Author Topic: I am NOT hiring that financial advisor -- WWMMMD?  (Read 900 times)

dpfromva

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I am NOT hiring that financial advisor -- WWMMMD?
« on: December 07, 2022, 12:21:11 PM »
I'm happily retired with sufficient to get by on. I went to a financial advisor seminar for fun/info, and I liked the advisor's approach. They're a fee-based fiduciary, with funds held by third party, all to the good and aboveboard. After several meetings, I've told them "thanks but no thanks."

Do you agree? My major interests were retirement fund investment advice (including timing of back door Roth rollovers), estate planning, and maybe starting a small charity with a limited business lifespan, not because that's necessarily efficient, but because it would be a fun retirement "job" for me, a learning experience, and I've got an idea about a need I don't really see being addressed.

1. The model plan for the Roth rollovers was based on paying taxes on the withdrawals from the traditional retirement accounts with a potential inheritance I had mentioned. I don't think it's ever a good idea to count chickens before they hatch.

2. The advisor proposed moving my accounts into 3 SMAs that weren't quite in sych with the model results, rather seemed to be funds where they had contacts. Big fee increase over my current plain vanilla (Vanguard, Schwab, etc.) plus of course their 1% advisory fee. One of selling points was tax loss harvesting available in an SMA, but to their credit the advisor also pointed out the vast majority of my funds are in retirement accounts, so that's not relevant.

3. One of the funds was an aggressive high growth vehicle that does not consider value investing and portfolio balancing. It is entirely based on a proprietary formula that purports to time the market with a leading indicator number, to move funds to 100% invested, 50% cash & 50% invested, or 100% cash. It was implied if not directly stated that this fund consistently beat the market. "The other funds will let you keep your money. This fund will grow your money long term." It's been in existence 5 years. My view is that magic formulas, no matter how sophisticated or statistically impressive, are not reliable. First, there are many smart investors who would be able to figure out similar magic formulas, make buy and sell decisions, and the market would adjust over time. Secondly, all formulas are based on past data and can be completely blown up by an unforeseen future event. The advisor then came up with a different fund manager more to my preference. But . . .

4. I offered the advisor control over 50% of my assets, to see how we get along and what the results are for a year or two. No, they had to manage everything to account for the nuances of rollovers and tax implications. I'm not buying a pair of shoes here! This is my entire net worth. Also, they are a solo practitioner who is in early stages of building a client base. Nothing personal, but that means fewer internal checks and balances on their actions. And they didn't have succession/contingency plans in the event of business dissolution when I asked about that.

The estate trust set up was included in the initial plan fee, so I'm fine with the value I got for my $.


JAYSLOL

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Re: I am NOT hiring that financial advisor -- WWMMMD?
« Reply #1 on: December 07, 2022, 10:43:27 PM »
Yeah I wouldn’t go with them either.  Pay advisors to advise, not to manage. 


Metalcat

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Re: I am NOT hiring that financial advisor -- WWMMMD?
« Reply #2 on: December 08, 2022, 06:49:17 AM »
I'm not sure why exactly you were considering giving this person even half of your money??

I read through your whole post and didn't really see what the benefit was supposed to be for you relative to the cost??