Author Topic: Has anyone used a fee based financial advisor?  (Read 1404 times)

coppertop

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Has anyone used a fee based financial advisor?
« on: January 17, 2017, 10:20:59 AM »
I am very close to retirement (not early, as I am 61) and honestly have no idea what to do with my money to get a decent return.  Am seriously considering consulting a fee-only advisor to look over what we have and give advice.  Anyone have experience with this? 

Cwadda

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Re: Has anyone used a fee based financial advisor?
« Reply #1 on: January 17, 2017, 10:39:21 AM »
Most people on this forum will say no. Or say yes but that they ditched them a while ago. A major point of MMM is to educate yourself and take control of your own money. And by doing so you will feel liberated and gradually more comfortable.

My opinion on the matter is that unless you are using a fiduciary, any financial advisor, no matter how nice they are or how successful of a track record they might have, has zero obligation to act in your best interest. I will repeat: ZERO obligation to act in your best interest.

soccerluvof4

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Re: Has anyone used a fee based financial advisor?
« Reply #2 on: January 17, 2017, 11:05:35 AM »
I use a Vanguard advisor. Its such a minimal charge and I was so confused with what to do. I feel I got a good one not based just on returns but I have no problem getting a hold of them, i set up at least 2 apts a month and hes been there 20+ years. I feel he has my best interest and because I have educated myself enough to have some sense , I feel he knows that so its working for me right now. I would go that route being its so inexpensive in comparison.

GreatLaker

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Re: Has anyone used a fee based financial advisor?
« Reply #3 on: January 17, 2017, 01:12:00 PM »
I used a fee only advisor twice. First to create a financial plan for a flat fee, about 5 years before retirement. Then again for an update a year before retirement, paid for on an hourly basis. I used the advisor for financial planning only, not investment advice. My perspective on investing is just use a 3-fund Boglehead or Vanguard portfolio.

I think fee-only advice is rare for 2 reasons. 1) It's much more lucrative for the advisors to have ongoing clients they charge a % of assets to manage investments, or to work on commissions from the investment companies. Finding enough clients to make a living from doing one-time plans is a tough gig. 2) Most people don't care or are afraid to manage their own investments. People look at me like a skunk at a wedding when I tell them I pay hourly for financial planning, but those same people are unaware how high their MERs and trailing commissions are and how much it reduces their long-term financial assets.

The benefit to me is having someone experienced to create a very detailed plan that takes into account tax rates, which accounts (taxable, tax-deferred or tax-exempt) to save in and which to withdraw from first to minimize taxes, when to take CPP (one component of Canada's social security system), avoiding OAS clawback (another component of Canada's social security system), understanding tax rates, recommendations on insurance (critical illness, long-term care etc), and generally ensuring I have not made erroneous assumptions in my own planning.

TL;DR: I used a fee only planner for planning but not investment advice. Well worthwhile for me.

Indexer

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Re: Has anyone used a fee based financial advisor?
« Reply #4 on: January 17, 2017, 06:11:57 PM »
If you have over 500k call Vanguard. You can likely get a free meeting with a Financial Advisor. They are fiduciaries, paid salary(not commissions), and I believe they are all CFPs as well.

If you get all the information you need you can go from there. If it is all too overwhelming and you like the person you are talking to they can manage the account for you. Cost is 0.3%.


While I'm a big proponent of doing it yourself the years right before and after retirement are vital. Having a professional who is either free or very low cost can help you avoid a lot of mistakes that could cost you substantially more.