So i finally used a financial advisor...

[MoonLiteNite]

I have seen several people, including myself, ask if they are worth it and if they provide value and such. So figured I would report back after our emails, talks and 2 months of working together.

I have searched for a FA before, and was basically shotdown every time i called/emailed a local one. Due to my total assets, or my goal of early FI.
On a podcast i recently started listing to, the host suggested to look on the XY planning network for an advisers. I selected 4 different people to contact. I basically was looking for low hourly fee, had a post 1998 looking website (hard to actually find!) seemed to be geared towards accumulation, and distributions strategies, as well as high tax knowledge. Also was trying to find someone who worked alone and not with a firm, but that was not a must. As far the fancy letters behind their names, i really only was looking CFP with a CPA as a bonus. To me they are just letters and shows they can pass a test, anyone can pass a test and get a degree.

- 1st guy i could tell was turned off by my idea of FI by age 40. We mutually ended the call within 10mins of talking.
- 2nd call the guy was very very honest, he wasn't a CPA and told me he was not so sure on the tax side of things. He also did not know the term "roth IRA ladder" and asked me explain it. He said he had heard of it in passing. He was willing to assist as much as he could, even give a large discount, but he said he felt we would not be a great match for "all" my needs. Even after we knew it was not a  match, he actually was curious about my setup, asked more questions, gave me some advice and even some referrals of his peers on the XY network!
- 3rd lady seemed very nice, she perked up when i told her my age and goals. She had many questions that were not part of her normal list. And was more than willing to help and i informed her i had one more caller to go through the following day. The call lasted a bit over an hour.
- 4th guy didn't call on time. An hour later i was able to get a hold of him. After a few moments of talking, he stated that he was not very familiar with the IRA ladder, and he actually mentioned the previous lady as someone who would be a better match.
(all calls were the "Free" calls before you hire them)

Emailed back the 3rd adviser and said i was willing to actually go with her "plan + retainer". The basic plan was very cheap next to all the other advisers on the site, but the retainer fee was a bit higher. I told her i would most likely end the retainer fee after 1 or 3 months; unless i felt like i was getting great value. She said she totally understands, and there is no min time to have pay the retainer fee.
Since i was no longer going with an hourly fee i let her do all the normal questions and talking rather than my direct questions. She went over EVERYTHING in great detail on things i never even thought of. One of the first topics family's life, relationships with family members, my current estate planning, or lack of. Great detail about my goals, my "ideas" on life, what i "value", what my plan was once i was FI, if i would keep working on the side. The main set of questions was about an hour long. After the main set of questions she created a google drive account. And requested that i upload several documents (she emailed a list of what documents were needed). And also requested that i put in any extra documents that i feel she may need, also to start thinking of questions and jotting them down. Once again, this call lasted just a bit over an hour, and really had no "limit". She was willing to keep talking and answering my questions or taking more input.

A month later (my request) we called over google hangouts so we could share screens and documents. She provided her first "plan" using screen share.
Basic outline of the plan was
- Savings plan - she gave me 2 thumbs up and skipped over that
- Debt reduction - Only house on a personal loan. Suggestion was to pay it off with min payments, unless i had a moral or personal reason to remove the debt.
- Risk management
   - Umbrella ins - We had talked about my current roommates, and the idea i may buy a rental home. So umbrella ins was strongly suggested, even if i do NOT buy another property. And due to the extremely cheap cost, i think i will follow her advice.
   - LLC - Even if i do not buy another home. She suggested i setup an LLC for my income from my current roommates. I will think about this but not taking any action and she said we could easily talk about it later on if needed.
   - Estate planning - I have nothing formal. She seemed very strongly on this, and suggested i just use legalzoom (no referral links) since my case is so simple, but that she feels having a verbal contract with my father and sister is not strong enough, and that my other 2 siblings could fight the issue if something where to happen.
   - Estate planning 2 - She also brought up legal issues around the title of my house and things that may happen and issues my sisters may go through depending on if the title is "joint tenancy" or "tenants in common" So once again, she is providing great value. I NEVER thought there would be any issue, i figured my sister would straight up get the house since she is also on the title, but 50% of the house would end up going through probate court depending how the title is written.
- Investment plan - Showed my current overall asset allocation, as well as what she felt would be good for me. Basically cut back on US large cap and get more mixed in with intl stocks.
   - Stated that 5%~ is an OK amount of "play money" for swing trading
   - Stated P2P lending can be treated like bond income, which she knows i am in the process of cashing out and not reinvesting anymore
   - Provided an AA list for t401k, tIRA, HSA and tax account. Verbally she answered my questions as i questioned a few of them.
   - Confirmed the IRA ladder. Also verified a question i had, r401k > rIRA if there was a 5 year wait,
   - Stated my ESPP is a good plan, provided i do not see anything major happening with my companies stock in the 1 day waiting period i have if i choose not to quick sell. Stated to generally hold at least a year before cashing out ,and then reinvesting that money into my main taxable account. Also said if i felt it was needed to cash out to go ahead and do so.

Of course during the full outline i was asking questions and getting answers. Things like "should i go ahead balance my tax account to your suggestions now and take the capital gains?" "Where should I have my "play money" at? My HSA, or tax account?", "Why are you suggesting we put REITs in a tax and tax deferred account?" And things of that sort.
The call lasted just under an hour, i had to leave early for work, but she was more than willing to call back the next day, or answer any more questions via email.
We setup a time to call again next month, and i am already jotting down a list of things to ask then. Nothing that needs to be answered now.
(also right before call ended i asked about payment, she said i would have the info in my email. Main fee was due "after" that call, and monthly retainer fee starts 31 days after)

So i went into getting a FA to just verify everything i have read online, just to have a "pro" double check all my numbers. But already i have felt she has saved me quiet a bit of money in taxes for 2017. And had i picked up a FA last year, i would have saved over 10,000$ in taxes last year. I made a HUGEEE mistake in selling ESPP at the wrong time. I have also made a HUGE mistake on buying certain non-tax friendly investments in a tax account. But we already have a way to slowly work my way out of those without taking a huge hit.

I have a feeling I may keep paying that retainer fee. The value may be wayyyyy higher than i was expecting.
Hope i kept this post short enough and hope it helps anyone on the fence about getting a FA. Any questions and i be happy to answer!

[firelight]

This is awesome! I've never heard a FA being such a good fit for someone on FIRE journey. I tried a few but almost all of them were like the first or second guy and gave up. If you don't mind, can you PM your FA's info? If she doesn't need in-person meetings and can setup everything through online interactions, I'd definitely be interested to talk to her.

[Greenback Reproduction Specialist]

Very cool, I've been interviewing different people over the last year myself. I also have found most were similar to number 1 & 2, I just didn't get a great level of confidence in their abilities and felt like I had more knowledge about certain topics than they did.

I ended up find a really awesome tax planner/preparer, I'm going to give him a shot this year and see what he can do for me. He already provided his fee in value this year by helping me avoid a late filing fee. Only problem is, he is not cheap, his experience comes at a pretty good price... So I dunno, hopefully he continues to provide really good value.

[Carless]

It sounds like you're working with her completely remotely, so it's entirely possible someone across the country could sign up with her as well.

[goalphish2002]

This is actually the type of work I would like to do- basically, what your 3rd option does for a living.  It seems that most people on this forum seem to think it isn't a viable career because most financial planners are actually salesmen.  It seems you found one that is fee-only that is not pushing products.  How can we get this person's name if we are interested in hiring them?

Maybe our forum members have a bias here...

[NCTarheel]

Awesome summary.

Thank you for spending the time to document the details..

[MDM]

And had i picked up a FA last year, i would have saved over 10,000$ in taxes last year.

Is there something you can share for others' benefit about this?  I.e., what should you have done differently?  Thanks.

[OthalaFehu]

Here is a hard/comforting? truth. After spending a lot of time on boards like this, you have outpaced many Financial advisers. By and Large, they are geared towards a different more traditional investor. My personal experience was that I walked away not thinking very highly of the profession in general. It seems to involve a lot of kickbacks for steering you towards funds they are in league with.

I like the idea of a brief paid for 'double check' on your own current path, but in terms of a long term relation, its not for me.

[boarder42]

This is the work i'd like to do.  remote/ from home.  help people with their finances and dig into all of this.  man that would be the life.  would be interested to know the company she works for.

[Scandium]

Here is a hard/comforting? truth. After spending a lot of time on boards like this, you have outpaced many Financial advisers. By and Large, they are geared towards a different more traditional investor. My personal experience was that I walked away not thinking very highly of the profession in general. It seems to involve a lot of kickbacks for steering you towards funds they are in league with.

I like the idea of a brief paid for 'double check' on your own current path, but in terms of a long term relation, its not for me.

Sounds like this is true. The lady OP talked to sounded nice and all, but from what I read didn't really contribute anything I don't already know. I don't see much value in the profession myself. I wouldn't blindly trust a stranger's opinions on my finances so then I have to research myself too, but then why am I using them anyway?

[Cwadda]

There is nothing wrong with financial advisers. There is something wrong when financial advisers try to sell you their product which comes with huge fees and sales commissions.
Great job, OP. FA carry a lot of negative stigma on here, it's good to see the other side of the coin.

[sirdoug007]

Thanks for the detailed write-up!

I'm strongly considering taking some CFP classes at a local university and exploring this world myself. 

I'm convinced an adviser in the mold of the woman you worked with could be immensely valuable to almost anyone.  Honestly, it should be fairly easy to save people many thousands of dollars/year if you can really dig into their finances and goals.

I'd also like to hear some details about the HUGE savings.  I'm guessing you took a hit on some short term capital gains on the sale of those discounted company shares.

[boarder42]

Thanks for the detailed write-up!

I'm strongly considering taking some CFP classes at a local university and exploring this world myself. 

I'm convinced an adviser in the mold of the woman you worked with could be immensely valuable to almost anyone.  Honestly, it should be fairly easy to save people many thousands of dollars/year if you can really dig into their finances and goals.

I'd also like to hear some details about the HUGE savings.  I'm guessing you took a hit on some short term capital gains on the sale of those discounted company shares.

I've been looking into this... cheapest way if you're self driven is to take the Bryant CFP course for 1995. i'm a pretty good text taker ... if its multiple choice i could probably pass it without the clases but they dont let you do that.

[Frugalman19]

 As far the fancy letters behind their names, i really only was looking CFP with a CPA as a bonus. To me they are just letters and shows they can pass a test, anyone can pass a test and get a degree.


 

This made me chuckle a little. I guess having Dr. in front of your name only means you can pass a test and get a degree too, but you better bet your ass im going to listen to them over someone who doesnt have it.

I wouldnt worry about the CPA part as much, just because someone is a CPA doesn't mean they are experts in tax. I am not a CPA, and I do alot of CPA's personal taxes because they dont understand the tax code.

[Spork]

I have seen several people, including myself, ask if they are worth it and if they provide value and such. So figured I would report back after our emails, talks and 2 months of working together.

<deleted for brevity>

Very interesting report.  Thank you.

If you don't mind me asking... how much was the consult (plan + retainer).  If you do mind... that's ok, I'm being nosy.

I'd also like to hear about the $10k tax "mistake".

[Bobberth]

I've been looking into this... cheapest way if you're self driven is to take the Bryant CFP course for 1995. i'm a pretty good text taker ... if its multiple choice i could probably pass it without the clases but they dont let you do that.

It is a multiple choice test. I bet you can't pass it though :-) It's not a normal multiple choice test. Every possible wrong answer is a choice: for a future value problem there will be the answer for beginning of period, end of period, if you forget to divide interest rate by 12, divided by 12, multiply by 12 to get number of payments, didn't multiply by 12 etc. Not only do you have to know your stuff, you have to be trained and ready to take the test. The math is the hardest part and what gets most people who challenge the test.

[boarder42]

I've been looking into this... cheapest way if you're self driven is to take the Bryant CFP course for 1995. i'm a pretty good text taker ... if its multiple choice i could probably pass it without the clases but they dont let you do that.

It is a multiple choice test. I bet you can't pass it though :-) It's not a normal multiple choice test. Every possible wrong answer is a choice: for a future value problem there will be the answer for beginning of period, end of period, if you forget to divide interest rate by 12, divided by 12, multiply by 12 to get number of payments, didn't multiply by 12 etc. Not only do you have to know your stuff, you have to be trained and ready to take the test. The math is the hardest part and what gets most people who challenge the test.

I'm a PE ... math doesnt really phase me.  Our test is the same way with pitfall answers.

[Proud Foot]

So i went into getting a FA to just verify everything i have read online, just to have a "pro" double check all my numbers. But already i have felt she has saved me quiet a bit of money in taxes for 2017. And had i picked up a FA last year, i would have saved over 10,000$ in taxes last year. I made a HUGEEE mistake in selling ESPP at the wrong time. I have also made a HUGE mistake on buying certain non-tax friendly investments in a tax account. But we already have a way to slowly work my way out of those without taking a huge hit.

Everyone keeps asking the details on the $10k tax savings you could have had.  Was there anything other than above? It sounds like you found an exceptional advisor who will be of great value to you!

[uwp]

I've been looking into this... cheapest way if you're self driven is to take the Bryant CFP course for 1995. i'm a pretty good text taker ... if its multiple choice i could probably pass it without the clases but they dont let you do that.

It is a multiple choice test. I bet you can't pass it though :-) It's not a normal multiple choice test. Every possible wrong answer is a choice: for a future value problem there will be the answer for beginning of period, end of period, if you forget to divide interest rate by 12, divided by 12, multiply by 12 to get number of payments, didn't multiply by 12 etc. Not only do you have to know your stuff, you have to be trained and ready to take the test. The math is the hardest part and what gets most people who challenge the test.

I agree that it would agree that it would be tough to drop into blind.  It covers a lot of ground that you can't just use process of elimination on multiple choice.

I've taken it (and passed it) and personally consider the hardest parts the insurance and benefits section.  Lots of rules and regulations of stuff you don't encounter often.
I thought that was much more difficult from the math.

On the topic of the thread... it's nice to see a good review of an FA.  They can be helpful to some folks, so it's nice to see a positive interaction for once on this forum.

[Frugalman19]

I've been looking into this... cheapest way if you're self driven is to take the Bryant CFP course for 1995. i'm a pretty good text taker ... if its multiple choice i could probably pass it without the clases but they dont let you do that.

It is a multiple choice test. I bet you can't pass it though :-) It's not a normal multiple choice test. Every possible wrong answer is a choice: for a future value problem there will be the answer for beginning of period, end of period, if you forget to divide interest rate by 12, divided by 12, multiply by 12 to get number of payments, didn't multiply by 12 etc. Not only do you have to know your stuff, you have to be trained and ready to take the test. The math is the hardest part and what gets most people who challenge the test.

Not to mention, math problems are only one aspect of the test. You are tested on investments, taxes, insurance, estate planning, retirement planning as well as personal financial planning. When I took it, it had a pass rate of 55% for my group, you are talking about people that have degrees in finance and have studied for 6 months. Making it a requirement that you pass the classes helps eliminate those who are just good test takers and is more of representation of how much work goes into becoming a CFP. Also, the classes are just the beginning, most people have to take a study class as well. We had a few lawyers who were taking it for the 2nd time, they gave the bar a 6 out of 10 difficulty and they gave the CFP a 9.

[MoonLiteNite]

Sorry, super busy at work last few days.... all answers go here :D
Also yes, all of the info a FA gives you, you can learn on your own and not pay for it. But not everyone can be a expert in everything. I value my time in other areas :)
i really have enjoyed learning a ton about taxes, passive investing and other stuff, and learned a lot from this board and MMM, but i can not blindly trust everything i read, and i do not have the time to go through all the legal documents, tax forms and learn everything.

And had i picked up a FA last year, i would have saved over 10,000$ in taxes last year.

Is there something you can share for others' benefit about this?  I.e., what should you have done differently?  Thanks.

I will ask if she minds if i give it out. So next call is june 11th. I will update the OP with her contact info if she gives the OK.

And had i picked up a FA last year, i would have saved over 10,000$ in taxes last year.

Is there something you can share for others' benefit about this?  I.e., what should you have done differently?  Thanks.

My biggest mistake was selling ESPP shares, prices nearly doubled and i had rather large gains. So not only did i take the huge tax hit, i also did it in a year where my income is 25% more due to extra money from work and side business. Not only that, but the reason i sold them was for another investment, which did work out good, but the tax losses basically ruined it. Another example is buying a large sum of REITs in a taxable account. Also the fact that i never got umbrella ins is also rather huge, so a huge potential help there. I never thought about getting it because i have roommates.

This is the work i'd like to do.  remote/ from home.  help people with their finances and dig into all of this.  man that would be the life.  would be interested to know the company she works for.

Possibly will give out her info at a later date, but she is on the "XY  planning network". They "verify" people before they bring them on board. I think there is another one called "paladin registry" that does something similar.

There is nothing wrong with financial advisers. There is something wrong when financial advisers try to sell you their product which comes with huge fees and sales commissions.
Great job, OP. FA carry a lot of negative stigma on here, it's good to see the other side of the coin.

That is why i posted, alot of people always say "just throw everything in S&P and call it a plan" Figured i would share what i have learned. I have thrown alot more money away at other pointless things in my life :)

Thanks for the detailed write-up!

I'm strongly considering taking some CFP classes at a local university and exploring this world myself. 

I'm convinced an adviser in the mold of the woman you worked with could be immensely valuable to almost anyone.  Honestly, it should be fairly easy to save people many thousands of dollars/year if you can really dig into their finances and goals.

I'd also like to hear some details about the HUGE savings.  I'm guessing you took a hit on some short term capital gains on the sale of those discounted company shares.

I have a feeling for MOST people on here, they couldn't help them too much, but even just a look over, you never know.
Yes huge capital gain hits and other tax mistakes, see other quotes above this one :D

 As far the fancy letters behind their names, i really only was looking CFP with a CPA as a bonus. To me they are just letters and shows they can pass a test, anyone can pass a test and get a degree.


 

This made me chuckle a little. I guess having Dr. in front of your name only means you can pass a test and get a degree too, but you better bet your ass im going to listen to them over someone who doesnt have it.

I wouldnt worry about the CPA part as much, just because someone is a CPA doesn't mean they are experts in tax. I am not a CPA, and I do alot of CPA's personal taxes because they dont understand the tax code.

Meh to each their own, I never said anything about you.
But i know for myself, I have a CCNA A+ N+ and other things behind my name, i honestly can say i would never touch a cisco router without some serious help. They just mean you passed a test, that is all they mean. Being able to do the work is what matters.

So i went into getting a FA to just verify everything i have read online, just to have a "pro" double check all my numbers. But already i have felt she has saved me quiet a bit of money in taxes for 2017. And had i picked up a FA last year, i would have saved over 10,000$ in taxes last year. I made a HUGEEE mistake in selling ESPP at the wrong time. I have also made a HUGE mistake on buying certain non-tax friendly investments in a tax account. But we already have a way to slowly work my way out of those without taking a huge hit.

Everyone keeps asking the details on the $10k tax savings you could have had.  Was there anything other than above? It sounds like you found an exceptional advisor who will be of great value to you!

capital gains taxes and other minor things from previous years. This year she explained why i should hold onto some other investments for tax reasons, as well as my ESPP and helped lay out a better plan for future ESPP income. Basically the cost of the plan already paid for itself in this case without counting an ongoing retainer fee

[NorthernBlitz]

Following. Thanks for sharing your experience, I've always wondered how beneficial fee only advisers would be.

[Dicey]

   - Estate planning - I have nothing formal. She seemed very strongly on this, and suggested i just use legalzoom (no referral links) since my case is so simple, but that she feels having a verbal contract with my father and sister is not strong enough, and that my other 2 siblings could fight the issue if something where to happen.
   - Estate planning 2 - She also brought up legal issues around the title of my house and things that may happen and issues my sisters may go through depending on if the title is "joint tenancy" or "tenants in common" So once again, she is providing great value. I NEVER thought there would be any issue, i figured my sister would straight up get the house since she is also on the title, but 50% of the house would end up going through probate court depending how the title is written.   

One thing.  I am neither confirming or denying any of this information.  But, if you're FA is not also concurrently an attorney in your state, it can be a critical error to assume that either of these two things is, or is a good substitute for, competent legal advice.

Most attorneys I know chuckle amongst themselves at legal-form download sites.  The insiders view is that when lay individuals use these sites it allows attorneys to make more money on the "back-end" than if they had just gone to the attorney and paid the fee to have the documents prepared properly in the first place.

My parents went to great effort to update their legal documents as they neared the end of their lives. The Fucking Updated Documents are such simplistic boilerplate that it's going to cost us a shit load of extra taxes. Yeah, pardon me if I mention that not all attorneys are out there doing great work. When we contacted his office, he said he keeps no records, he gives everything to his clients. Asshole.

[intellectsucks]

Great post!!! It's great to see a post that shows financial advisors aren't all money grubbing salesman ( just most).

If instead of hourly/retainer, she instead charged 1% of assets annually, would you still consider it worth it?

[Goldielocks]

Great post!!! It's great to see a post that shows financial advisors aren't all money grubbing salesman ( just most).

If instead of hourly/retainer, she instead charged 1% of assets annually, would you still consider it worth it?

OP -- Thanks for the detailed report.  I looked at XY myself, as I start up my own business, and they require a full CFP license to be listed in the directly.

intellectsucks -- the 1% of assets is a HORRIBLE business model for anyone but the FA.   Also, it should only be charged by someone who is hands-on managing your funds for you (doing the buys / sells).   I personally think this is an outdated mode and will go away within the next 10 years, except for those that have large estate plans that need family advisors.

[intellectsucks]

Great post!!! It's great to see a post that shows financial advisors aren't all money grubbing salesman ( just most).

If instead of hourly/retainer, she instead charged 1% of assets annually, would you still consider it worth it?

OP -- Thanks for the detailed report.  I looked at XY myself, as I start up my own business, and they require a full CFP license to be listed in the directly.

intellectsucks -- the 1% of assets is a HORRIBLE business model for anyone but the FA.   Also, it should only be charged by someone who is hands-on managing your funds for you (doing the buys / sells).   I personally think this is an outdated mode and will go away within the next 10 years, except for those that have large estate plans that need family advisors.

Depending on the size of the stache and the quality of advice it may or may not be. The op said that her advice would yield $10k+ in tax savings. If an advisor was managing a $1million stache the client would be breaking even. Then all the other advice regarding estate planning, LTC planning, bz structure, etc is essentially free.
If the stache was less, then the savings are even more pronounced. The amount of the retainer was not discussed.

[Goldielocks]

Great post!!! It's great to see a post that shows financial advisors aren't all money grubbing salesman ( just most).

If instead of hourly/retainer, she instead charged 1% of assets annually, would you still consider it worth it?

OP -- Thanks for the detailed report.  I looked at XY myself, as I start up my own business, and they require a full CFP license to be listed in the directly.

intellectsucks -- the 1% of assets is a HORRIBLE business model for anyone but the FA.   Also, it should only be charged by someone who is hands-on managing your funds for you (doing the buys / sells).   I personally think this is an outdated mode and will go away within the next 10 years, except for those that have large estate plans that need family advisors.

Depending on the size of the stache and the quality of advice it may or may not be. The op said that her advice would yield $10k+ in tax savings. If an advisor was managing a $1million stache the client would be breaking even. Then all the other advice regarding estate planning, LTC planning, bz structure, etc is essentially free.
If the stache was less, then the savings are even more pronounced. The amount of the retainer was not discussed.

Sorry ! I was vague.   I meant that this FA  from XY is not managing assets, just offering planning advisory, so the 1% concept is a bad idea.

Yes, the funding could pay off for a classic FA that manages assets, if you get more out of it than you are paying, for certain.  But I think that model is very open to poor management / lack of attention from the FA, so you need to find the right person.

[Fomerly known as something]

A friend of mine is a FA in the XY network.  Currently I don't use him for advise because "I'm in the shove everything you can into accounts" phase of building wealth.  If/when I decided to take the step to saying FU to my current job/or doing the RE part of FIRE I will be hiring him to check my work and help me move $ into a more diversified portfolio, mainly adding in more conservative aspects (way more bonds that my less than 5% of assets).

ETA:  My friend works on a retainer/hourly and uses low cost index funds that he assists the customer in purchasing but does not get a commission for.   

I'd also add don't eliminate "new" FAs based on their current history as an independent.  My friends website is about a year old.  He left a small firm where he has worked for years because of a change in ownership and direction in that firm.     

[Gronnie]

Great post!!! It's great to see a post that shows financial advisors aren't all money grubbing salesman ( just most).

If instead of hourly/retainer, she instead charged 1% of assets annually, would you still consider it worth it?

OP -- Thanks for the detailed report.  I looked at XY myself, as I start up my own business, and they require a full CFP license to be listed in the directly.

intellectsucks -- the 1% of assets is a HORRIBLE business model for anyone but the FA.   Also, it should only be charged by someone who is hands-on managing your funds for you (doing the buys / sells).   I personally think this is an outdated mode and will go away within the next 10 years, except for those that have large estate plans that need family advisors.

Depending on the size of the stache and the quality of advice it may or may not be. The op said that her advice would yield $10k+ in tax savings. If an advisor was managing a $1million stache the client would be breaking even. Then all the other advice regarding estate planning, LTC planning, bz structure, etc is essentially free.
If the stache was less, then the savings are even more pronounced. The amount of the retainer was not discussed.

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

[Goldielocks]

Great post!!! It's great to see a post that shows financial advisors aren't all money grubbing salesman ( just most).

If instead of hourly/retainer, she instead charged 1% of assets annually, would you still consider it worth it?

OP -- Thanks for the detailed report.  I looked at XY myself, as I start up my own business, and they require a full CFP license to be listed in the directly.

intellectsucks -- the 1% of assets is a HORRIBLE business model for anyone but the FA.   Also, it should only be charged by someone who is hands-on managing your funds for you (doing the buys / sells).   I personally think this is an outdated mode and will go away within the next 10 years, except for those that have large estate plans that need family advisors.

Depending on the size of the stache and the quality of advice it may or may not be. The op said that her advice would yield $10k+ in tax savings. If an advisor was managing a $1million stache the client would be breaking even. Then all the other advice regarding estate planning, LTC planning, bz structure, etc is essentially free.
If the stache was less, then the savings are even more pronounced. The amount of the retainer was not discussed.

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

Good thing you don't use a FA, then!

I find that it is different knowing what the information is, and then applying to one's own situation -- getting over analysis paralysis if nothing else.

[CptCool]

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

This line of thinking makes no sense. Using the same thought process you should never hire someone for tax planning or prep because it's all found by reading the IRS website. You shouldn't hire a plumber because everything can be learned from reading the contractortalk forums and youtube videos. You shouldn't take your car to a mechanic because everything can be learned from reading the car's instruction manual.

No one has the capacity to know, remember, organize, and apply every piece of knowledge in the world. Pretty much everything is easily available, but you have to pick and choose what you become an expert with

[boarder42]

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

This line of thinking makes no sense. Using the same thought process you should never hire someone for tax planning or prep because it's all found by reading the IRS website. You shouldn't hire a plumber because everything can be learned from reading the contractortalk forums and youtube videos. You shouldn't take your car to a mechanic because everything can be learned from reading the car's instruction manual.

No one has the capacity to know, remember, organize, and apply every piece of knowledge in the world. Pretty much everything is easily available, but you have to pick and choose what you become an expert with

i would say the difference is those two are some manual labor that require some for of special skill in some instances or even special tools.  to know any thing posted here one only needs an internet connection and the ROI is insane in most cases since more often than not you're paying a percent of total assets.   vs a mechanic thats going to change my oil for almost the exact same price i can do it on my own.

but around here we're all about learning and doing ourselves.  and if there is one place above all others thats worth learning yourself its finances.

[Gronnie]

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

This line of thinking makes no sense. Using the same thought process you should never hire someone for tax planning or prep because it's all found by reading the IRS website. You shouldn't hire a plumber because everything can be learned from reading the contractortalk forums and youtube videos. You shouldn't take your car to a mechanic because everything can be learned from reading the car's instruction manual.

No one has the capacity to know, remember, organize, and apply every piece of knowledge in the world. Pretty much everything is easily available, but you have to pick and choose what you become an expert with

i would say the difference is those two are some manual labor that require some for of special skill in some instances or even special tools.  to know any thing posted here one only needs an internet connection and the ROI is insane in most cases since more often than not you're paying a percent of total assets.   vs a mechanic thats going to change my oil for almost the exact same price i can do it on my own.

but around here we're all about learning and doing ourselves.  and if there is one place above all others thats worth learning yourself its finances.

Couldn't put it better myself.

[Fomerly known as something]

I personally just contacted my friend who operates as a FA on the XY network.  I have a specific financial "problem" that is going to develop over the next few months and I want someone to help me figure out the pros and cons with each and possibly bring up alternatives that I didn't think of.  FWIW my "problem" is going to have no bad answer just a variety of good answers and I will pick one based on what I feel is best for me.  I want someone to bounce the ideas off of so I feel it is well thought out and I want that person to be able to assist on technical points. 

In the past I could talk out money issues with my Mom as she was always solid on finances but she never really got past budgeting as she and my dad had a great pension system and never had to go past the basics.  This is getting into another level of investment/wealth thinking.

I'm not going to post a case study here on it either.

[CareCPA]

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

This line of thinking makes no sense. Using the same thought process you should never hire someone for tax planning or prep because it's all found by reading the IRS website. You shouldn't hire a plumber because everything can be learned from reading the contractortalk forums and youtube videos. You shouldn't take your car to a mechanic because everything can be learned from reading the car's instruction manual.

No one has the capacity to know, remember, organize, and apply every piece of knowledge in the world. Pretty much everything is easily available, but you have to pick and choose what you become an expert with

i would say the difference is those two are some manual labor that require some for of special skill in some instances or even special tools.  to know any thing posted here one only needs an internet connection and the ROI is insane in most cases since more often than not you're paying a percent of total assets.   vs a mechanic thats going to change my oil for almost the exact same price i can do it on my own.

but around here we're all about learning and doing ourselves.  and if there is one place above all others thats worth learning yourself its finances.

I think it's the exact opposite. I have Mazda3. I can look up a video of how to change the oil on that car and it will be the same for every car in that year range and trim. I'll be installing cabinets in the next couple weeks - I can find a video of how to install this specific cabinet brand, and it will be the same process no matter what house I'm putting them in.

For finances, I have some W-2s, several rental properties. a Schedule C. a kid on the way, and various investment accounts. Where can I look up someone that has the exact same income range, property cash flow, and Schedule C type and amounts to find my perfect financial plan? Keeping in mind that person needs to have the exact same goals and priorities I do?

I think it is very easy to learn the basics, but if you want to get it fine-tuned, you'll want someone who focuses just on finances. I have done tax returns for 6 years now (full time, not seasonal or side work), and I still learn new things every month. You can read a tax question on here, think it pertains to you, but if one little detail is off it isn't applicable to your situation. If you want to believe you know everything about finances, that's fine - it doesn't hurt me at all, but I think for posters (not you, specifically) to think they know everything about their finances that they need to just by reading a couple forums is pretty ignorant.

[boarder42]

OP didn't list one piece of advise that the adviser gave that I (an engineer with no formal financial training) didn't already know from reading here, at Bogleheads, and on financial blogs.

This line of thinking makes no sense. Using the same thought process you should never hire someone for tax planning or prep because it's all found by reading the IRS website. You shouldn't hire a plumber because everything can be learned from reading the contractortalk forums and youtube videos. You shouldn't take your car to a mechanic because everything can be learned from reading the car's instruction manual.

No one has the capacity to know, remember, organize, and apply every piece of knowledge in the world. Pretty much everything is easily available, but you have to pick and choose what you become an expert with

i would say the difference is those two are some manual labor that require some for of special skill in some instances or even special tools.  to know any thing posted here one only needs an internet connection and the ROI is insane in most cases since more often than not you're paying a percent of total assets.   vs a mechanic thats going to change my oil for almost the exact same price i can do it on my own.

but around here we're all about learning and doing ourselves.  and if there is one place above all others thats worth learning yourself its finances.

I think it's the exact opposite. I have Mazda3. I can look up a video of how to change the oil on that car and it will be the same for every car in that year range and trim. I'll be installing cabinets in the next couple weeks - I can find a video of how to install this specific cabinet brand, and it will be the same process no matter what house I'm putting them in.

For finances, I have some W-2s, several rental properties. a Schedule C. a kid on the way, and various investment accounts. Where can I look up someone that has the exact same income range, property cash flow, and Schedule C type and amounts to find my perfect financial plan? Keeping in mind that person needs to have the exact same goals and priorities I do?

I think it is very easy to learn the basics, but if you want to get it fine-tuned, you'll want someone who focuses just on finances. I have done tax returns for 6 years now (full time, not seasonal or side work), and I still learn new things every month. You can read a tax question on here, think it pertains to you, but if one little detail is off it isn't applicable to your situation. If you want to believe you know everything about finances, that's fine - it doesn't hurt me at all, but I think for posters (not you, specifically) to think they know everything about their finances that they need to just by reading a couple forums is pretty ignorant.

the max value of learning to install your own kitchen cabinets is about 2k per install and you're going to install how many in your life... maybe a max of 10.  the max value of your oil change on your specific car - is maybe 10 dollars saved vs having a shop do it.  and lets just say the liklihood of you owning that specific car you've watched that youtube video for is your entire life thats all you buy.  (but we all know oil changes will be a thing of the past in 15-20 years) but lets say you drive what the avg human does at 13746 miles a year for 70 years all in the same car you got 18800 in monetary value out of that assuming oil changes every 5000 miles for your life in the same car type.

value of not paying an exta .1%(<< extremely low) fee on your money to an advisor - say 1.5MM over 30 years.  = $120,000 ... i dont thing an advisor is bringing that level of insight to the table when its all pretty readily available online now and if they are they arent charging you 0.1%. 

and for the record changing your oil and installing your own kitchen cabinets should be advocated for around here.  I just think comparing them to learning finances yourself is a bad comparison in real dollars into your life.  On top of all of that you have to have found the advisor that actually knows enough to be beneficial to you and around here i think there are very few advisors who wouldnt have their brains explode at the level of knowledge people have of tax code and how to invest etc.

which was actually proven by OPs original comments. 

[CareCPA]

I don't think we're as far apart as I originally did.
Financial basics to moderate difficulty - DIY
Financial fine-tuning or complicated situation - find competent adviser, but don't pay an AUM fee. Pay a flat fee for specific advice.

Which I believe is what the OP is stating they did, and it worked for them.

[boarder42]

I don't think we're as far apart as I originally did.
Financial basics to moderate difficulty - DIY
Financial fine-tuning or complicated situation - find competent adviser, but don't pay an AUM fee. Pay a flat fee for specific advice.

Which I believe is what the OP is stating they did, and it worked for them.

i find that people on these boards are likely more helpful AND more knowledgable esp. about the ins and outs of an early retirement and what to do than what some 200 dollar an hour guy who's eyes get big when i say roth ladder is worth. combine this with boggle heads and you should be able to get all the PF advice you need to live your life.  if you're into RE probably should add bigger pockets to that and you're better off than any advisor you could pay money to IMO

[devan 11]

I haven't used an FA, but if the right person could be found, i'd invest some time and money to see what value they can bring.  I have a reasonably good tax person.  He gave some poor advice about Roth's initially but we stayed with him.  I've taught him that traditional CPA trade publications were wrong to our special niche of FIRE.  He actually gets excited to talk with me since he is a closet FIRE person too.  I am converting using a Roth ladder, also.  I use Fidelity low cost indexes, and get competent conversion-aware professionals so all rules for conversions are met.

I use the estate planning websites for an outline, figure out our best answers to how we want things handled in POA, advance health directives, wills etc, then book time with my attorney to write the wills and such.  IIRC, total bills for wife and me were a few hundred for all the documents for both of us.  We have the peace of mind knowing that someone well versed and current in state and federal law has done the work.

Our NW and income stream from that 'stache is high enough to make us juicy looking clients, I do well above average on my own. I don't feel the trust that others will care as much as I do.  I have been through market cycles, don't need or even want hand holding.  It will take a high bar to meet for me to fire myself as my advisor and hire a new person. We are currently broadly diversified with heavy weighting in emerging and health care indexes. Btcoin is a pleasant allocation too.  It's my gold-hoarder alternative.  Are there any FAs up on Btcoin?

I have written an investment plan.  My wife has less interest so this would transition her to a safe place should anything happen.  We are self insured in life insurance. We expect to leave heirs enough that they can safely FIRE should we get hit by an SUV before robo cars are marketed or some other dark specter happens. 

[Goldielocks]

I think it is very easy to learn the basics, but if you want to get it fine-tuned, you'll want someone who focuses just on finances. I have done tax returns for 6 years now (full time, not seasonal or side work), and I still learn new things every month. You can read a tax question on here, think it pertains to you, but if one little detail is off it isn't applicable to your situation. If you want to believe you know everything about finances, that's fine - it doesn't hurt me at all, but I think for posters (not you, specifically) to think they know everything about their finances that they need to just by reading a couple forums is pretty ignorant.

the max value of learning to install your own kitchen cabinets is about 2k per install and you're going to install how many in your life... maybe a max of 10.  the max value of your oil change on your specific car - is maybe 10 dollars saved vs having a shop do it.  and lets just say the liklihood of you owning that specific car you've watched that youtube video for is your entire life thats all you buy.  (but we all know oil changes will be a thing of the past in 15-20 years) but lets say you drive what the avg human does at 13746 miles a year for 70 years all in the same car you got 18800 in monetary value out of that assuming oil changes every 5000 miles for your life in the same car type.

value of not paying an exta .1%(<< extremely low) fee on your money to an advisor - say 1.5MM over 30 years.  = $120,000 ... i dont thing an advisor is bringing that level of insight to the table when its all pretty readily available online now and if they are they arent charging you 0.1%. 
...

Boarder42 -- your own posts seems to be arguing for going to see a Fee-only financial advisor, in much the same way that OP did.

As you say, your finances are worth FAR more than the kitchens / oil changes.   

Therefore paying what the OP did -- perhaps $500-$1000 dollars, one time, to potentially save a huge amount of future money by making better decisions for yourself in the future?   Awesome idea.  That is the cost of taking a class about finances, but personalized.  OP also presents like he/she knows something about finances and is self-taught, so this amount of money identified as a savings was a pleasant surprise.

Where did you get the idea that you needed to pay an annual amount to see a FA, and that there was no other way?

Off (my) point..
Most people don't have $1.5 MM for >30 years, they actually build up to it over many years, maybe getting to $1.5M at age 60, then start spending it down.  Even so 0.1% x 1.5M x 30 years is $1500 per year, ignoring compounding, about 1/3 the amount you listed.   There are arguments to be made about tax loss harvesting optimization and a FA may be more consistent about rebalancing and being consistently in the market, than you would be, and that commissions are included in their fee, etc. etc. etc..

[boarder42]

I think it is very easy to learn the basics, but if you want to get it fine-tuned, you'll want someone who focuses just on finances. I have done tax returns for 6 years now (full time, not seasonal or side work), and I still learn new things every month. You can read a tax question on here, think it pertains to you, but if one little detail is off it isn't applicable to your situation. If you want to believe you know everything about finances, that's fine - it doesn't hurt me at all, but I think for posters (not you, specifically) to think they know everything about their finances that they need to just by reading a couple forums is pretty ignorant.

the max value of learning to install your own kitchen cabinets is about 2k per install and you're going to install how many in your life... maybe a max of 10.  the max value of your oil change on your specific car - is maybe 10 dollars saved vs having a shop do it.  and lets just say the liklihood of you owning that specific car you've watched that youtube video for is your entire life thats all you buy.  (but we all know oil changes will be a thing of the past in 15-20 years) but lets say you drive what the avg human does at 13746 miles a year for 70 years all in the same car you got 18800 in monetary value out of that assuming oil changes every 5000 miles for your life in the same car type.

value of not paying an exta .1%(<< extremely low) fee on your money to an advisor - say 1.5MM over 30 years.  = $120,000 ... i dont thing an advisor is bringing that level of insight to the table when its all pretty readily available online now and if they are they arent charging you 0.1%. 
...

Boarder42 -- your own posts seems to be arguing for going to see a Fee-only financial advisor, in much the same way that OP did.

As you say, your finances are worth FAR more than the kitchens / oil changes.   

Therefore paying what the OP did -- perhaps $500-$1000 dollars, one time, to potentially save a huge amount of future money by making better decisions for yourself in the future?   Awesome idea.  That is the cost of taking a class about finances, but personalized.  OP also presents like he/she knows something about finances and is self-taught, so this amount of money identified as a savings was a pleasant surprise.

Where did you get the idea that you needed to pay an annual amount to see a FA, and that there was no other way?

Off (my) point..
Most people don't have $1.5 MM for >30 years, they actually build up to it over many years, maybe getting to $1.5M at age 60, then start spending it down.  Even so 0.1% x 1.5M x 30 years is $1500 per year, ignoring compounding, about 1/3 the amount you listed.   There are arguments to be made about tax loss harvesting optimization and a FA may be more consistent about rebalancing and being consistently in the market, than you would be, and that commissions are included in their fee, etc. etc. etc..

your math is severly incorrect again.  b/c you're ignoring compounding on mulltiple levels.  and around here many people will get to that number far before age 60 and have far more time than 30 years and .1% is incredibly low.  to get what you're talking about even with an auto bot doing it for you and not an advisor is .25% (betterment) 

i'm pretty sure even MMMs experiment in betterment he found not really worth it.

[boarder42]

still OP could have just laid the question out here and gotten better answers faster ... why someone with letters after there name is necessary for some is way beyond my ability to understand.

[Slee_stack]

Admittedly, I have a big peeve with credentialism.

No, letters don't mean much at all.  Even the ones that come before your name. 

Sadly, I have my own sets of letters and I would laugh my ass off if someone presumed I was BETTER just because they are there.  The only reason I have them is because clueless people will pay more for the PERCEPTION of skill.

I don't need to have personally stepped on the Moon to be knowledgeable about it.  A credentialist will rake you over the coals if you haven't though.

That said, there is knowledge and skill that just isn't enjoyable to learn or practice.  As long as someone is OK with the 'cost' of not knowing how to do something (or do something to perfection), there's nothing wrong with paying someone else to help out.