Shopping for a financial advisor...help!!

[wedindis'00]

What type of things "fall" under the workings of a financial advisor, we are looking to do a few things and would love professional help...pun intended.

Things we are trying to do....
consolidate student loans
draw up a will
purchase life insurance
maximize retirement benefits
kids college/ investments

TIA

 

[HelloChum]

Oh Boy!! Going through this right now (different financial situation than you though)

...talk to at least 5 different advisors and make sure you do a FINRA broker check on them...

http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/index.htm

(best to do it before you even call them so you don't waste time talking to some one that has a history of complaints--I initially made this mistake and boy were the red flags going up with what they were suggesting!!).

Also call MA Sec of State Securities Division to check any disclosures through the state.


http://www.sec.state.ma.us/sct/


They were very helpful. One of the persons I was looking at had a history with Sec of State but no disclosures on finra--so definitely check both!

Do a lot of homework yourself online--look up articles on choosing a financial advisor. I found friends and accountants to be good resources for giving recommendations but--remember that their goals may be different than yours and therefore the advisors "philosophy" may not be a good match for you. Best to sit down and meet with advisors--they all will give a free initial consult--

Take your time and don't let anyone rush you!!

Good Luck!!

I would use an attorney for any will or estate planning--

 

[HelloChum]

You may want to make sure anyone you talk with or plan to use is a Certified Financial Planner and has the CFP certification...you can check their website for advisors near you...of course, it is no guarantee that they will be a good match for you, but it is a decent place to start...

http://www.cfp.net/search/

The CFP website has some good articles too...

http://www.cfp.net/learn/

Good luck!!

 

[mjkacmom]

DH is a CFP for a large financial services company, and we got life insurance from a life insurance agent, and still need to get a will drawn up by a lawyer.

 

[daisax]

What you want is a fee only financial planner, which may be difficult to find depending on how much money you have to invest (as in, you probably would need more than a half million)

What you DON'T want is somebody who's going to take a percentage and make their money based on how many things they can sell you or talk you into doing.

If he/she tries to sell you an annuity, run for the hills.

 

[ceecee]

WHOA....Annuities are not bad, it so depends on your financial situation!!! As for a will, you should see an estate attorney. A financial planner is a great start and most banks and Credit Unions do free consultantions, get several opinions and go with what you need. You do not need to pay for these services either. DH is a trust officer/financial planner with Series 7 license as well as a CFP and he works for a large credit union and does consultations at no charge.

 

[DisneyLover83]

My Dh is a Securities Compliance Officer at a large broker/dealer. His suggestions are very similar to HelloChum. Make sure to do a FINRA broker check, use a CFP (make sure to use a practicing member), and ask your family/friends for a referral. Do not use someone just because they advertise or pass out flyers! You would not believe the complaints/investigations that go on behind the scenes.

 

[clh2]

What you want is a fee only financial planner, which may be difficult to find depending on how much money you have to invest (as in, you probably would need more than a half million)

What you DON'T want is somebody who's going to take a percentage and make their money based on how many things they can sell you or talk you into doing.

If he/she tries to sell you an annuity, run for the hills.

I agree with the first statement...and would only ever use a fee-only financial planner. I do not agree that you need to have a half million to find a planner.

We've used a financial planner for about 15 years, and our original reason for meeting with him was I needed to rollover an IRA to a 401-K, and the amount we had was a whopping 23,000. We got great advice, and also do a financial "check-up" about every year or two. This is the best money we spend. And - I might add - our planner LOVES dh and I. We are his "poster children" for retirement planning...and we started out with hardly anything, no trust funds, no big inheritances - we are just normal working people, with average jobs. This planner has really drilled into us to sock away the retirement dollars from the beginning. Again - we started with hardly anything.

From the OP's list of things they want to accomplish is to have a will drawn up. Our financial planner doesn't do this, although every time we meet with him, it is on the check list to see if DH and I have any circumstances that have changed that might warrent us taking a look at our will.

Other things we discuss at our meetings - quick review of mortgage; other debt; minimizing taxes paid; we discussed how much life insurance DH and I each need - but not the actual purchase of the policies; how much is needed for retirement, and college funds. Our planner has awesome software that takes our portfolio and dissects all the mutual funds into a % of what types of investments we are in. As we have gotten a little older, we keep track of the investment types to make sure they are properly balanced.

 

[QVCshopper]

Check Vanguard. I worked there for over 8 years and they have a great, free investment section with lots of advice. If you want to pay, they also have managed account services and will recommend your asset allocation.

You can do everything yourself, with the exception of the will (even that you can do on your own through Suze Orman's site, but I went through a lawyer for mine). As far as life insurance, I have that through USAA. If you are a member, they have a nice education section as well.

The world of 401Ks and college savings sounds daunting, but if you educate yourself, it's not too hard to understand. Plus, everything you learn is invaluable for later in life.

 

[PatsMom]

The National Association of Personal Financial Advisors (NAPFA) requires that members be fee only. They have a web site - napfa.org I believe.

There is also the Garret Planning Network - I dont' know the web site but if you google it will come up. They are financial planners who work on an hourly basis and could be a great fit for someone who is just starting out. They have members all over the country I believe. Some are also NAPFA members - a lady in my study group is part of both networks.

An hourly planner will work with you to recommend various strategies that will help you achieve your goals. In many situations, you will have to do your own implementation - for example, the planner might recommend investments for you but if they are not going to charge a fee to manage your assets because the account size is too small, they will just tell you how to open an account, what steps to take to get the money there, and how to invest it. They also will not sell life insurance but might be able to recommend a broker to you after they help with calculating the need for insurance. I know very few who do the actual estate planning - most will just recommend what type of documents you might need and refer you to an attorney. We also assist clients with funding trusts, etc if that is part of the plan.

 

[coastiewifern]

http://www.finra.org/Investors/Tools...heck/index.htm

So when looking on this site you are to make sure they have no disclosures? Is that the main thing? I was just looking mine up.

 

[PatsMom]

You should be aware that the FINRA broker check will only turn up brokers. If you are checking on a investment advisory rep who is not a broker (and this would apply to most fee based advisors) you will not find them through FINRA. Registrations are maintained with the state or with the SEC. You could ask your advisor for a copy of the firm's ADV Part II, his or her U-4, and view the firm's ADV Part I on line - there is a link on the SEC's web site to the IAPD.

 

[HelloChum]

My Dh is a Securities Compliance Officer at a large broker/dealer.....You would not believe the complaints/investigations that go on behind the scenes.

Oh, I can only imagine!! I was horrified when I found out about FINRA and did a FINRA check on the first 2 advisors I met with (they were partners)--they had disclosures to the tune of hundreds of thousands of dollars!! And, not just one disclosure--3, 4, 5 disclosures---EACH!!

A friend who is an estate paralegal also gave me some recommendations of advisors to avoid at all costs--for the heck of it, I did a FINRA check on them. Same thing...multiple disclosures, hundreds of thousands of dollars for each...

It is difficult to trust people sometimes!! Look at the whole Madoff issue--the people who lost money probably had the best attorneys, etc at their disposal and they still were taken advantage of.


Good Luck to the OP...

 

[tnd]

I totally agree with the recommendation to go to a fee-based planner. I would only use that type of advisor. I prefer to pay experts for their time, and that way you know all of the advice is only in your interests. If they receive a percentage of your investments or make money based on trades you do, often it is in their interest to "churn" your money to re-invest and get more commission, even if it is not the best for you.

 

[ceecee]

I totally agree with the recommendation to go to a fee-based planner. I would only use that type of advisor. I prefer to pay experts for their time, and that way you know all of the advice is only in your interests. If they receive a percentage of your investments or make money based on trades you do, often it is in their interest to "churn" your money to re-invest and get more commission, even if it is not the best for you.

Most fee based planner STILL make a commission on the investments they sell, so they aren't always in your best interests.

 

[trip]

It is difficult to trust people sometimes!! Look at the whole Madoff issue--the people who lost money probably had the best attorneys, etc at their disposal and they still were taken advantage of.

Madoff is a crook and I'm glad he was found guilty but I'm not sure they were all taken advantage of.

This may be a little cynical but some of those people knew the returns they were getting were waaaaay more than anywhere else. (If something it too good to be true it usually is) Also many invested all of their money. (didn't diversify) And they liked being in the "exclusive" club. (Madoff didn't let just anyone invest)

 

[PatsMom]

Most fee based planner STILL make a commission on the investments they sell, so they aren't always in your best interests.

I have to disagree with this statement - after 15 years in the business I'd say the vast majority of advisors who call themselves fee based do not receive commissions on investments. I know quite a few who receive commissions on insurance products that they place, but not investments.

Any advisor who will not disclose to you how he or she is compensated should be avoided.

 

[DVC Sadie]

I have to disagree with this statement - after 15 years in the business I'd say the vast majority of advisors who call themselves fee based do not receive commissions on investments. I know quite a few who receive commissions on insurance products that they place, but not investments.

Any advisor who will not disclose to you how he or she is compensated should be avoided.

I agree.

For some people it is more beneficial to pay a % of their portfolio annualy and for others an hourly rate will do just fine. I think it depends on the needs of the individual. No matter which way a person chooses to pay it should all be decided upfront and prior to receiving their bill.