Financial Adviser

[Steve-Maine]

Has any one used a financial advisor that doesn"t sell anything ? I have always used one that is connected with some company selling a product. I feel sometimes they sell me something that they make the most commission on. That"s for any help.

 

[woodbutcher]

Steve,
For several years, we went to a see a local boy who worked as a financial adviser for a big company that is based in Minnesota. He gave us a customized notebook with printouts of his plan and the mutual funds we would buy. We were required to buy a large life insurance policy for my wife and me. We staid with his advice until all three of our sons were out of college. The young man advanced in his company to the point that he referred us to one of his subordinates when we requested a meeting, so we quit his service. I think he did better from seeing us than we did from seeing him. I now have a fee-only adviser who I pay at each visit. I like his situation better, but I don"t go often. I believe the important part of all this is the planning, whether it be with or without an adviser.
Butch

 

[Bill in IN]

I'll agree with the planning being the important thing 100%. A plan that works for you...

 

[bjb in TX from Ne]

There are two types:

Commission base: they make there money by selling you products

Fee Only: They charge you a flat rate per visit and are supposed to be neutral.

 

[showcrop]

I use one that works on a percentage basis. In order to make more for himself he has to make more for me. I believe that they are important basically because things are constantly changing and what is good when the market is loosing ground is not going to be the best for when the market is gaining.

 

[Stubbyie]

First, realize that the decision to interact with and the selection of a financial advisor is one of the most serious decisions you will ever make.

Secondly, are you sure you need a fiancial advisor? If you're smart enough to pose the question you can probably figure out the basics yourself and save all fees and costs. Forget about "timing" the stock market as you--and your advisor-- can't do it successfully (for a number of reasons, some practical, some technical). If you or your advisor come up with weird types of "investment" that you've never heard of, run don't walk.

If you've got spare bucks you really don't need (think 5-yrs plus, ten is better) park it in some no-load mutual fund that tracks the entire stock market. Then forget about it, let it sit. If you can't let it sit that long due to some forseen need, you don't have the spare cash in the first place and shouldn't incur the risk (keeping in mind definition of 'risk' is different for each person and scenario).

The only way to go is to find an advisor that is 'fee only' that you pay for services.

Do not agree to any percentage-based agreement as you will be bled dry over time. Look at AARP (and CR, see below) analysis of how much fees deduct from your account balance over time: you can lose several hundred thousand over your remaining life and never realize what's happening.

Make certain the company and the individual have a state-licensed 'fiduciary responsibility'.

If the advisor has anything to sell, they do NOT have your best interest at heart. Stay away from insurance salesmen and banks. Their only interest is getting their hand into your pocket.

Look at their credentials critically and do an Internet search for each string of letters behind their name. You'll quickly find that most are meaningless. Realize anybody can hang out a shingle and become a 'finanancial advisor', even you could if you wanted to.

Steer clear of BBB-rated as means nothing if you look into how BBB works. Same for Angie's List: borderline scam in that poorly rated companies can buy their way into a better rating by increasing their payment(s) to the website.

Somebody in your state licenses financial advisors. Ask questions and do your homework. It's your money--don't give it away. If you insist on doing so, let me send you my address. Cash only, please.

An excellent source is Consumer's Report (CR). If not a subscriber you can use your local library. Look up their 2013 issue on how to select financial advisor and what to watch for.

Bottom line: get your estate in order (will, durable powers of attorney for decisions, etc) and build a realisitic basic net worth statement and then go looking for financial advice.

Realistically, unless you have a couple hundred thousand-plus (and that's a bare minimum) spare cash hanging around that you don't need for years-- the 'real' advisors won't be interested--unless you use the fee-only type--and the only one's you'll attract will be the scammers and scavengers and bottom-feeders. And, again, if you don't have that much you don't need advice, you just need to do a little homework.

The only things worse than fianancial advisors are lawyers and real estate agents, but it's a close vote. Don't forget congressmen.

The foregoing does not take into account the possibilites when 401s and similar are discussed, particularly roll-overs and managment over time and tax implications.

This may not be what you wanted to hear, but you asked. Please post back how you proceed and what you learn over time that we may all pay attention and learn from your experiences. Nobody has spare money to waste.

 

[bison]

ask an adviser to show his own portfolio,...i bet he has none. :wink:
Most are dirt poor themselves :shock:

 

[JD Seller]

The other posters have pretty well covered the basics. The first thing I would think about is the amount you are talking about investing. If it is under 200-300K then a financial adviser would not do you much good. IF it is more than that they MIGHT do you some good.

I have found my tax attorney and stock broker, that are paid a hourly rate, usually give me good advice. For most passive investors you are just about as well off just picking some good mutual funds and letting your money ride them.

The odds of finding the next Microsoft before their IPO is about the same as hitting the lotto.

Any commission based investment adviser I was around made more than their clients. They are making money on the back side you do not know about. So they sell you some investment and they make money on both ends. You may or may not make anything but they did up front.

 

[Dean]

Bingo.

Dean

 

[charlespretzer Ks.]

The best mutual fund I've found is Vangaurd health care, though I took all my money out 2 years ago & bought my nieghbores farm.

 

[John T]

This reminds me of electrical or legal questions posted here for which I offer my standard advice, CONSULT A LOCAL TRAINED HONEST COMPETENT PROFESSIONAL (versus lay persons) and that being said where commissions are involved consider the possibility the 'adviser" may have a vested interest grrrrrrrrrrrrr. I'm into mutual funds with a long proven track record and a few insured funds myself and at my age seek more conservative investments versus risky ventures. I've tried different "advisors" over the years and finally settled in with ones I've learned to trust and who have performed well.

Do your homework and make wise choices

best wishes

John T

 

[Wile E]

What you need to do is read books on the subject and then find a good accountant to help you with the tax portion of it all.

I think that the business of financial advisers ranks down there with used car salesmen and TV evanglist shysters.

 

[Stan in Oly, WA]

Well conducted studies have shown that no financial advisors are able to provide advice that offers you an advantage over random chance going into the future. Some, however, have amazing track records and, if they happen to work for big brokerage houses or other advice based financial institutions, earn astronomical bonuses for their expertise. This is because there are literally millions of financial advisors in this country. If we track the success rate of each person's advice, some will have incredibly high accuracy rates---even for many years running. This would also be true if we were to track the success rates of a similar number of roulette players. Some would exhibit winning streaks which would defy all odds for an individual. However, a rational person would know better than to ask for roulette betting advice from someone just because that person had won the last 25 roulette bets in a row. Out of a million roulette layers, the odds of at least one person winning 25 times in a row approach certainty. But that doesn't give that person any advantage whatsoever on the next spin of the wheel. The fact that human nature makes it almost impossible for most people to believe that this is true is one of the things that make casinos, and brokerage houses, so lucrative.

It's relatively easy for an intelligent person to understand that "past performance is no guarantee of future results" in the casino, because the laws of probability are not actually all that complicated. Information related to financial investments, on the other hand, might as well be infinite, and can be about as complicated as anything in the world. A financial advisor can so easily overwhelm the average person with information that the person can't help but believe that the advisor must be an expert at what he or she does. And a huge proportion of them ARE experts at what they do. What they actually do is the issue. What they do is take a fee for providing very complicated and compelling reasons for why you should put your money on red or black. Of course, some get paid an hourly rate to explain to you how the system works---but that's a different story.

Stan

 

[Dick2]

I'm my own financial advisor. If I incur a loss, it is probably less than I would have paid someone that made the loss decision for me.

I had one person in the family that became a financial advisor; it was amazing that he didn't end up in prison - or somebody shot him. However, he made the mistake of believing in his own pitch and went lost his shirt.

 

[TomH in PA]

I use one of the online discount brokers (TD Ameritrade, but there are others). They can handle everything from regular savings to trusts to IRAs, have plenty of advice available if you want it. And they don"t try to sell you anything.

I would never give money to an "advisor" or full service broker; they"re just selling whatever pays the best commission.

 

[Spook]

If that. Worst are "faith based advisors". A couple inlaws got stung by one. 16% commissions and huge surrender fees. Or in one case, simply illiquid.

 

[JOB]

Don't buy anything from Midland, Those crooks take the first 6% to manage your money. If your account doesn't make 6%, say it makes 4% they take that. Then next year they take 8%.
Pretend your money is a pig, once all the money that your money made is divided up all you will get is the squeal. Good luck

 

[Bonnan]

Check out the Bogleheads Forum, free advice from the followers of John Bogle the founder of Vanguard and creator of the index fund concept.. Vanguard Mutual Fund Group is the only fund organization that is NOT a for profit but is mutually owned by their own individual investors like you and me. I will be attending the Bogleheads conference this coming fall in Philly. Just great exchanging investment ideas and getting advice from trustful experts not selling anything.

 

[sflem849]

(quoted from post at 13:33:57 08/22/13)...I think that the business of financial advisers ranks down there with used car salesmen and TV evanglist shysters.

I have always thought the same thing!

 

[led]

"A fool and his money are soon parted"
Led

 

[ddl]

Read your bible

 

[guido]

Hello Steve Maine.

Your local bank should have one, either there or a roaming branch one.

Guido.