Author Topic: Work Place Financial Advisor: What to expect?  (Read 4296 times)

FarmFam

  • 5 O'Clock Shadow
  • *
  • Posts: 63
Work Place Financial Advisor: What to expect?
« on: January 06, 2015, 07:15:28 AM »
I am meeting with my work place's financial adviser today.  It is free and the company handles our 401k.  I was wondering what I should expect from meeting with him, what I should bring with me, any good questions I should ask and is there anything else I should know before meeting with him?  I am clueless of what to expect, so any information would be great.

I did search the forum first but didn't find anything that I found would be useful in this situation as it is not a paid adviser.

Thanks so much!

GoldenStache

  • Stubble
  • **
  • Posts: 239
  • Location: Washington, DC
Re: Work Place Financial Advisor: What to expect?
« Reply #1 on: January 06, 2015, 07:34:03 AM »
He is a paid adviser, remember that.  Ask him about fees. 

GardenFun

  • Bristles
  • ***
  • Posts: 459
  • Location: Packers Hell - they're everywhere!
Re: Work Place Financial Advisor: What to expect?
« Reply #2 on: January 06, 2015, 08:03:26 AM »
Sit back and listen.  Remember what the person told you, then post the information here.  Here's how these conversations typically go:

- Let's log into your account (do you have your log in info?  Also, they want to get into your account so they can make changes immediately.  Do not let them make any changes.  You make your own changes once you have done your research and are comfortable with the choices)
- You have XX dollars in your account.
- If you increase your deposits, you could have XX by retirement (Question #1 - find out what rate of return they quote.)
- For your age, your accounts should be diversified like this (Write down their diversification breakdown).
- For this diversification, I suggest you investing in these funds.....

As GoldenStache said, this last statement is important.  If you have low cost options in the 401k, did the advisor point you in that direction, or did you get immediately pushed toward higher-fee funds?  If it is the latter, question why. 

Also, find out the fee being assessed on your 401k by the investment firm.  This is an additional cost on top of the fund expense ratios. 

Roots&Wings

  • Handlebar Stache
  • *****
  • Posts: 1125
Re: Work Place Financial Advisor: What to expect?
« Reply #3 on: January 06, 2015, 10:27:00 AM »
I met with my work's financial adviser a couple week ago (a free service).  Their obligation is to provide each employee with a financial plan.  They cannot sell us products per their contract with my employer. 

My interest was discussing retirement savings and financial independence goals.  I came prepared with current account values, savings projections, and expenses. 

Had some research tasks post-call (like running estimated healthcare costs using the government's exchange site when I'm FIRE and getting my Social Security benefit estimate).

The adviser sent a final report showing my financial plan and estimated financial independence age based on the variables discussed, and provided a few recommendations.  I found it a worthwhile exercise. 

FarmFam

  • 5 O'Clock Shadow
  • *
  • Posts: 63
Re: Work Place Financial Advisor: What to expect?
« Reply #4 on: March 17, 2015, 01:19:56 PM »
Thanks for all the suggestions and feedback.  I wanted to come back and let you know how it all went.

I went in prepared with my information and questions. I also had several options of a plan that I asked him about.

It took a whole hour but we never got to the fee part of it.  He did suggest that I stick with the Vangard fund that is based on my age.

He suggested that I also max out my 401k.  But I told him that I wanted to pay off my student loans and mortgage first, as well as my current debt.  I then told him that I wanted to create a "broken fund" and an emergency fund to not get into debt again.

He suggested that I don't pay off my student loans or mortgage and instead max out the 401k.  He then said for the other stuff to prioritize it and put some money in each depending on my prioritization.  For example, if debts is high priority put $400 per month, and if "broken fund" is low put $10 per month, but at least this way each is getting funded and later the money can shift when the debts are paid.

I don't know about holding off the student loans and the mortgage.  I know there are mixed suggestions on this forum about it, but I will "feel" much better knowing that both were paid off.

But after this, it looks like the earliest I can retire is between 55-60.  I don't like this!  I want to travel while I still have energy, not when I am old (no disrespect for those of you over 55).

I ran the numbers using rental property as an option for retirement income as well as 401k, but no way that I run it can I retire earlier unless both of us start making double our income now.

But even with the set backs we have had, I decided I am going to just continue to contribute the minimum to 401k to get the match and continue to pay all we can towards our debts so that we can refinance the house.  After that, I don't know what to do, but at that time I will come here and update my case study for more advice.

I think for now, just focus on the short-term goal so I don't get overwhelmed; pay the cc and cars.

TN_Steve

  • Bristles
  • ***
  • Posts: 257
  • Age: 59
  • Location: fly-over country
Re: Work Place Financial Advisor: What to expect?
« Reply #5 on: March 17, 2015, 01:52:39 PM »
...

But after this, it looks like the earliest I can retire is between 55-60.  I don't like this!  I want to travel while I still have energy, not when I am old (no disrespect for those of you over 55).

....

Hey, I resemble that remark!  :-) Knock on wood, DW and I have not experienced any issues that will affect adventure travel and diving when we finally quit in the next 2-3 years  (Too many years of school, and too many private college bills for our kids!)  BUT, in your position, you are correct to not plan/count on it.  You never know what life holds, even if you are diligent in your conditioning and diet.  So keep on striving to cut years off your plan--retiring younger is good on many levels.

libertarian4321

  • Handlebar Stache
  • *****
  • Posts: 1372
Re: Work Place Financial Advisor: What to expect?
« Reply #6 on: March 18, 2015, 01:35:26 AM »
It will be a SALES PITCH.

That said, there might be some useful information, so if they are buying lunch, it's worth it to attend (at least you'll get the free lunch).


I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8011
  • Location: United States
Re: Work Place Financial Advisor: What to expect?
« Reply #7 on: March 18, 2015, 07:03:19 AM »
It will be a SALES PITCH.


Usually the 1:1 meetings aren't a sales pitch.

The meetings I've had have been much like GardenFun described.  The advisor explained to me how I could see the expense ratios of each fund, and what they mean to me.  He also suggested my investing was too conservative for my age, but helped me see some ways I could have a more aggressive portfolio without assuming TOO much risk.  He also helped me see that cash sitting in the bank wasn't a great idea, and laid out some ideas about taxable-accounts vs. more money in non-taxable ones.  It wasn't hugely enlightening, but I did learn more about taxable accounts and actually managing my money instead of just throwing it in the 403b and letting it do whatever.

The reps we work with are paid on salary, not commission. They say this is good because they don't have any incentive to steer people to specific funds. I can see that argument, but I can also see the negative- they get paid regardless of how the investments perform...

morning owl

  • Stubble
  • **
  • Posts: 231
  • Location: Canada
Re: Work Place Financial Advisor: What to expect?
« Reply #8 on: March 18, 2015, 07:12:28 AM »
I enjoyed reading Dr. Doom's description of a meeting like that --

http://livingafi.com/2015/01/27/a-date-with-fidelity/

Quote
But after this, it looks like the earliest I can retire is between 55-60.  I don't like this!  I want to travel while I still have energy, not when I am old (no disrespect for those of you over 55).

It's amazing what people over 50 are capable of these days. ;) Every time I travel, most of my fellow travellers are well over 60 or 70 and are out there hiking the trails with the rest of us. If you stay fit and active when you're young, you're more likely to still be fit and active at 70!

Jack

  • Magnum Stache
  • ******
  • Posts: 4734
  • Location: Atlanta, GA
Re: Work Place Financial Advisor: What to expect?
« Reply #9 on: March 18, 2015, 07:15:53 AM »
If you read this site a lot, expect to know more about investing than the adviser does.

nereo

  • Senior Mustachian
  • ********
  • Posts: 11002
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Work Place Financial Advisor: What to expect?
« Reply #10 on: March 18, 2015, 07:37:47 AM »
  He did suggest that I stick with the Vangard fund that is based on my age.

He suggested that I also max out my 401k.  But I told him that I wanted to pay off my student loans and mortgage first, as well as my current debt. ...

He suggested that I don't pay off my student loans or mortgage and instead max out the 401k.  He then said for the other stuff to prioritize it and put some money in each depending on my prioritization. 

But...I decided I am going to just continue to contribute the minimum to 401k to get the match and continue to pay all we can towards our debts so that we can refinance the house. 

I think for now, just focus on the short-term goal so I don't get overwhelmed; pay the cc and cars.
From everything you've said it sounds like this financial advisor was giving you decent advice.  Maxing out your 401(k) is a great thing to do when your stated goal is retirement.  I also hope you are contributing to your tIRAs.
You seem dedicated to canceling out your student loans as quickly as possible, and that's fine.  But it may be the sub-optimal approach in the long run.  Since you've decided on that course, as soon as your loans are reduced/gone and you have refinanced your home, I'd strongly recommend funding your IRAs and maxing out your 401(k).  Feel free to post an updated case-study when the time comes.

Miss Prim

  • Bristles
  • ***
  • Posts: 370
  • Location: Michigan
Re: Work Place Financial Advisor: What to expect?
« Reply #11 on: March 20, 2015, 04:21:37 PM »
You are really lucky that your advisor knew anything at all.  When our company brought in Valic, I had an appointment with the advisor.  He was fresh out of school (don't even know what he majored in, it sure wasn't finance) and I knew more than he did!  He was just parroting what his employers were telling him to tell everyone.  He recommended the same funds to everyone!  I picked what I wanted based on the research that I had done on Morningstar.  Later on, I wanted to change my deductions, before you could do them online, and he didn't even bother to put in my paperwork!

Unfortunately, he is STILL here!  I still do not consult him on anything.               Miss Prim