasons. The few I know, neighbors and such use the % method.

Good Luck!!! I am sure there are lots of members here that are in the business. Or at least in the financial industries (from what I read) Also, do a search - seems like I posted this question about a year ago and got a very wide variety of responses. I would probably trust anyone form THT that has made more than 20% so far this year in the THT Investment Guru game....
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Old 11-10-2007, 08:12 PM
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Default RE: Question about CFA fees

CaptWill,

I think you are talking about a CFP which is a certified financial planner. A CFA is a Chartered Financial Analyst which deals with an entirely different part of the financial services business. For a CFP, you are either going to pay by the hour in a small firm or a percentage with most wealth management services. 1% seems to be the industry standard. For people who do not have the time, education, patience, etc placing your money with a good wealth manager or private banker is a great way to go. Good Luck.
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Old 11-10-2007, 08:33 PM
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Default Re: Question about CFA fees

Here's the link that will assist you finding a CFP in your area.

http://www.cfp.net/search/

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Old 11-11-2007, 05:39 AM
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Default Re: Question about CFA fees

Thanks for the responses so far, and please keep them coming. This particular individual that I am talking about, is a Chartered Financial Analyst. I got a clarification on that yesterday, while talking with him. His job would be to manage my portfolio by picking, buying and selling stocks and other securities, in a way that hopefully would maximize my ROI. His annual fee is a flat 1% of portfolio total value, irregardless of performance. I just wanted to know if this is pretty normal in this industry. Maybe I need to be talking with a CFP as well?
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Old 11-11-2007, 06:23 AM
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Default Re: Question about CFA fees

CaptWill - 11/11/2007 5:39 AM

Thanks for the responses so far, and please keep them coming. This particular individual that I am talking about, is a Chartered Financial Analyst. I got a clarification on that yesterday, while talking with him. His job would be to manage my portfolio by picking, buying and selling stocks and other securities, in a way that hopefully would maximize my ROI. His annual fee is a flat 1% of portfolio total value, irregardless of performance. I just wanted to know if this is pretty normal in this industry. Maybe I need to be talking with a CFP as well?
People can have a CFA or a CFP and be a good or bad advisor......it's the individual's investment skill set that you are paying for. Neither certification guarantees success. Look at the person's track record to figure out if he/she is the one you want managing your investments. Caveat.....good luck getting a true picture of the person's track record......numbers can be easily manipulated to make a person look better than they truly are. References would probably be a better source of info. Caveat.....good luck getting an objective list of references. Reference lists can be manipulated to include only the advisors happy clients. In closing ..... picking a financial advisor is no easier than picking stocks ..... some are stars and some are dogs.......only time will tell if you made the correct choice. I hope that helps.....I sincerely doubt it did.
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Old 11-11-2007, 06:29 AM
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Default Re: Question about CFA fees

I personally, would never hire anyone to handle my money. I just wait until the opportunity presents itself to do so based on my experience and homework. Good luck.
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Old 11-11-2007, 08:53 AM
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Default Re: Question about CFA fees

CaptWill, If you haven't done so already, I would first educate myself by going to the web sites of the major mutual fund companies (Fidelity, Vanguard, T. Rowe Price are a good start) and reading to get an idea of what they recommend as to portfolio structure based on your general age (stock vs. bonds, types of stocks such as large vs. small, growth vs. value, domestic vs. foreign, etc.), current living and retirement objectives, etc. Next, I would try to get multiple recommendations on money managers from people you know or have some connection to and discuss with them what they think about various individuals (although there is a bias and planners normally won't give you names of people who won't provide a favorable recommendation, many people will give you useful information). With this information, you could have a consultation with a couple of selected individuals (planners/analysts) to see if you are comfortable with them and to obtain an idea of what they would do for you. I would want recommendations of some advisers who are local and some in larger and more competitive markets (DC, Wilmington, Philadelphia and Baltimore).

It is not really clear whether you have a portfolio and a pretty good plan for your financial future so that you just need a stock/mutual fund picker, or whether you just have some money in various investments and a feeling that you need a financial plan for your future. The former may require a CFA whereas the latter may require a CFP, although the right individual in one discipline may serve in both.

Some financial planners are fee only (charging a flat fee for their advice) and others charge a % of your portfolio. The general recommendations I see in the financial press indicate it normally is preferable to go with a flat fee advisor as they are not trying to sell you anything and thus are more likely to provide independent advice. The fee will depend to some extent on the complexity of your needs, which may be revealed as you discuss your situation with recommended people.
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Old 11-11-2007, 04:46 PM
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Default Re: Question about CFA fees

I am sure there are good CFA's out there,but ask anyone of them if they will work on a 1% or even 3% of just the rate of return profit.Bet there are not to many of them out there!
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