Howdy All,

Looking into getting/working with a financial advisor, but wanted to get y'alls thoughts. Is it worth it? We don't have much in assets (just our house/401ks) currently but I expect that will start to change as we start into our late 20s/early 30s. I'm normally a fee sensitive guy and prefer a lot of hands on, but that's an added stress and might be nice to have someone holding us accountable to keep us on track.

Sounds like you're in need of a fee-only financial planner. FA's cannot charge for investment advice when there are no assets to manage. You would engage a CFP who offers that compensation model much like you would a CPA or attorney. Good luck and congrats on thinking ahead!

Stagecoach said:

---

Sounds like you're in need of a fee-only financial planner. FA's cannot charge for investment advice when there are no assets to manage. You would engage a CFP who offers that compensation model much like you would a CPA or attorney. Good luck and congrats on thinking ahead!

---

Yeah, so the guy I've briefly spoken too is actually a CFP, so it sounds more like the latter of what you were saying.

I guess I am just curious to see if anyone has ever used a CFP and wish they hadnt or If working with a CFP is actually worth it.

If you value ongoing advice, a plan over an investment portfolio, and outsourcing, you're much more likely to appreciate having an advisor.

If you believe you can manage your investments/plan better than anybody else and don't value outsourcing, you're much more likely to think advisors are out there to scam people.

we really need a sticky thread for this topic. it comes up seemingly every month.

At this stage in your life, invest in an S&P index fund and ride the market as a whole. Dollar cost average so you're adding to it every month. You're in it for the long haul.

If you reach the point where you have enough wealth, a financial advisor is the way to go. When the time is right, don't worry about the fees. Focus on the return after the fees.

When you sell a house, the real estate agent's fees seem harsh. However, if you get a good agent and listen to his or her advise, your home will sell for far more than you pay in fees vis-a-vis doing it yourself. It's the same with any professional. You can save a lot of money doing your own root canal, but I wouldn't recommend it.

Inadvertent post

hypeiv said:

---

Make sure you take advantage of Roth IRA and HSA early on. I always suggest people save for retirement in this order.

1. 401k up to your employer match
2. Roth IRA up to max
3. HSA up to max (note: I recommend save and hold on HSA, and keep this money invested, pay medical out of pocket and save receipts)
4. Any more than the above start increasing 401k

---

Nitpick here, i mostly agree..

However, I wouldn't fully fund HSA in perpetuity. I'd scale that back and look elsewhere once you get to 2x or 3x maximum annual out of pocket. I wouldn't want to enter retirement with $1,000,000 in an HSA.

Biggest reason, most likely have really restrictive investment options and portability options compared to 401k, and fees can become very high in these plans if not careful. Also, administrative overhead to withdraw money tax free.

Beyond that, unless things change drastically, most people being 65 don't need more than $5000-$10000 a year to cover medical costs (premiums, deductibles, coinsurance, drugs, etc). On that assumption, better off with flexibility of IRA in my opinion.

Not horrible to stick with HSA, I just believe at a certain level benefits don't match costs.

That's a great platform, and definitely your sequence is perfect with this option I haven't seen that for group HSAs. Is this an employee plan or something you've done in your own?

Somewhere, someone is paying to administer the HSA services. May be insignificant, may be built into claims or premiums, etc. But there is a cost to that plan, just like 401k.

I wish I had that plan available!

Consider other tax deferred investment options as well. HSAs are great and offer something much needed in retirement, but are pretty narrow in scope.

The recent conversation is why having an advisor would be advantageous even for folks who don't have $500k to invest. There's a great deal of valuenin being exposed to the above products/knowledge before you go putting it into a taxable account or paying down a mortgage, for example.

I don't think CFP's are necessary until you get to the point that taxes become more complex. In other words, once you max out all of the obvious tax deferred strategies and are then forced to start putting incremental money in taxable accounts as last resort is when you may want to consider.

I didn't use a CFP until I hit 42 because investment strategy is frankly not that hard to do until you get to that point where you have more money to invest than all of the tax deferred vehicles allow. I bailed on self-management at that point because I didn't have the time nor desire to understand the depth of knowledge I would need to factor for tax implications.

nactown has the right answer.keep it simple till you learne more/have mo money.common sense questions/answers from this board is a good place to start

hypeiv said:

---

SquareOne07 said:

---

Consider other tax deferred investment options as well. HSAs are great and offer something much needed in retirement, but are pretty narrow in scope.

---

When I see comments like this, I think most people don't know you can pull HSA money for non-medical after you turn 65. The scope is only narrow until you turn 65, then it can be pulled for any reason.

Assuming you have decent investment options in your HSA its basically the same as an IRA. The only differences I can think of is no-penalty distribution is 65 vs 59.5 and you can't use an HSA distribution as a qualified charitable distribution at age 70.5 (however there are no required distributions at this age anyway which some would consider another advantage of HSA over IRA).

---

While the distributions after 65 DO come without penalty, they ARE taxed, which is notable.

Nothing against HSAs whatsoever and are definitely something to fund, but all elements should be known.

Do people not spend money on healthcare after they retire?

Of course they do. So use the HSA funds for health care only. Even after retirement. It can be used for a lot of expenses. You can use it to pay Medicare premiums for example.

Nope, you're on the right path! The tax treatment of HSAs is fantastic and should be taken advantage of, but the limitation on the amount put in and limited investment options just lend itself to the fact that investors should know about other tax deferred vehicles other than the common 401/403 and different IRA options.

You brought up a great point with the HSAs and not a lot of folks know about that, especially novice investors/clients just getting started that are oftentimes underserved and possibly never get exposed to this kind of information unless they subscribe to the Brain Trust that is TexAgs

What limits and fees on HSA are your talking about? I have mine at Livelyme.com and have 0 fees and a wide variety of low cost index funds. I think Fidelity has a similar account too if you want a bigger name.

I don't pay any more in fees for my HSA than I do for my Vanguard Roth IRA or 529 accounts.

https://livelyme.com/pricing/

Quote:

---

I'm normally a fee sensitive guy and prefer a lot of hands on, but that's an added stress and might be nice to have someone holding us accountable to keep us on track.

---

Ok--so I was you ~18 years ago. I got me a nice financial adviser (non-CFP) (fresh out of A&M like myself, friend of a friend - mistake on my part, he was just trying to make a living) and in our initial consultation I mentioned I'd like to get at least a little education and thorough explanation of what I was getting.

Homeboy Baggadix sold me a $1M whole life insurance policy when I was making $46K a year with no kids, spouse or other obligations. The insurance premium was ~400+ a month and he suggested contributing to that before my 401K or IRAs etc. in a big shiny (obviously cookie cutter based on inputs) binder. The binder went over my goals (none of which were addressed other than...you are $X short here--consider contributing more). I think the last page was a form to give him 5-10 people who might be interested in his services. It took about a year for me to educate myself and get pissed...I fired the guy.

If you give a damn (which it sounds like you do), for the fee of a year or two of an adviser you can take IN PERSON (and way less for online) CFP classes from other CFPs about insurance, taxes, investments, estate planning that build on each other. But why do that if you don't want to be a CFP? The answer is because that foundation will allow you to know what to do in the future--and what questions to ask whoever is involved in your money even if you do decide to go down the managed route.

All that said, a fee only/hourly based adviser has benefits (others do to if you want to be hands off--but it sounds like that isn't you). Personally the biggest would be to hold me accountable for my overall financial picture. Meet every 3-6-12 months--whatever--but he's calling me out on my ***** Still not having a will. For not re-balancing my IRA. For not upping my contribution to 529 for my kid after they got out of daycare. For not upping my home owners insurance coverage after crazy appreciation. For not shopping home/auto/landlord insurance yearly. The guy/gal should be my financial wife and nag me to get the important/annoying/cumbersome **** done.

**source, sold a bunch of inappropriate products and then took CFP classes; passed CFP Exam but abandoned the experience requirement.

FinMick said:

---

Quote:

---

I'm normally a fee sensitive guy and prefer a lot of hands on, but that's an added stress and might be nice to have someone holding us accountable to keep us on track.

---

Ok--so I was you ~18 years ago. I got me a nice financial adviser (non-CFP) (fresh out of A&M like myself, friend of a friend - mistake on my part, he was just trying to make a living) and in our initial consultation I mentioned I'd like to get at least a little education and thorough explanation of what I was getting.

Homeboy Baggadix sold me a $1M whole life insurance policy when I was making $46K a year with no kids, spouse or other obligations. The insurance premium was ~400+ a month and he suggested contributing to that before my 401K or IRAs etc. in a big shiny (obviously cookie cutter based on inputs) binder. The binder went over my goals (none of which were addressed other than...you are $X short here--consider contributing more). I think the last page was a form to give him 5-10 people who might be interested in his services. It took about a year for me to educate myself and get pissed...I fired the guy.

If you give a damn (which it sounds like you do), for the fee of a year or two of an adviser you can take IN PERSON (and way less for online) CFP classes from other CFPs about insurance, taxes, investments, estate planning that build on each other. But why do that if you don't want to be a CFP? The answer is because that foundation will allow you to know what to do in the future--and what questions to ask whoever is involved in your money even if you do decide to go down the managed route.

All that said, a fee only/hourly based adviser has benefits (others do to if you want to be hands off--but it sounds like that isn't you). Personally the biggest would be to hold me accountable for my overall financial picture. Meet every 3-6-12 months--whatever--but he's calling me out on my ***** Still not having a will. For not re-balancing my IRA. For not upping my contribution to 529 for my kid after they got out of daycare. For not upping my home owners insurance coverage after crazy appreciation. For not shopping home/auto/landlord insurance yearly. The guy/gal should be my financial wife and nag me to get the important/annoying/cumbersome **** done.

**source, sold a bunch of inappropriate products and then took CFP classes; passed CFP Exam but abandoned the experience requirement.

---

I hate that that was your experience when you were so young and it's *extremely* unethical and sec serving behavior like that that gives every single person in the industry a terrible reputation.

What you described at the end there...having somebody to hold you accountable, help you understand the entire picture and how all parts operate with eachother...that's the value of an advisor. Somebody, like you said, to be your nagging financial wife, but sometimes it's nice to be in this seat too and help people realize they're not as in bad of shape they think they are or really help them out a plan in place for something they had no idea where to start.

Again, I'm sorry to hear about your experience. That's absolutely trash and I'm pretty darn confident of the place (or type of place) that person worked with.

If given Roth 401k option is there any reason not to go this route? Not eligible for roth ira

babyshark said:

---

If given Roth 401k option is there any reason not to go this route? Not eligible for roth ira

---

It'd depend on your current tax situation.

Simple W2 for me and wife

If you are young it is almost certainly preferred to use Roth 401k IMO.

If you have a long time horizon, the vast majority of the balance of your account at retirement will be earnings.

Very helpful info in this thread.