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Financial Advisor -If I have to ask -

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Financial Advisor -If I have to ask -

Old 04-17-2012, 07:19 PM
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Default Financial Advisor -If I have to ask -

I suspect I need one.

Any suggestions as to how I should choose someone? I don't have a ton of cash to spare, and I don't consider myself an active investor (pretty conservative). I just need someone to get me back on track.

Some details that might help you folks point me in the right direction

My third 401K just got rolled in to market index fund (changed 401 providers) so I think its a good time to rethink my strategy. There is no real logic to my holdings (nor my wife's) Decent salary, rental property with equity (plan is to keep it for college tuition for 3 kids -will need the money in 10-14 years). Wife just went back to work and is bringing in money as an LLC -we want to use that to augment college and start socking away again for retirement (she has missed 6 years of 401 K contributions).

How to I go about finding someone who can take a holistic look at my situation, and give me some good advice? I am not interested in taking on another mouth to feed, and have no interest in paying someone to make trades for me. I am not looking for a stock broker (I don't think) but kind of a life finance coach. We could also use some advice on how to manage the income from the LLC. I want someone to give me some pointers and direction, but I want to manage that myself.

Does this make sense? Any suggestions as to how to vet someone, and what kind of fee structure makes the most sense for me?


Thanks in advance for the help here
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Old 04-17-2012, 07:39 PM
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You are looking for a fee based advisor who will charge you strictly by the hour for work done. The good ones will give you an hour of their time free to discuss your requirements and goals. Use it.

By saying " There is no real logic to my holdings (nor my wife's)" you most likely have not given any thought to asset allocation and risk management. You might want to self educate on that topic first. Many good books and web sites for doing so.
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Old 04-17-2012, 07:45 PM
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Buy a few books. The basics aren't tough, and the complicated part is so complicated that almost 50% of professional investors cannot outperform the market. No one worth their salt is going to spend time with a (no offense, this includes me) small stakes investor. The keys for you, IMO, are to diversify your risk (probably chapter 1 of any book) and to avoid investments that have big fees attached or are otherwise out of the "efficient market" (chapter 2). Put some money in an index fund and the rest in a debt fund. The toughest part is to figure out how much you can spend per year -- you don't need to limit yourself to earnings, as your goal should be to run out of cash the day before you die.
Good luck.
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Old 04-17-2012, 07:51 PM
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I agree with the hourly "fee only" advice above. If you also choose them to manage your assets as well (which they can do and not be commission-based brokers) you shouldn't pay more than 1% to 1.25% annual fee. In this industry, all fees are negoitable, this industry is looking for work, so don't be afraid to haggle.

Once you look around and get a few local reccomendations, the No. 1 most important thing to check if they're giving you advice on securities (i.e. probably anything your 401K) is to make sure they're registered and check their disciplinary history. It's a quick easy check for a ton of peace of mind.

http://www.oag.state.md.us/Securities/about.htm#planner

Would you trust your health to an unlicensed doctor? Exactly.

Please PM me with any questions.
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Old 04-18-2012, 04:21 AM
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Mostly good advice above. Members of the Garrett Planning Network (www.garrettplanningnetwork.com) charge by the hour. See if there is someone in your area. It's not a guarantee they are a good fit, but their business plan probably matches your needs. You can also check the National Association of Personal Financial Advisors (www.napfa.org). If you find one with a tax/accounting background it may be beneficial.
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Old 04-18-2012, 06:03 AM
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Some good advice here. I work with many financial planners. Like everything else, there are some really good ones and... those who I wouln't trust to manage a money market account.

The first thing that you need to do is determine what your short term, mid term and long term goals are. Not necessarily specific, but general goals. These may include purchasing a 2nd home, bigger boat, education for children, year of potential retirement etc. I would also suggest that you and your wife put together a cash flow statement which is an excellent way to see what you are making, spending and what you can afford to save. This would

As for interviewing advisors, you will notice that they all will have different styles. For me, I would lean toward someone who spends most of the meeting asking me questions rather than trying to impress me with how good they are. If they are doing most of the talking, keep looking.
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Old 04-18-2012, 06:07 AM
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Thanks to all. I have put out the word to a couple friends to see I can get some local suggestions. I think my situation is pretty damn simple for most pro's, so it will be more about personal fit. My strategy of benign neglect seems to have done OK vs the market, but now I have to think about actually making a plan.

sounds like fee based is the way to go
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Old 04-18-2012, 06:08 AM
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Chris, Can I ask who your 401k is with?
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Old 04-18-2012, 06:12 AM
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You're looking for a conservatively minded CPA or MAYBE an investment advisor. You want a basic set of rules to invest/live by that helps you with class allocation (r/e, mmkt, equities, bonds). At most you're talking about a few hours of someone's time.
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Old 04-18-2012, 06:16 AM
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Agree with above. Napfa fee only advisor.
check out www.seaclearfinancial.com
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Old 04-18-2012, 07:16 AM
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The only thing I would add is for god sakes don't spend an extra 1% or more per year to have someone set up and rebalance your portfolio
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Old 04-18-2012, 11:42 AM
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Interesting (to me) tidbit. multiple email messages from folks offering suggestion, and no trying to pitch me on working with them (being poor has some upside).

Several folks seem to have very high opinions of Vanguard as a great place to start looking. Just thought I would share that of those reading along.
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Old 04-18-2012, 12:57 PM
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i hired big al...he put me into hookers and blow
buyer beware i guess
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Old 04-18-2012, 01:24 PM
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Originally Posted by cgrand View Post
i hired big al...he put me into hookers and blow
buyer beware i guess
Dude, you got good value for yer money; and life ain't about money, life is about value.


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Old 04-18-2012, 01:38 PM
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I would go with a Fee based planner and not one charged by the hour. He/she gets paid by preformance of your investments and not by the time he spends with you. They usually charge a percentage of your holdings.
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Old 04-18-2012, 02:41 PM
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I would be a huge fan of someone who charged me a % of what he made me, but I chafe at the notion of paying on total holdings. I didn't notice that guy when I was making it.

Course I probably think like the small timer that I am
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Old 04-18-2012, 06:55 PM
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Originally Posted by cjd View Post
I would be a huge fan of someone who charged me a % of what he made me, but I chafe at the notion of paying on total holdings. I didn't notice that guy when I was making it.

Course I probably think like the small timer that I am
If I were a financial adviser, I would accept that proposition, and work out a sliding scale with you -- the more you make, the more I make (as a percentage of the total gain). We might agree that if I were able to double your money, you would give me 20% of the profit (which still leaves you with an 80% return -- hard to scoff at). Then I would send you to Las Vegas and have you put it all on red; one spin only. Of course, that is hyperbole, but the structure you envision encourages high risk investment. Point being, that no matter the structure, if your interests are not in perfect alignment the conflict can (and probably will) lead to disappointment. Paying by the hour comes closest to aligning your interests -- at least as to how you invest your money. But, I still stand by my prior advice: get some books and do it yourself, but keep it simple (especially if your estate isn't large enough that you have to worry about inheritance tax). Again, good luck.
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Old 04-18-2012, 07:50 PM
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My advice is a little different. There is an incredible amount of information available on the internet. This website is very good, http://seekingalpha.com/. Look at http://www.dividends4life.com/ and http://www.dividendgrowthinvestor.com/ . You can do alot of planning on broker's sites such as Schwab. Most financial planners are going to do a risk profile then use an asset allocation model to put you in a group of mutual funds or etf's. You can do that yourself if you have the interest and the time.
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Old 04-19-2012, 06:12 AM
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MOST people are lousy at managing their own wealth, with respect to investing for retirement. It is true, you can educate yourself, take the plunge, and save a few bucks. Unless you are willing to actively manage (even if you don't trade between funds very often, you still have to monitor the market and the sector(s) you are in) and spend the time to stay on top, then you should not pursue this option. AGAIN - some people do this and are successful; but in the aggregate I would estimate that they make up less than one percent.

Advisors will not charge based on a percent of gain. They have costs that are recurring, no matter what the nature of the markets and their success/failure rate. Back office costs; data costs (these can be very significant), payroll costs, and those wonderful costs brought courtesy of the Federal Government. They also never know when the SEC is going to walk in unannounced (and they do), so they cannot cut corners on costs associated with records keeping and due diligence, when the market is suffering.

You keep calling yourself a little fish. There are thousands of firms that will be happy to have your business. This is where you should be focusing your time - researching firms, not researching your way to a self-granted degree in Finance.

My overpriced .02


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