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Thinking of leaving my Financial Advisor. Inputs?

6,378 Views | 57 Replies | Last: 1 day ago by 62strat
OldArmyCT
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10:50p, 10/21/24
AG
There's not a darn thing wrong with hiring an FA, nor is there anything wrong with doing it yourself. I have an FA for a couple of reasons. First I have 3 managed single stock portfolios in one account, maybe a total of 170 different stocks. <10% of those are losing money. There is no way I could do that on my own. That's what I wanted, I didn't want an index fund, I have that in my 2nd IRA in ETF form, along with about 8 smaller sector ETF's. I have been taking RMD's for 6 years now and my IRA's have just about doubled.
But investing wasn't why I chose to stay with an FA, I do that BC my kids are my beneficiaries, my wife died 5 years ago. None of them know doodley squat about investing, IRA rules, heck, economics period. But they know my FA, and more importantly they know his assistant. If I go there's a better than even chance the money may last, even with them having to take a lot of it in <10 years.
One last thing. How many stories have you read of old guys getting scammed or just blindly spending just about all of it when they got old. An FA will notice that and stop it. Don't think it can't happen to you.
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YouBet
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In reply to OldArmyCT • 10:33p, 10/23/24
AG
OldArmyCT said:
There's not a darn thing wrong with hiring an FA, nor is there anything wrong with doing it yourself. I have an FA for a couple of reasons. First I have 3 managed single stock portfolios in one account, maybe a total of 170 different stocks. <10% of those are losing money. There is no way I could do that on my own. That's what I wanted, I didn't want an index fund, I have that in my 2nd IRA in ETF form, along with about 8 smaller sector ETF's. I have been taking RMD's for 6 years now and my IRA's have just about doubled.
But investing wasn't why I chose to stay with an FA, I do that BC my kids are my beneficiaries, my wife died 5 years ago. None of them know doodley squat about investing, IRA rules, heck, economics period. But they know my FA, and more importantly they know his assistant. If I go there's a better than even chance the money may last, even with them having to take a lot of it in <10 years.
One last thing. How many stories have you read of old guys getting scammed or just blindly spending just about all of it when they got old. An FA will notice that and stop it. Don't think it can't happen to you.
Good point. When my FIL's dementia started getting bad, one of the indicators we got he was having issues was because his FA called us and said, "Hey, your Dad is spending money way out of character and requesting me to send him nonsensical amounts of money. We need to address this."

There is no telling what could have happened if the FA wasn't there to run point.
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infinity ag
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In reply to ToddyHill • 2:12p, 10/30/24
ToddyHill said:
I managed my money for years…then signed up with Schwab Wealth Management. I left them for Fidelity for an issue not related to their fee structure. However, at one of our meetings the advisor said, "I feel I would be doing my clients a disfavor if their results beat the S&P yearly." I'm like what??? He said his purpose was to grow clients portfolios without the stress incurred by the fluctuations in the S&P.

I am now back to managing it myself.

For 15 years I avoided index funds. Because an Aggie I met on IRC in the late 90s who was into investing told me that he didn't like index funds. So that stayed in my mind.

More thrilling to pick stocks.

But my MBA Finance Prof said in class that if you want to make money, go with ETFs. That stuck too. So 10 years ago, I was making an average of about 10-15k a year with a lot of struggle. I switched it up and let's say over the past 10 years since 2014, I have made "a lot". Money begets money which in turn makes more money.

I am currently "between jobs" and I am not worried. I have made more money on a good day that I made working all year in my job and I am in tech. Overall, I make several times more than my salary.

So why work for a-hole bosses and BSC corporations? I now drop my kid to school and pick her up, watch my investments, read TexAgs, study for tech certifications. I do want to work again but on my terms.
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infinity ag
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In reply to Hoyt Ag • 2:13p, 10/30/24
Hoyt Ag said:
It would need to be 23% plus more to make up for the fees

I left my advisor 18 months ago. Best decision ever. 3 fund portfolio and doing great since. And I save the 10k a year in fees

Holy crap, how do the fees work? I have been investing since Nov 1999 when I bought my first stock. I have NEVER had a paid advisor. I avoid them like the plague.

Charles Schwab hates me because I have all my money in their accounts but I ignore their calls to sell me services "to manage my money for retirement". Also Empower. I just their aggregator for free and don't call them for help.

As an example, If I had $1M portfolio, what would the fees be?
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infinity ag
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In reply to OldArmyCT • 2:19p, 10/30/24
Quote:
One last thing. How many stories have you read of old guys getting scammed or just blindly spending just about all of it when they got old. An FA will notice that and stop it. Don't think it can't happen to you.

I know of 1 such story, a couple in their late 50s had their kid in my son's basketball league about 10 years ago. They got phone scammed for 10k.

But then they are not the educated types. So I can easily see them getting scared. They had IRS issues and so the call from the scammer scared them more.

The only situation I would get scammed is if I got dementia. I am decades away from that age group. I hope by then my kids are taking care of me (us).
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OldArmyCT
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10:49p, 10/30/24
AG
Take a class on account titling and beneficiary options taught by a board certified estate attorney. I can almost guarantee a number of you guys are doing something wrong. Then ask your spouse what she would do with your finances if you suddenly "went away."
Just a few things to think about.
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EliteZags
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In reply to infinity ag • 1:31a, 10/31/24
AG
infinity ag said:


What is your advisor's performance? All that matters is the percentage of gain from last year. No other mumbo jumbo matters.

I suggest you do your own, even if it is a percentage, just to gain confidence. Put it in index funds and sit back and relax.

SPY is a good start.
23% this year. Is your guy better?

SPY Chart

I wouldn't say performance from last year is the best measure, pretty much all of us here long heavy in growth/tech have crushed the SPY and very few would be a qualified FP
I've about doubled that return while still being ~70% indexes
past 5 years may be more indicative including 2 major downturns but even then those of us that just held steady through prob ended up better off

I could see one being useful when winding down for FIRE withdrawal tax optimization planning/advising
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AgsMyDude
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In reply to SquareOne07 • 5:38p, 10/31/24
AG
SquareOne07 said:
If all you pay your advisor for is to invest in the market for you, you probably shouldn't be paying them at all


What's the best way to find an advisor like this? My experience is they all want to sell me something. Fund or insurance
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2wealfth Man
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8:13p, 10/31/24
AG
SCHD is 0.06%
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nactownag
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In reply to AgsMyDude • 8:46p, 10/31/24
AG
Fee only CFP is a good start.
Then find someone with a tax focus. Preferably one that has a CPA on their team and can offer tax return prep and advice.

And someone that can offer more investments as your net worth grows to be able to invest in private equity, private credit, infrastructure, GP stakes, Pro sports and more.
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Carlo4
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In reply to AG_2006 • 7:06a, 11/1/24
AG
AG_2006 said:
Cost is only an objection in the absence of value.

The hard part isn't making money. Even the forum wizards here can make 20%+, this year, in any S&P index fund. The trick is keeping your money, as your money. The advisory fee will pay off 10-fold later if your investments are layered in a tax efficient manner now….so that you control MORE of your tax destiny later.

A good FA won't promise any returns. Their value is in the planning.

(I am not a FA/FP, but I do see their value)


Very well said. I have an old inheritance tied to a brokerage account with a financial advisor. The guy knows when to sell and when to buy so I rarely owe any taxes year to year even when the market goes up big.
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infinity ag
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In reply to EliteZags • 12:15p, 11/1/24
EliteZags said:
infinity ag said:


What is your advisor's performance? All that matters is the percentage of gain from last year. No other mumbo jumbo matters.

I suggest you do your own, even if it is a percentage, just to gain confidence. Put it in index funds and sit back and relax.

SPY is a good start.
23% this year. Is your guy better?

SPY Chart

I wouldn't say performance from last year is the best measure, pretty much all of us here long heavy in growth/tech have crushed the SPY and very few would be a qualified FP
I've about doubled that return while still being ~70% indexes
past 5 years may be more indicative including 2 major downturns but even then those of us that just held steady through prob ended up better off

I could see one being useful when winding down for FIRE withdrawal tax optimization planning/advising

What I meant was that it SPY is a good simple investment to start. Easy to understand and least risk and you make good money most years. Yes, there are others but I think SPY is a good way to get feet wet.
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infinity ag
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In reply to AgsMyDude • 12:17p, 11/1/24
AgsMyDude said:
SquareOne07 said:
If all you pay your advisor for is to invest in the market for you, you probably shouldn't be paying them at all


What's the best way to find an advisor like this? My experience is they all want to sell me something. Fund or insurance

Why does a smart person like you with an A&M degree need an advisor?
Do your own research, ask questions here and you will learn a lot. You will make mistakes also but you have the power.

I have NEVER hired an advisor. Made many mistakes in 25 years but for the past 10 years I have been doing really well. Make many times more than what I earn in my job.

The only value from an advisor is tax planning for things like estate and a few others things. I personally am not there yet. For what I do (make money), I don't need an FA.
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AggiEE
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In reply to permabull • 1:33a, 11/2/24
permabull said:
I have a question for everyone who is trying to beat the s&p500... Do you mean for your entire portfolio or just the equity portion?

Even with a 90/10 stock bond blend it would be pretty hard to get a portfolio to beat the s&p500 on a green year with the bonds dragging your returns down.



Considering the Shiller CAPE is around 40, expected returns on the S&P500 is roughly 2.5% real assuming no changes in valuation for the next decade or so.

10YR treasury yield is over 4%. Assuming inflation of roughly 2% over the decade, that 2.5% real for stocks is not looking like a great bet compared to 2% real on a much safer instrument. And valuations for stocks could correct, and you're possibly looking at a dead decade for US stocks

The equity risk premium for US stocks hasn't been this low since the dot com bubble. Thankfully, there are attractive alternatives internationally in developed and emerging markets as well as small cap value stocks.
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OldArmyCT
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10:59a, 11/2/24
AG
Trying to beat the market is the last reason anyone should hire an advisor.
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Leander - Ag
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In reply to Brian Earl Spilner • 11:49a, 11/12/24
AG
Brian Earl Spilner said:
You don't need a FA.

Put your Roth into the S&P 500 and never think about it again.
this or manage your own money. It's not hard
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GenericAggie
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In reply to nactownag • 6:31p, 11/12/24
AG
nactownag said:
It depends on what you're getting for the 1% and how much money you have.

At our firm, we charge up to 1.25% (on assets under 1 million) but we deliver access to private investments you can't get access to easily. Perhaps more significant is we have an in house tax business that clients really appreciate having a one stop shop to get tax advice and investment advice at the same place.

So if you are paying 1% and not getting tax advice and preparation and not getting access to private placements then yes you're paying too much in my opinion.



Firm name please? DM me if that's more appropriate. Thanks
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nactownag
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In reply to GenericAggie • 6:38p, 11/12/24
AG
Holistic Planning
www.holisticplanning.com
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halfastros81
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7:42p, 11/15/24
AG
I can tell you my personal experience. I had fidelity at 1% for managed assets . The performance wasn't great . I switched to Merril Lynch at 0.75% and they have run circles around Fidelity and they also answer the phone or
Call me back quickly if I call them. They have diversified me quite well and have me in PE investments that Fidelity never offered. I have been with ML now for 6 yrs I believe.

Self managing is certainly a viable option but for me paying the fee has been well worth it. They are financial pros, I'm an Engineer that knows the basics and can recognize BS when I hear it most of the time. Haven't heard any BS from these guys. They also meet with me personally a few x per yr. Fidelity was meeting with the acct. manager once a yr and he got the expert on the phone. Never saw or met the expert.

Also I'm aware that ML is owned by Bank of America and they are among the wokest of banks. I have asked about that and the guys that manage my accounts just laugh and say it has no real impact on anything they do and it seems to have held true.
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Leander - Ag
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4:01p, 11/19/24
AG
Anyone have a good book / resource on tax planning (protecting RSUs / investments, etc)?

Also looking to learn more about insurance options in retirement.
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62strat
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In reply to YouBet • 4:50p, 11/19/24
AG
Quote:
Also, if you are at Fidelity there is some level of advising you get by default by just having your money there. Only reason I know that is because we have a portion of our investments there and they reach out to me all the time and have told me this. I do not know if there are any minimum balances for that though.
This.

I have a meeting with a financial advisor this friday.. I have one about every other year. They don't charge me anything. They just call sporadically call and ask if I want to set up a meeting to go over retirement goals.

I also don't know if there is any min. balance.

I used a diy approach with investing my wife's old TRS and old 401k rollover back in 2017. It was $50k, and it's almost $300k today, so honestly, I don't know that I need a whole lot of advice on that front!

I literally put it all in COST, NFLX, AAPL, FSELX, FFFGX and FNCMX in varying amounts, and haven't touched it since, and don't plan too until retirement.

Maybe I got lucky.. but I feel if you spread it around a handful of proven stocks/mutual funds and just leave it alone, you will do fine.



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nactownag
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In reply to 62strat • 4:53p, 11/19/24
AG
You get what you pay for many times!
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62strat
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In reply to nactownag • 4:55p, 11/19/24
AG
nactownag said:
You get what you pay for many times!
I didn't pay anything, so not sure what you mean.
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