Experience with financial planners/advisors?

[liamthompson]

Not sure if this is the right place for this question...does anyone here have a financial planner or advisor and willing to share their experiences?

I've been reviewing my family's finances and finally admit I'm out of my depth...and probably have been for a couple years now, ha. I'm not sure what type of person/company to hire. I want to make sure I've allocated things in a tax-advantaged way and we also have several random accounts from various points in our lives and I want to consolidate/make sure we're working toward the same goal. I also would like someone to help with estate planning/will/power of attorney.

I feel quite lost and any advice is appreciated.

 

[glocon]

I found my financial advisor when I went to a free workshop at my library.
I went to a few different workshops and liked this person the best.
We did have a free consultation office visit to discuss what he could do for me before I decided.
Maybe go to some free seminars and get a feel for different people.
Also, make sure your financial advisor is a fiduciary who puts your interests first.

 

[Sleepy425]

When I was 21 and didn't know any better I started using one for my Roth IRA, then when I had kids I set up their 529s with him. I got wise about 5 years ago and realized I was paying him good money for something I can do alone. I switched all of my accounts. When I get to the point where I feel I need one, it will be a fee based fiduciary. NOT one that gets a percentage of my accounts. That small percent that automatically goes to them doesn't seem like much, but it adds up over time. Plus, I found out my advisor was making things much more complicated than they needed to be, presumably to justify his costs.

 

[_19disnA]

Have used several financial planners over the years as I have relocated for business a number of times and prefer to use someone who is local. My experience is a financial planner is not a lawyer/attorney and if you are looking for legal advice in how to setup a will (for example), that isn't what they do. What they can do is explain the tax implications for various choices from an estate planning perspective.

Financial planners can offer investment advice based on your specific financial situation and what your goals are. That relates to not only the size of your portfolio, but your age, how long you intend to work, work sort of pension your company offers, etc. Usually they offer a variety of investment options which range from conservative to more risky. The potential for higher returns generally means it involves more risk. You need to be able to communicate your investment goals to them so they can best assist you. Usually most banks offer some sort of financial services so that is one place to start. None of them have any magical formulas to apply that guarantee you get the best returns. Markets can go up as well as down for a LOT of different reasons that NO ONE can predict ahead of time.

A law was passed a few years ago about that whole fiduciary thing so that isn't really a reason to choose one over the other. Financial advisors often have access to various types of investment products that you can't buy as a private party. That is one reason to use their services. They can also narrow down investment choices and make recommendations that save you time when deciding where to invest. All of them charge for their services, but clearly part of what you are paying for is the time saved by not having to research everything yourself.

 

[mjkacmom]

My husband has been a CFP for 40 years, he highly recommends fee based (and thats who we use although it’s free as a company perk).

 

[tvguy]

I use the financial advisor my mom found, I think she found him at a free retirement seminar. I think she attended about 15 of those free seminars with free meals before deciding what her financial goals were, and who she would use. In her case, he got her set up to minimize taxes on her IRA distributions, and to have a way to pay for Long Term Care. Both worked out perfectly.
He has been our financial advisor for over 30 years. We were able to retire early, 64 for me and 63 for my wife and waited until our full retirement age of 661/2 to start our Social Security. Our total portfolio as a whole has never lost money. He did put us in a high tech fund in 1999 right before tech crashed, but the other funds he had us in overcame that 50% loss.
A good financial adviser will:
1) Listen to your wants
2) Look at your needs
3) Evaluate your tolerance for risk.
4) Give advice, but accept your choices even if they are against the advice given.
5) Evaluate your other investments not under their control, things live 401ks and factor them into your total financial picture. I mentioned this before here on the DIS and someone thought that was none of their business. I disagree completely. Not sure how a responsible financial advisor can't do that, it would be irresponsible. In my case, my wife 15 years ago made changes to her 401k, shifting to more conservative investments. Out of the stock market. Our advisor monitored that and point out she would have made a whole lot more money staying in the stock market.

 

[_19disnA]

Certainly I would also consider a 401k (if you have one) as part of your total investment portfolio. While your financial advisor may/may not offer suggestions on how to allocate those funds, it is still considered part of the total you have to work with from an investment perspective. A good financial advisor wants to know the total picture of the funds you have in order to provide meaningful advice. Simple example of that would be.... is your 401k 90% of your portfolio or 10%??? Their advice on how to allocate your funds would relate to that as well.

 

[lorimt]

I have been in the business for 20 years. There are a lot of good advisors and some bad advisors but a good advisor is worth the fees you pay. There are good advisors out there that don’t have a CFP designation but that is a good place to start. Check the CFP website for advisors in your area and choose a few to have a preliminary meeting with. It is a little like finding a therapist and you want someone that you are comfortable with.

 

[barkley]

for the aspects of estate planning/will/power of attorney-get an attorney who SPECIALIZES in elder law. they will be up to date on any current or pending legislation that can impact your decisions. someone who 'also' handles it in addition to their regular practice is not (IMHO) the best choice (I worked in an area where the decisions people made in setting up wills and trusts could impact them for the remainder of their lives as well as their survivors/future generations-encountered some wills and trusts that had been set up by well meaning attorneys who did not specialize in these aspects resulting in choices made that could never be reversed and had devastating financial consequences).

 

[DCL58]

We use a financial advisor that charges 1% per year. The fee that we pay is substantial, but they have made us so much money over the years that we stay.

 

[tvguy]

for the aspects of estate planning/will/power of attorney-get an attorney who SPECIALIZES in elder law. they will be up to date on any current or pending legislation that can impact your decisions. someone who 'also' handles it in addition to their regular practice is not (IMHO) the best choice (I worked in an area where the decisions people made in setting up wills and trusts could impact them for the remainder of their lives as well as their survivors/future generations-encountered some wills and trusts that had been set up by well meaning attorneys who did not specialize in these aspects resulting in choices made that could never be reversed and had devastating financial consequences).

Specialized Attorneys can also help you navigate a world where some of the people/companies you dealing with do not understand the law.
My mom's Long Term Care Provider did not want to talk to me, (or start paying for her care) because I did not have Power of Attorney even though I was listed as the responsible party and beneficiary of a life insurance component that coverage included. Almost had to go to court, But the Attorney finally got that company to realize their policy was illegal in California, where the policy was sold and was being used.
And after she passed away and I sold her house, the Title company panicked when we went to close escrow because her Trust was just two paragraphs long. Title officer said they are usually at least 20 pages. In that case the Attorney THEY have on call was faxed a copy and laughed. As it put it, that was a normal Trust as they were 40 years ago.........as he put it......before Attorneys stepped in and started making a lot of money writing longer trusts and charging a lot of money for them. It met all the legal requirements and cost $25 to have notarized and filed with the the County.

 

[gvel]

I know many get concerned about tax implications/planning, but truth be told unless you're a high net worth individual there isn't much most financial planners will do. For most W2 individuals (majority of the country) there is not much tax planning other than the deferred options such as 529s or IRAs vs Roth options. I don't think it makes much sense to pay someone a percentage of your assets to basically give you returns similar or lower than an SP500 index fund or create some projections you can easily do yourself online or with the help of ChatGPT.

 

[barkley]

And after she passed away and I sold her house, the Title company panicked when we went to close escrow because her Trust was just two paragraphs long

my mom also had one of those 2 paragraph trusts-they were very popular at those 'come have a free lunch and learn about wills and trusts'. it would have worked fine if she had put/KEPT all her assetts in her trust but she never remembered or thought it was too time consuming to take the paperwork with the information on it when she was chasing down good cd rates thankfully she at least thought to set all those up with POD's.

My mom's Long Term Care Provider did not want to talk to me, (or start paying for her care) because I did not have Power of Attorney even though I was listed as the responsible party and beneficiary of a life insurance component that coverage included

even with a perfectly written POA you can run into issues. we learned with a family member's late in life issues that some pension plans require THEIR OWN specific POA form (hi CalPERS-talking about you). it set us scrambling to see what our own civil service pensions required. found out what they wanted/got the forms/submitted them-then waited a good 6 months to get verification that they had been processed.

one thing that people need to REALY understand-a POA ceases upon the death of the person for whom it was for. all the powers/abilities under it...POOF gone. we dealt with settling an estate and one of the beneficiaries kept asking questions about things we had no idea of that went back years and years (pre-dated POA). the person kept saying 'you have access, you have the POA' and we had to repeat over and over-'no, we had a POA when they were alive, they are no longer alive-it no longer holds any power'.

 

[wabbott]

I would encourage you to continue to study on your own, with the goal of managing your own finances at some point in the future - ALL of them. No one will ever care about YOUR money more than YOU.

Start here.
https://www.bogleheads.org/wiki/Getting_started

 

[tvguy]

my mom also had one of those 2 paragraph trusts-they were very popular at those 'come have a free lunch and learn about wills and trusts'. it would have worked fine if she had put/KEPT all her assetts in her trust but she never remembered or thought it was too time consuming to take the paperwork with the information on it when she was chasing down good cd rates thankfully she at least thought to set all those up with POD's.



even with a perfectly written POA you can run into issues. we learned with a family member's late in life issues that some pension plans require THEIR OWN specific POA form (hi CalPERS-talking about you). it set us scrambling to see what our own civil service pensions required. found out what they wanted/got the forms/submitted them-then waited a good 6 months to get verification that they had been processed.

one thing that people need to REALY understand-a POA ceases upon the death of the person for whom it was for. all the powers/abilities under it...POOF gone. we dealt with settling an estate and one of the beneficiaries kept asking questions about things we had no idea of that went back years and years (pre-dated POA). the person kept saying 'you have access, you have the POA' and we had to repeat over and over-'no, we had a POA when they were alive, they are no longer alive-it no longer holds any power'.

Actually, this trust form was given out by the County Recorders office for free. My mom sat there,, filled it out, they notarized it for free, she paid a recording fee, and it was recorded. Those free lunch trust and will attorneys wanted $1,000 to do that. The County Recorder stopped handing out those forms when attorneys complained. The house was the only thing in the trust. I had been joint accountholder/owner of all bank accounts, brokerage accounts, car, from the time I turned 18 so no need for them to be in the trust. Life insurance, IRAs can't be put in a trust, they have their own beneficiary rules. Other than the issue with Long Term Insurance, when mom passed everything instantly was mine. I just had to notify and send a death certificate to Social Security, to her pension plan and to her life insurance company.

 

[_19disnA]

It seems various topics are now getting mixed together. Having a medical POA for your elderly parents makes a lot of sense but really is unrelated to the original question about having a financial advisor. Medical POA is helpful if, for example, your parent suffers a stroke and can't communicate with the hospital medical staff. The staff will refuse to speak with you if you don't have a POA. A financial POA is necessary if you are managing the finances (i.e. pay monthly bills, deposit checks, etc.) for an elderly parent who is no longer able to do that on their own. We have both types of POA's and had no issues when closing out things after the last parent passed. Clearly, once someone is deceased, they aren't able to speak for themselves. In some cases you might be asked to provide a death certificate. Common examples would be terminating health insurance or stopping Social Security payments.

Adults should always have a will in the event of their death and would cover more than just your investments. Makes clear how the estate gets divided between their spouse (if still living) and children/grandchildren/etc. Trusts and some of those other things probably are only necessary if you have significant/complicated assets that need to be distributed when you die that can't be adequately covered by a will. A financial advisor isn't going to help you write your will, but most likely suggest you work with an attorney to do that.

While there are lots of online resources to educate yourself about investing, it doesn't replace the role of a financial advisor who has years of experience in this area and also typically includes financial experts who helps provide guidance (particularly at the larger investment firms). To me is somewhat like those who try to sell their house on their own and 'save' the cost of the realtor. While it can be done, there is a lot more that goes into this that the average person is likely not familiar with.

 

[QueenIsabella]

I agree with the PP, the OP seems like he knows he wants a financial planner. Telling him to "just do it yourself" is not helpful. Maybe one day he'll decide he can, but for now, he'd like an assist. Kind of like, some people do their own car maintenance--that doesn't mean everyone could or should be changing their own oil.

To the OP's question, we had occasion to change financial planners a couple years ago. We asked our estate attorney for recommendations, and went with one of them. We've been happy with the new guys. We've always felt that we've gotten our money's worth, both for DH and I, and our young adult children (who have their own assets). With the kids, especially--they were nervous about managing their own funds (roughly $100k apiece, gifts from their deceased grandmother). Our financial advisors took the time to listen to their life goals, their interests, and recommended investment plans, individualized to their needs. One just got married and is buying a house next year, another wants to invest in "cruelty free" funds, that sort of thing. The advisors will ask a lot of questions about goals, risk tolerance, and so forth. They can make recommendations to minimize taxes and help with estates.

DH and I have been taking out a lot of money lately--2 in college, one recently married, one looking at law school, and we just put a down payment on a trip that will likely be ~$100k, all in (5 people cruising around Iceland, with extra days). DH was worried that we were over-drawing on our retirement nut. Th planner said, "It's my job to let you know if you're drawing too much, too quickly. You're fine!" So, DH felt a lot better.

P.S. I'm also a boglehead, which was mentioned up-thread. I learn a lot, but STILL like the help of a financial planner. I'm smart enough to know that I don't know everything!

 

[afan]

5) Evaluate your other investments not under their control, things live 401ks and factor them into your total financial picture. I mentioned this before here on the DIS and someone thought that was none of their business. I disagree completely. Not sure how a responsible financial advisor can't do that, it would be irresponsible

This is important and so helpful. When I meet with my fa I go in with all my numbers, 401k, hsa, savings access etc so we have the whole picture.

He also helped me when my work changed 401k providers and went over the options because the fund I had been in wasn't there.

He watches what things are doing and suggests moving stuff around if something isn't performing. I could do all of the above but prefer to spend my off hours doing things I enjoy more than a deep dive into finance stuff. I know enough.

As for the POA stuff, it's not just for the elderly. Any of us could need one. A blog that I read also suggests setting up something for your college kids in case anything happens. A POA and medical docs since they are adults once they are 18. Esp helpful if they are going to school away from home/out of state.

 

[tvguy]

This is important and so helpful. When I meet with my fa I go in with all my numbers, 401k, hsa, savings access etc so we have the whole picture.

He also helped me when my work changed 401k providers and went over the options because the fund I had been in wasn't there.

He watches what things are doing and suggests moving stuff around if something isn't performing. I could do all of the above but prefer to spend my off hours doing things I enjoy more than a deep dive into finance stuff. I know enough.

As for the POA stuff, it's not just for the elderly. Any of us could need one. A blog that I read also suggests setting up something for your college kids in case anything happens. A POA and medical docs since they are adults once they are 18. Esp helpful if they are going to school away from home/out of state.

Like I posted, last time I mentioned this I got flamed by someone who thought it was none of my FA's business what our 401ks specifically, were invested in.
My FA even has my classic car listed as an asset, and we update the value once a year.
As for POA, I had to get one FOR my daughter because she moved overseas and I handle any financial transactions she needs handled here, like filing her taxes.

 

[barkley]

As for the POA stuff, it's not just for the elderly. Any of us could need one. A blog that I read also suggests setting up something for your college kids in case anything happens. A POA and medical docs since they are adults once they are 18. Esp helpful if they are going to school away from home/out of state.

a POA is valuable for the college students but I would HIGHLY recommend that anyone whose student is attending more than an 'errand's drive' away from home to find out what particular forms INDIVIDUAL entites need your student to fill out and have on file (and find out how long they are good for before they need to fill out a new one) for anything they may want/need parental help with. I overhear panicked calls between parents and student/frustrated calls between vendors/provider's and out of area parents all the time when I go into the university town near us. some of the common special releases of information/permission for you to act on your student's behalf seem to be-

university-permission to speak to them about ANYTHING. a separate one for the university's student health department (valuable if you are trying to co-ordinate an issue between that coverage and any other coverage your student has).

medical providers-like I said above whatever is required for the university health plan but ALSO you need whatever your student's other coverage requires (as well around us every provider group has their own form so it can be a nightmare dealing with an insurance glitch if all the forms are not in place). the local pharmacies also field allot of calls esp. when filling scrips from 'back home' and require a release on file for a parent to help sort it out.

rentals (b/c those online portals to report issues are not always responsive and your student may be in classes the limited time the rental office is open to speak with a live person). same with internet providers and local utilities.