Financia Advisors good/bad
- Thread starter Smoaky
- Start date
Lethe200
Senior Member
- Location
- San Francisco Bay Area
Agree with C50 - you DO NOT need to have a lot of money. As I pointed out, it is the middle-class who would most benefit from a good fiduciary CFP, but most CFPs do have a minimum for portfolio assets (NOT the same as net worth) because the $200K portfolio is just as time-consuming to manage as the $2M portfolio.
If you have been talking to "advisors" who are just 'whole life insurance salespeople', then I doubt they are truly professional fiduciary CFPs. And good ones in that class are even harder to find, unless you get a personal referral to one. The top independent CFPs do little or no "hard" advertising; they prefer to get their business from personal and professional referrals.
Saving and investing are VERY different than distributions and resultant tax issues. I enjoy the first two but have zero interest in managing the last two items. I did very well on our self-directed investing, but our CFP firm has done a level better than I could have on distributions and taxes, while continuing to grow our portfolio. In fact, net of fees, if we had not taken distributions the firm would have more than doubled our portfolio assets in less than 13 years. It's still larger than the original balance we transferred, by a sizable margin.
But yes, I do think MOST people, if they are willing to spend some time and effort, can learn the fundamental knowledge and do some of their own financial planning.
Just remember than financial planning is not just your savings. It is also your family situation, your personal insurance needs (including old age), your estimated longevity, your goals, your risk tolerance, general inflation - and most importantly, your expectations vs reality of old age/disability.
Lethe200
Senior Member
- Location
- San Francisco Bay Area
You might as well as why there are 80-year olds who keep on working even though they are long past retirement age. The answer is because they enjoy what they do, just as SunnySmiles' friend enjoys doing it as a hobby. Helping people manage money is important and useful work, because finances are much more complex now than when the previous generation grew up.
No competent fiduciary CFP would try to sell you something you don't need. They can be sued for doing so, they are legally liable for the advice they give.
I try to help my friends whenever they ask. A few years ago we began giving Zelle payments to my nephew's kids, which accelerated when the IRS changed the rules so that excess funds in 529s can now be turned into a retirement account. They're not going to inherit anything from us, so we figured giving them some $$$ now which can be used either for education or retirement - both important, obviously - was the way to go. Our CFPs agreed, just as they did when we freed up a modest amount of the equity from our house when the mortgage rate dropped to 2.75%.
Financial advisors can do the legwork on researching funds and allocating portfolio assets in accordance with the client's pre-approved risk preferences. If we want to change to a riskier portfolio or vice versa, that is our decision, and they are happy to discuss it. But they always need our approval to DO it.
No CFP should ever ask you for blanket authorization, nor to send any amounts for investing written to their company name. EVER. That is how Bernie Madoff caught so many people - they simply did not know that the advisor directs the funds, s/he NEVER has possession of them. Those funds are always to be directed to, and held by a bank or brokerage that has legal authority/responsibility for handling actual monies.
My father was a financial advisor and was glued to the "ticker tape" on the TV even after he retired. He would call HIS financial advisor regularly after he retired and give him advice on his own investments. He loved it, he lived it, he breathed it. It wasn't a matter of having/not having the money.
Why is Bill Gates still working? Why is Elon Musk still working? Why is Tim Cook still working?
I am a retired accountant and served as the CFO in the corporate setting for nearly 30 years. I have carefully managed our financial affairs over the years. I also use a financial manager who is a fiduciary, meaning he is licensed and adheres to a strict standard of ethics with liability for certain types of failure in his services. Although I experienced in financial management I use the same as legal representation. One who solely represents himself has a fool for a client. That does not mean that I am not involved in managing our finances, but I seek impartial advice.