Author Topic: Sibling hires financial advisor rant  (Read 4526 times)

SimpleSpartan

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Sibling hires financial advisor rant
« on: January 23, 2017, 01:34:28 PM »
Let me know if I'm out of line here.
I just cant believe that my sister and her spouse who each attended college (one stem one humanities) for FOUR YEARS were not able to create a vanguard account and spend what a month? tops learning simple index investing. I have already broached them on what they should do, but ofc I'm the younger one here shouldn't be telling them what to do. Their obsessed with dave ramsey finally getting their 40k+ student loan debt out of the way at 28 and now want to buy another car.  Typing this makes me realize I should let them do them and worry about my self, but I am disgusted in what they'll be paying in fees. After reading MMM its so simple that seeing other people hire FAs is incomprehensible.
Sorry for the rant,
SimpleSpartan

SuperMex

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Re: Sibling hires financial advisor rant
« Reply #1 on: January 23, 2017, 02:13:09 PM »
Most people will never listen to advice they are incapable of delayed gratification.

For some unknown reason the opinion of family rarely carries the same weight as others of the same education or title.

As an example my wife was my fathers doctor and after we were married he stopped listening to her health advice. Same for most of her family they have to go see another doctor to tell them what she tells them for free.

SimpleSpartan

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Re: Sibling hires financial advisor rant
« Reply #2 on: January 23, 2017, 02:28:44 PM »
Most people will never listen to advice they are incapable of delayed gratification.

For some unknown reason the opinion of family rarely carries the same weight as others of the same education or title.

As an example my wife was my fathers doctor and after we were married he stopped listening to her health advice. Same for most of her family they have to go see another doctor to tell them what she tells them for free.
It is very odd indeed, you think we would trust our families opinions more so than educated strangers, but that is not the case in our society when it comes to these things unfortunately.

Indexer

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Re: Sibling hires financial advisor rant
« Reply #3 on: January 24, 2017, 02:20:05 AM »
Hiring a FA is not the end of the world.

Hiring the wrong FA can be very bad for your wealth. Basically anyone who counts as a broker, not a fiduciary, charges more than 0.5%, works at Edward Jones/Raymond James/Wells Fargo/Merrill/etc. would qualify. 

I wouldn't count low cost investment advisors in that group. Some of them cost slightly more than Betterment(Vanguard is 0.3 or even free with assets). You probably don't need one. I don't need one. Most of the people on this forum don't need one. Some people are better off with one, especially if it helps them avoid big mistakes(like hiring a bad FA).

Some people also don't like to talk to family about money. My father has one of the 'bad FAs.' I take that back, WORST FAs, the type who charge 5% commissions and think they are experts because they have the minimum requirements to sell a stock. (Many years ago I was a FA.) Without prying I've pointed out there are better options, but he doesn't want to talk about it. A year ago he really liked one of the Schwab commercials. I told him if he liked them it wouldn't hurt to talk to Schwab. I would rather him not have an advisor, just listen to me or learn for himself, BUT given the alternative I would love for him to have a lower cost advisor at Schwab.

Now that I think about it, no direct blood relatives talk to me about money. The only family members I have who come to me for advice are the spouses of family members.

Metric Mouse

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Re: Sibling hires financial advisor rant
« Reply #4 on: January 24, 2017, 02:28:26 AM »
It is very odd indeed, you think we would trust our families opinions more so than educated strangers, but that is not the case in our society when it comes to these things unfortunately.

Why would this be the case? My family is very intelligent, and I trust them immensely: that doesn't mean there are not things that I would hire an 'educated stranger' to do or assist me with.

prognastat

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Re: Sibling hires financial advisor rant
« Reply #5 on: January 24, 2017, 09:19:42 AM »
Let me know if I'm out of line here.
I just cant believe that my sister and her spouse who each attended college (one stem one humanities) for FOUR YEARS were not able to create a vanguard account and spend what a month? tops learning simple index investing. I have already broached them on what they should do, but ofc I'm the younger one here shouldn't be telling them what to do. Their obsessed with dave ramsey finally getting their 40k+ student loan debt out of the way at 28 and now want to buy another car.  Typing this makes me realize I should let them do them and worry about my self, but I am disgusted in what they'll be paying in fees. After reading MMM its so simple that seeing other people hire FAs is incomprehensible.
Sorry for the rant,
SimpleSpartan

Depending on what kind of people they are I would possibly be happy if they are at least following Dave Ramsey's program.

I would never follow Dave Ramsey's program myself since to me the idea of cutting a little bit now and spending much more later all the while working until full retirement age has little to no appeal to me and I was saving more than recommended even before I found out about FI/FIRE/MMM. However I do understand it's value to people who are quite the opposite of me and to who financial matters and saving has never come natural while getting in to large amounts of debt instead. I believe this so much that I actually went and gifted Dave Ramsey's course to my SIL despite not feeling his advice is even close to the best advice for me. This is after me and my wife trying to help/convince her ourselves for years to no effect.

oldladystache

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Re: Sibling hires financial advisor rant
« Reply #6 on: January 24, 2017, 09:26:31 AM »
Mark 6:4 New King James Version (NKJV)

But Jesus said to them, A prophet is not without honor except in his own country, among his own relatives, and in his own house.

Spork

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Re: Sibling hires financial advisor rant
« Reply #7 on: January 24, 2017, 09:38:58 AM »
My advice to the OP:  Get used to it.  It doesn't mean they don't value your opinion.  It doesn't mean they're dumb.  It's just a silly hurdle they somehow can't get over.

I have family members just like this.  We have the same discussions over and over...  "I should really get rid of Merrill Lynch ... especially after seeing that article you showed me of how it will cost me $500k over my lifetime."  "I should really sit down and do my own taxes this year, do you think TurboTax/Taxact/H&RBlock software will handle it?"  etc.

The thing is your sister (and mine) are probably frustrated with you (and me) for something silly you are/I am ignoring that she is saying.

JustGettingStarted1980

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Re: Sibling hires financial advisor rant
« Reply #8 on: January 24, 2017, 10:01:17 AM »
Mark 6:4 New King James Version (NKJV)

But Jesus said to them, A prophet is not without honor except in his own country, among his own relatives, and in his own house.

Very similar saying, "Saints perform no miracles at home"

mskyle

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Re: Sibling hires financial advisor rant
« Reply #9 on: January 24, 2017, 10:19:53 AM »
My advice to the OP:  Get used to it.  It doesn't mean they don't value your opinion.  It doesn't mean they're dumb.  It's just a silly hurdle they somehow can't get over.

I have family members just like this.  We have the same discussions over and over...  "I should really get rid of Merrill Lynch ... especially after seeing that article you showed me of how it will cost me $500k over my lifetime."  "I should really sit down and do my own taxes this year, do you think TurboTax/Taxact/H&RBlock software will handle it?"  etc.

The thing is your sister (and mine) are probably frustrated with you (and me) for something silly you are/I am ignoring that she is saying.

Yup. I argued with my dad about his financial advisor on multiple occasions. It generally went like this:

Me: Unless you think this guy can beat the market, I don't know why you think he's worth the money.
Dad: I don't think he can beat the market, I just think if the market goes down I won't lose as much money with this guy.
Me: That is literally the definition of beating the market!
Sister and Brother-in-law: [AWKWARD SILENCE]

Anyway, his portfolio significantly underperformed (actually lost money over the last 10 years or so, yeesh), he stopped using the advisor, and he told me I was right. Neither of us was particularly happy about me being right and him being wrong, but what can you do?

People are nervous about money and they want someone else to make the decisions for them so they know they're not doing something "dumb." I think that's the main benefit most people get from their FAs - reassurance. (Expensive effing reassurance!)

Spork

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Re: Sibling hires financial advisor rant
« Reply #10 on: January 24, 2017, 11:37:39 AM »
My advice to the OP:  Get used to it.  It doesn't mean they don't value your opinion.  It doesn't mean they're dumb.  It's just a silly hurdle they somehow can't get over.

I have family members just like this.  We have the same discussions over and over...  "I should really get rid of Merrill Lynch ... especially after seeing that article you showed me of how it will cost me $500k over my lifetime."  "I should really sit down and do my own taxes this year, do you think TurboTax/Taxact/H&RBlock software will handle it?"  etc.

The thing is your sister (and mine) are probably frustrated with you (and me) for something silly you are/I am ignoring that she is saying.

Yup. I argued with my dad about his financial advisor on multiple occasions. It generally went like this:

Me: Unless you think this guy can beat the market, I don't know why you think he's worth the money.
Dad: I don't think he can beat the market, I just think if the market goes down I won't lose as much money with this guy.
Me: That is literally the definition of beating the market!
Sister and Brother-in-law: [AWKWARD SILENCE]

Anyway, his portfolio significantly underperformed (actually lost money over the last 10 years or so, yeesh), he stopped using the advisor, and he told me I was right. Neither of us was particularly happy about me being right and him being wrong, but what can you do?

People are nervous about money and they want someone else to make the decisions for them so they know they're not doing something "dumb." I think that's the main benefit most people get from their FAs - reassurance. (Expensive effing reassurance!)

The bolded part, I think, pretty much hits the nail on the head.  They want a guarantee (but a FA will explicitly tell you they're not giving you one.)

Guide2003

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Re: Sibling hires financial advisor rant
« Reply #11 on: January 24, 2017, 01:28:24 PM »
As the oldest of four siblings, and the only one for whom personal finance is a hobby, I try to send them subtle "news articles" that reinforce passive, index investing in order to alert them that a) there is such thing as an investing style and b) I've picked one I think is the best and if they have questions about it I'm probably happy to talk about it. Kind of like getting people to start saving money, picking an investment style is a personal decision that has to be made with the right internal motivation.

Ironically, its my parents (who tried to push their FA on me) who are the first to move money to something I suggested. Its not much, but at least its a start. If only I can get them to actually read the articles and books I send them. But hey, until I stumbled on MMM in a fortuitously frugal moment, I was content spending most of my paycheck every month too.

darknight

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Re: Sibling hires financial advisor rant
« Reply #12 on: January 24, 2017, 04:29:17 PM »
Mark 6:4 New King James Version (NKJV)

But Jesus said to them, A prophet is not without honor except in his own country, among his own relatives, and in his own house.

Very similar saying, "Saints perform no miracles at home"

Yep.. Exact verse I was thinking. SimpleSpartan, it is just something you need to tell them with your actions. This is what I've realized in my family too.. You just have to show them that you know what you're doing with a much better lifestyle. Some people are happy in the "matrix" and don't care to realize too.. sometimes we just have to accept that

SimpleSpartan

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Re: Sibling hires financial advisor rant
« Reply #13 on: January 24, 2017, 07:10:29 PM »
Thanks for the help everyone. Some really good advice, I'll let my actions do the talking and hopefully when I hit FI they'll start asking questions and we can go from there ;)

jessicat

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Re: Sibling hires financial advisor rant
« Reply #14 on: January 25, 2017, 08:26:28 AM »
I am a huge Dave Ramsey fan.  He helped me and my dh to get on an awesome path financially.  Your family doing that has made them far better off than the majority of people.  You are probably in the top 1% and doing awesome with your finances and your family is probably 90-95% better than the average person.  They could be like me.  After 10 years they will be looking for more and will come here.  I am grateful to Dave and the huge boost he gave our family.  It did change things for us and it will change things for them.  Just have some patience.  If they stick with what they are doing they will eventually come to you.  Especially if you are being a cheerleader about them being out of debt and doing better with their finances.  After 10 years one of my brothers was finally ready to do Dave Ramsey.  I figure in 10 years maybe he will join me here.

We have never used an adviser.  We are both tightwads and didn't want to pay the fees.

liberteEgalite

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Re: Sibling hires financial advisor rant
« Reply #15 on: January 25, 2017, 09:47:13 AM »
The part I want to offer sympathy for is the part where they're going to buy another car.

Hopefully they're at least doing it in a Ramsey-compliant way.

MichaelB

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Re: Sibling hires financial advisor rant
« Reply #16 on: January 25, 2017, 10:26:16 AM »
It is very odd indeed, you think we would trust our families opinions more so than educated strangers, but that is not the case in our society when it comes to these things unfortunately.

But as we're complaining in this very thread (and innumerable examples elsewhere in this forum), sometimes family members are idiots. As an advisor, I spoke with the son of a client (with POA) whose 80-something year old mother was in a nursing home. She had about $40k in a fixed annuity, out of surrender, and very little else. Low interest rate, but better than a savings account or bank CD, and no market risk. He wanted to yank the funds out (a taxable event) and invest them in individual stocks. When I expressed my concerns about safety and the need for an elderly client to be more conservative, he insisted that the stocks were really safe--they were great companies, always hit their numbers, etc. He wasn't malicious, just an idiot. Unsurprisingly, we did not proceed with opening an account so he could trade his infirm mother's life savings.

And sometimes, even smart people get stupid when it comes to their own family members. It's easy to be dispassionate when it's someone else's situation, but it can be very hard when it's your own family, with all the emotions and fraught personal history that can come with that.

Acorns

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Re: Sibling hires financial advisor rant
« Reply #17 on: January 25, 2017, 03:24:23 PM »
My mom is so proud of having a FA, she also chooses to buy stocks of individual companies because of their emotional appeal. Ultimately I am glad she has SOMEBODY advising her because she would be broke without someone holding her back, and I really dont want to take on that role.

chesebert

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Re: Sibling hires financial advisor rant
« Reply #18 on: January 25, 2017, 03:47:42 PM »
FA is not the end of the world. My FA helps me review and balance my portfolio across multiple accounts (including accounts I manage through Vanguard and elsewhere). I find that valuable, among other things, such as ability to use institutional managers to manage individual stock portfolio. FA fees are tax deductible.

A habit of buying new cars regularly is probably more detrimental to finances than FA.

MoonLiteNite

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Re: Sibling hires financial advisor rant
« Reply #19 on: January 28, 2017, 02:59:06 AM »
I am going to have a meeting with a FA next week.
I want someone other than MMM forum and reddit tell me my plan will work, and point out anything i am looking over.

I rather spend 200$ now and save 10,000$ over the next few years.

WallStreetPhysician

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Re: Sibling hires financial advisor rant
« Reply #20 on: January 28, 2017, 03:49:29 AM »
Since they listen to Dave Ramsey, would they be willing to go to MMM? They may not listen to you, but they might listen to a finance authority.

Metric Mouse

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Re: Sibling hires financial advisor rant
« Reply #21 on: January 28, 2017, 06:22:49 PM »
I am going to have a meeting with a FA next week.
I want someone other than MMM forum and reddit tell me my plan will work, and point out anything i am looking over.

I rather spend 200$ now and save 10,000$ over the next few years.

Absolutely. I think the standard advice even on this forum is that meeting with an FA, with a flat fee for the session, is sometimes appropriate and often can even be helpful. But hiring one on an on-going basis to manage one's portfolio in hopes of higher returns is generally considered a poor choice.