Using a fee only financial planner

[havaneselover]

Can anyone help me understand how this works? How much time does it take and what should I expect to pay? Do you go annually after your first meeting? My finances are fairly simple. I just need advice and strategies on whether I should put more in my HSA, how much in my employee IRA, 529s, open a Roth IRA, etc. I'm saving a good portion of my income but I want to make sure I'm saving it in the right places. I'm not interested in having someone manage my investments. I'm very happy with Vanguard.

 

[CoP Luv]

Can anyone help me understand how this works? How much time does it take and what should I expect to pay? Do you go annually after your first meeting? My finances are fairly simple. I just need advice and strategies on whether I should put more in my HSA, how much in my employee IRA, 529s, open a Roth IRA, etc. I'm saving a good portion of my income but I want to make sure I'm saving it in the right places. I'm not interested in having someone manage my investments. I'm very happy with Vanguard.

We have a fee only planner, but they manage our money along with along with advisement. We pay 1% of our balance each quarter and have an annual meeting along with a few conversations a year depending on goals, etc.

 

[havaneselover]

We have a fee only planner, but they manage our money along with along with advisement. We pay 1% of our balance each quarter and have an annual meeting along with a few conversations a year depending on goals, etc.

Hmmm. I really just want to pay someone an hourly rate to look over my balance sheet and help make sure I'm putting things in the right place. I wonder if this is even possible.

 

[MillauFr]

The financial industry would like you to believe it is rocket science but it isn't. Unless you have a complicated situation you could probably do fine just by educating yourself and figuring it out on your own. If you are already at Vanguard that is a good start. Paying less to have someone manage your funds means more money in your pocket.

 

[havaneselover]

The financial industry would like you to believe it is rocket science but it isn't. Unless you have a complicated situation you could probably do fine just by educating yourself and figuring it out on your own. If you are already at Vanguard that is a good start. Paying less to have someone manage your funds means more money in your pocket.

Yeah, I'm fairly savvy (Econ degree, math minor, follow the market closely, etc.) What I'm needing to understand is am I putting my savings in the right place. For example should I keep maxing out my hsa contribution? I opened it to pay for braces but I recently read that you should max it out even at the expense of retirement savings (Since unlike a 401k, you aren't taxed on withdrawals and medical expenses in retirement will probably be very high). Also I struggle with college savings and whether I should increase/decrease my contribution, etc. But no my situation isn't complicated so maybe I can figure this out on my own.

 

[eliza61]

The financial industry would like you to believe it is rocket science but it isn't. Unless you have a complicated situation you could probably do fine just by educating yourself and figuring it out on your own. If you are already at Vanguard that is a good start. Paying less to have someone manage your funds means more money in your pocket.

LOL and people on the internet would have you believe that is so easy and simple to understand.

Op, I adore my financial planner.
First, let me say, yes I have tried reading all the so call easy books. investing for dummies, bogleheads guides to investing, investing for fools. (I should have invested all the money I wasted on these books). I hate it, it's dull, it's boring and it's confusing so how good am I really going to be at it? I hang out on bogleheads.com and early-retirement.com also. how many people becoming proficient in any area they find dull (can someone say physics). anyhoo. yes if all you want to do is stick your money in an index fund then definitely you can do that easily by yourself.

1) so my number one advice. set some goals what are your plans with whatever money. I have no bones about it, dh and I wanted to be rich. plain and simple. our finanical planner helped us acheive that.

2) I use a fee only planner. We started using them way back in the 80's because my dh was working oversees and we needed help with taxes and such from foreign income.

I think we started with 10,000 bucks its grown over the course of 30 years to close to 5 million. the gentlemen I have now does/did everything though from investing to estate planning to researching information and companies, to selling my husbands company when he died. I meet with him about 5 times a year, I'm meeting with him at the end of july to discuss some things I would like to do when I retire next year and how to use some money tax efficiently (that's another area,)

So my attitude is this, I don't self diagnose myself when I get sick, I don't read a book and then try to do electrical work on my house neither do I google how to make car repairs then get to work on my engine. I have no problem paying for professional services. the key to anyone of these is to find some competant advice.

my fp runs 1% of my portfolio. if I do a lot of active trading then some years it's a little more.

now you've got some education in this area so certainly there are great hourly folks out there.

 

[Eastern]

We have a fee only planner, but they manage our money along with along with advisement. We pay 1% of our balance each quarter and have an annual meeting along with a few conversations a year depending on goals, etc.

You pay 1% of your money every quarter? So 4% a year? That is a high percentage to be paying.

If he is taking a percentage he is not a fee only planner.

 

[Eastern]

LOL and people on the internet would have you believe that is so easy and simple to understand.

Op, I adore my financial planner.
First, let me say, yes I have tried reading all the so call easy books. investing for dummies, bogleheads guides to investing, investing for fools. (I should have invested all the money I wasted on these books). I hate it, it's dull, it's boring and it's confusing so how good am I really going to be at it? I hang out on bogleheads.com and early-retirement.com also. how many people becoming proficient in any area they find dull (can someone say physics). anyhoo. yes if all you want to do is stick your money in an index fund then definitely you can do that easily by yourself.

1) so my number one advice. set some goals what are your plans with whatever money. I have no bones about it, dh and I wanted to be rich. plain and simple. our finanical planner helped us acheive that.

2) I use a fee only planner. We started using them way back in the 80's because my dh was working oversees and we needed help with taxes and such from foreign income.

I think we started with 10,000 bucks its grown over the course of 30 years to close to 5 million. the gentlemen I have now does/did everything though from investing to estate planning to researching information and companies, to selling my husbands company when he died. I meet with him about 5 times a year, I'm meeting with him at the end of july to discuss some things I would like to do when I retire next year and how to use some money tax efficiently (that's another area,)

So my attitude is this, I don't self diagnose myself when I get sick, I don't read a book and then try to do electrical work on my house neither do I google how to make car repairs then get to work on my engine. I have no problem paying for professional services. the key to anyone of these is to find some competant advice.

my fp runs 1% of my portfolio. if I do a lot of active trading then some years it's a little more.

now you've got some education in this area so certainly there are great hourly folks out there.

I am guessing that you have that much money because your husband started and maintained a business, not because your financial planner took 10k and turned it into 5million.

I think most people would like 'to be rich'. If it was as easy as giving someone 10k and letting them run with it, don't you think everyone would be a 5 millionaire?

Finances should never be 'boring': it's your money; learn to deal with it.

 

[havaneselover]

Rich isn't a realistic objective for me unless I inherit money (which I likely will in 20 years or so but am not banking on it). I'm not an entrepreneur, I'm a single parent and at 38 I only have a decade of work experience because I stayed home with my kids until the divorce which unsurprisingly wreaked havoc on my finances. My goal is to be comfortable and to provide my children with opportunities. I know, for example, I can comfortably save 20% of my income. I just want to save it in an efficicient way.

 

[eliza61]

I am guessing that you have that much money because your husband started and maintained a business, not because your financial planner took 10k and turned it into 5million.

I think most people would like 'to be rich'. If it was as easy as giving someone 10k and letting them run with it, don't you think everyone would be a 5 millionaire?

Finances should never be 'boring "t's your money; learn to deal with it.

True. My bad, I didn't mean to make it sound like he did that through all investing BUT we have done quite well with the help.


Finances IS boring to me, What because it's my money all of a sudden that's supposed to make it interesting. Lol why do people have such a hard time with financial matters? who knows but I've always find it interesting that people say "oh just learn about it". I think I'm a halfway intelligent cookie and yes, I'll admit I still think it's dull as dirt and confusing. which maybe the industries answer to job security who knows. but I'm definitely old enough to be honest about my capabilities then make smart decisions. LOL, what's that old saying "the man who represents himself as a fool for a client".

Not sure what the "deal with it" means"? . Lol. I am dealing with it, I've hired a great financial planner.

Anyway Hanselover, I didn't mean to hijack your thread. basically to sum it up.

I value my relationship with my fp and my accountant. I have no problem paying the fee he charges for the product/service I get. I know the dis is mainly "anti financial planners" but if you think you could benefit from one, go for it. I also don't do my own taxes so take my experience with a grain of salt.

ps. I'm a research chemist so I have no vested interest in saying that.

 

[CoP Luv]

You pay 1% of your money every quarter? So 4% a year? That is a high percentage to be paying.

If he is taking a percentage he is not a fee only planner.

That is incorrect. We pay 1% per year, paid quarterly. Our planner IS a fee only planner, in that there is a 1% annual fee of our portfolio. A commission based planner takes a commission amount based on what type of investments the money is invested in.

 

[maciec]

We too are having a tough time finding a financial planner. I do not want them to manage anything for me and I don't want to buy anything from them. I just want someone to look at our options with dh's retirement and give us suggestions. All of the financial planners around here are selling a product like Merrill Lynch, Edward Jones, Morgan Stanley, etc.... Very frustrating

 

[tvguy]

I would ask your friends about who they are happy with. I use a Financial Planner who works on commission. I don't know if this is costing me more than a fee for service adviser, I just know that I was more concerned that I have a good planning, now how they were paid. He looked at the big picture for my mom, with a heavy emphasis on the lowest tax liability possible. He made sure she had more than enough income, and that any possibility was covered. By that, I mean he insisted she even get long term care insurance. She didn't need it until she was 89, but it was nice when she did.
He has set DW and I up with a good fixed income in 4 years when we retire, made sure we have long term care insurance, and again, made sure our financial decisions focus on paying the lowest taxes possible. He crunched the numbers on Roth IRAS, which make no sense at all for us. Paying 30% tax today on the rollover when hopefully we will be in a lower (hopefully 17%) tax bracket when we need the money. And all that money we won't be paying tax on today, will be earning interest too.

 

[MichelleB]

Have you checked into Dave Ramsey's website? They have an ELP (endorsed local provider) section that will link you with someone in your area to help with such things. I've not used one but have been tempted for the same reasons as you. I am fairly intelligent and don't need someone to do for me what I can do myself but having an extra set of eyes or someone to educate me on occasion would be helpful.

 

[havaneselover]

Have you checked into Dave Ramsey's website? They have an ELP (endorsed local provider) section that will link you with someone in your area to help with such things. I've not used one but have been tempted for the same reasons as you. I am fairly intelligent and don't need someone to do for me what I can do myself but having an extra set of eyes or someone to educate me on occasion would be helpful.

No but I will definitely take a look. Thanks for the suggestion!

 

[eliza61]

We too are having a tough time finding a financial planner. I do not want them to manage anything for me and I don't want to buy anything from them. I just want someone to look at our options with dh's retirement and give us suggestions. All of the financial planners around here are selling a product like Merrill Lynch, Edward Jones, Morgan Stanley, etc.... Very frustrating

as TVGuy, said, start with family members or coworkers for recommendations.

Also check out CFPboard at cfp.net. that is the national certification for financial advisors. now that won't tell you every thing but it can at least get you someone who has a basic knowledge base.

Next set up an interview. A good financial planner will give you a FREE consultation. At this consultation they should not be selling, advising or any thing. they should be listening to you. what are your aspirations, goals etc. You should be asking THEM questions.

Never go to one of those seminars. waste of time.

http://www.cfp.net/
http://www.napfa.org/

Also I really like Dana Anspach at about money 55. I maybe a bit older than you but I find her information easy to understand and great.

http://moneyover55.about.com/bio/Dana-Anspach-45901.htm
http://moneyover55.about.com/od/findingqualifiedadvisors/tp/bestfinancialadvisor.htm

Good luck

 

[cedricandsophie]

We have a fee only planner, but they manage our money along with along with advisement. We pay 1% of our balance each quarter and have an annual meeting along with a few conversations a year depending on goals, etc.

Same here. Except ours does our taxes too and we meet once a quarter. And he answers any questions about investments or spending decisions during the year. All for 8000 a year plus about .75 of our investments. Feel so much better having someone else do it. We are much better off for it. I got really worried during 2008 and 2009 when our accounts lost sbout 40%. But he was able to calm us down, hold course and we are way ahead now. Some of the best advice we get is about diversifying our money so we don't have too much in one sector.

 

[SuzanneSLO]

Have you checked into Dave Ramsey's website? They have an ELP (endorsed local provider) section that will link you with someone in your area to help with such things. I've not used one but have been tempted for the same reasons as you. I am fairly intelligent and don't need someone to do for me what I can do myself but having an extra set of eyes or someone to educate me on occasion would be helpful.

Did I miss the list of financial planners on his website? I only saw investment advisors listed. -- Suzanne

 

[craigkerstiens]

Can anyone help me understand how this works? How much time does it take and what should I expect to pay? Do you go annually after your first meeting? My finances are fairly simple. I just need advice and strategies on whether I should put more in my HSA, how much in my employee IRA, 529s, open a Roth IRA, etc. I'm saving a good portion of my income but I want to make sure I'm saving it in the right places. I'm not interested in having someone manage my investments. I'm very happy with Vanguard.

Another vote here against one. It sounds like you're thinking and focusing on all the right things. If the piece of mind to know you're not perfecting your finances for an extra 1k-2k here or there is what you're looking for, you'll likely just end up costing about 1k to a planner. If you're taking a long term approach that's focused on getting compounding interest where you can, maximizing employer matching, then you're really in okay shape. I've had some similar questions lately around at what point I should stop contributing to a 529 for college so I don't over save and pay the penalty. A financial planner isn't really going to be much more help there because there's huge guesses/assumptions about the price of college by that time and the rate of return I get over it. And yes, it's a good position to be in and good problem to have, but I'd just continue to do your homework over time like you have been vs. paying to someone that likely may not have significantly better insight.

 

[havaneselover]

I'm thinking I may not have the income/net worth at this point to have a financial planner after reading through everyone's thoughtful replies. Allocation of savings is my big struggle but I'm thinking moving forward I will contribute enough to my company IRA to get full match, then max out my HSA since it's triple tax advantaged, and then more to the IRA (maybe I should switch some of my extra to my rollover IRA with Vanguard and away from my Fidelity IRA from work). As far as the 529, I'm not worried about over saving. I do have 4 years of tuition paid for in-state for both children. Room and board is what I'm trying to take care of now.