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My brother is my Financial planner...ethics question

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My brother is my Financial planner...ethics question

Old 09-04-2015, 05:11 PM
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Default My brother is my Financial planner...ethics question

My brother is a CFP and I trust him more than anyone else I could pay to provide that service. We recently had a baby boy and opened a 529 thru the state of Alabama. This plan requires a CFP for enrollment. My brother is charging a 3.5% commission and my wife is pissed more on the concept than the yearly amount. I'm not really sure how I feel about it. On one hand he owns his on business and has to pay the bills. On the other he's taking money from his nephew...(~$170/year I understand it's small wife still pissed)

We do pay advisor fees for other brokerage accounts he helps us manage

What y'all think
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Old 09-04-2015, 05:18 PM
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Not sure about that business, but I know in mine, you can theoretically get in some ethical sticky situations charging different people different rates.
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Old 09-04-2015, 05:21 PM
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So your wife expects him to work for free? I assume he has his own kids he needs to put through college.

What is the market rate commission for this type of service?
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Old 09-04-2015, 05:23 PM
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I'm thinking if you guys are that tight, your nephew will benefit in others ways, whether it's more money in his account or some other non financial way.
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Old 09-04-2015, 05:27 PM
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Originally Posted by cfarmd View Post
My brother is a CFP and I trust him more than anyone else I could pay to provide that service. We recently had a baby boy and opened a 529 thru the state of Alabama. This plan requires a CFP for enrollment. My brother is charging a 3.5% commission and my wife is pissed more on the concept than the yearly amount. I'm not really sure how I feel about it. On one hand he owns his on business and has to pay the bills. On the other he's taking money from his nephew...(~$170/year I understand it's small wife still pissed)

We do pay advisor fees for other brokerage accounts he helps us manage

What y'all think
You're brother is a doosh...but if 3.5 is less than the going rate let it go.
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Old 09-04-2015, 05:27 PM
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so if he invested it poorly and you lost money he could always say he had paying customers and yours just went by the wayside. In the words of KGB Teddy "Pay the man his monnnneeey"
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Old 09-04-2015, 05:28 PM
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Your wife is right.
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Old 09-04-2015, 05:30 PM
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I agree he shouldn't work for free. He doesn't have kids but that really doesn't matter. My wife is ok with the advisor fees for our investment accounts she just isn't happy with him charging his own nephew. Boys we will never understand the woman's mind so take that for what it's worth. My wife's parents gave some money for the 529 and she's probably mainly upset that my bro will "get" some of that albeit it's a very small amount. I just don't know I'm stuck in the middle trying to mitigate...
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Old 09-04-2015, 05:32 PM
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I would look at moving your accounts to an "outside" broker to help you sleep better at night. Interview several and make a joint choice with your wife.

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Old 09-04-2015, 05:35 PM
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Originally Posted by avalonandl View Post
I would look at moving your accounts to an "outside" broker to help you sleep better at night. Interview several and make a joint choice with your wife.

Avalon
Tend to agree. Family and finances are probably best kept separate.
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Old 09-04-2015, 05:38 PM
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Hard to believe that there are so many of us thinking that a commentary about a wife bitching about $170 is worth it. That amount won't fill most live wells.

There's back-flow to this story.
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Old 09-04-2015, 05:44 PM
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Originally Posted by bamaboy473 View Post
Hard to believe that there are so many of us thinking that a commentary about a wife bitching about $170 is worth it. That amount won't fill most live wells.

There's back-flow to this story.
Seems like the money is the issue for you. Why is that?
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Old 09-04-2015, 05:50 PM
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Wife and i are both pharmacists the money isn't the problem it's the concept that makes her upset and honestly kinda bothers me too
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Old 09-04-2015, 05:50 PM
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That's 14 dollars per month. I'm sure you're wife gets her hair and nails done. Everytime mine goes and gets those done (once a month), it's a 200$ Saturday.
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Old 09-04-2015, 05:55 PM
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Originally Posted by cfarmd View Post
Wife and i are both pharmacists the money isn't the problem it's the concept that makes her upset and honestly kinda bothers me too
Honestly I didn't even catch the part about $170/ year but the amount is irrelevant. I can't imagine charging family or even close friends for my expertise.

Sleep well knowing you're a better person than your bro.

Don't respond in kind when he needs something. It's not worth the hassle.
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Old 09-04-2015, 06:01 PM
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I'm a little confused. Does he charge you and "advisor fee" for your investment accounts on top of whatever fee's you are paying a broker or mutual fund? Is it a "wrap" type of account where the fee is a percent of your total invested?

Not sure why you'd need a CFP to set up a 529 plan. That's a new one on me. And why Alabama if you are in NC?

If I was a CFP, no way would I charge my brother (or sister) to set up a 529 plan. That's just me though.
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Old 09-04-2015, 06:01 PM
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It is more than likely that the load is dictated by the fund and his broker-dealer. He can't waive it. If he was charging fees on top of that, that would be different. Just ask him.
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Old 09-04-2015, 06:02 PM
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U guys focusing on the amount are missing the ball it's not the amount of money as I've said many times. I don't even know why I'm posting this I just need to get it off my chest a little. Feels good just getting it out sometimes
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Old 09-04-2015, 06:05 PM
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I wouldn't charge my family for anything. On the other hand, they wouldn't complain or worry about it if I did.
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Old 09-04-2015, 06:09 PM
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Originally Posted by Boataholic View Post
I'm a little confused. Does he charge you and "advisor fee" for your investment accounts on top of whatever fee's you are paying a broker or mutual fund? Is it a "wrap" type of account where the fee is a percent of your total invested?

Not sure why you'd need a CFP to set up a 529 plan. That's a new one on me. And why Alabama if you are in NC?

If I was a CFP, no way would I charge my brother (or sister) to set up a 529 plan. That's just me though.
NC no longer allows tax deduction for 529 contributions. Alabama returns are historically among some of the highest. You can enroll in any state you desire. Without the ability to claim a tax deduction I picked the state I hoped will give me the best return over time. Some states require enrollment thru a CFP such as Alabama. We pay CFP commission amd fees to Alabama for having the account. It's 3.5% on new cash contributed per fiscal year not 3.5% of the total 529 balance that's an important distinction to make

Again I'm just venting carry on gents
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