- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Are all financial advisors the same?
Posted on 4/18/16 at 8:53 am
Posted on 4/18/16 at 8:53 am
I am mid 30's and have been with my current FA for about 8 years. The first guy I had seemed to have little interest in my account and I heard from him once a year. I moved to BR 8 years ago and got a local guy on a recommendation from a friend. I have a Roth IRA with around 60K in it. The service started out great, put me in a few mutual funds, and one of them has done great, up about 12% over those 8 years. The rest of the funds are anywhere from -2% - 5% growth. The last few years I have had less and less contact, with the final straw coming this year.
Basically he doesn't look at my account until the week before we have our annual visit. Never suggests anything, just looks at the statement and basically says the market is in control. Since opening the account we haven't moved any money around, we just split up that year's contribution between the 4 funds, with most of it going in to the best performing one.
I understand IRA's are long term, and it's not day trading, but I really don't see any advantage I'm getting from this guy. I understand he has thousands of accounts, but you would think he would have a little more knowledge of my accounts and interests. The only reason I am hesitant to switch is because who is to say the next FA would be any different? I am strongly considering opening my own IRA through Scottrade and managing it myself. I can do 20 minutes of googling and get the same "insider info" that I have been getting from my current FA.
Basically he doesn't look at my account until the week before we have our annual visit. Never suggests anything, just looks at the statement and basically says the market is in control. Since opening the account we haven't moved any money around, we just split up that year's contribution between the 4 funds, with most of it going in to the best performing one.
I understand IRA's are long term, and it's not day trading, but I really don't see any advantage I'm getting from this guy. I understand he has thousands of accounts, but you would think he would have a little more knowledge of my accounts and interests. The only reason I am hesitant to switch is because who is to say the next FA would be any different? I am strongly considering opening my own IRA through Scottrade and managing it myself. I can do 20 minutes of googling and get the same "insider info" that I have been getting from my current FA.
6
Posted on 4/18/16 at 9:08 am to slinger1317
You don't need a financial advisor at your current net worth/income level.
Posted on 4/18/16 at 9:13 am to slinger1317
If a financial advisor had any investment advice worth money, you can't afford him.
Financial advisors can help you design investment allocation, basic tax implications and other items.
Once you have those figured out, you don't necessarily need a FA unless you want help maintaining it
Financial advisors can help you design investment allocation, basic tax implications and other items.
Once you have those figured out, you don't necessarily need a FA unless you want help maintaining it
Posted on 4/18/16 at 9:21 am to GenesChin
quote:
Financial advisors can help you design investment allocation, basic tax implications and other items.
This year I actually needed some help in this area and he dropped the ball. I made too much money this year to contribute to a Roth, and I wanted to open a Traditional and backdoor it and when I suggested doing so he looked at me like I just killed his cat. He said he would look into somethings we could do as a company to set up some deferred income etc. But I needed him to get back to me by last Friday because this was for my 2015 deduction. I didn't want to miss a year so Friday afternoon I opened a Scottrade account and put $5500 in just to make the deadline. I am considering moving everything into that account and managing it myself.
Posted on 4/18/16 at 9:33 am to slinger1317
quote:
I am considering moving everything into that account and managing it
This is what you should do. These are not complicated issues we are talking about here. And frankly, if you have the intelligence to earn an income above the Roth limit, you can answer your questions for yourself in about half an hour reading online.
I suggest the Bogleheads Wiki to start.
Posted on 4/18/16 at 9:49 am to slinger1317
The reality is that most financial advisers grade their clients, A, B, C, D, mainly based on portfolio size (with some exceptions for people with small portfolios today but with probability of a lot more money in the future, like young doctors). You, my friend, at that value, are probably a C or a D client. He is going to spend much more time on his larger clients, cause they pay him more.
At that level, you can likely do it yourself, if you are willing to spend some time and learn. If you don't have a lot of time for research, just pick a couple of index funds and go from there.
Or maybe, someplace like the Mutual Fund Store.
As to his hesitation on the backdoor IRA, please understand that this is a maneuver that some believe violates the IRS step doctrine, so some FAs (or more likely, their compliance officers) may hesitate to be involved in such a transaction. I've seen IRS make this argument in the midst of a larger audit, but I've never seen them hit a client solely on this. And I think the chances are very low in the future that they would, but I can't say never, and if you have ever met a financial firm compliance officer, even that small of a risk is way too much for some of them.
At that level, you can likely do it yourself, if you are willing to spend some time and learn. If you don't have a lot of time for research, just pick a couple of index funds and go from there.
Or maybe, someplace like the Mutual Fund Store.
As to his hesitation on the backdoor IRA, please understand that this is a maneuver that some believe violates the IRS step doctrine, so some FAs (or more likely, their compliance officers) may hesitate to be involved in such a transaction. I've seen IRS make this argument in the midst of a larger audit, but I've never seen them hit a client solely on this. And I think the chances are very low in the future that they would, but I can't say never, and if you have ever met a financial firm compliance officer, even that small of a risk is way too much for some of them.
Posted on 4/18/16 at 9:54 am to LSUFanHouston
What's the best approach to finding a FA or CPA locally? Personal referrals?
I say this because people my age generally do not need need these professionals yet as they still have simple financial situations. I am contemplating getting someone on an hourly basis to bounce ideas off. I know most of this material well but it can be reassuring to get a professionals $0.02 that I am not completely in left field.
I say this because people my age generally do not need need these professionals yet as they still have simple financial situations. I am contemplating getting someone on an hourly basis to bounce ideas off. I know most of this material well but it can be reassuring to get a professionals $0.02 that I am not completely in left field.
This post was edited on 4/18/16 at 9:54 am
Posted on 4/18/16 at 9:54 am to slinger1317
quote:
...one of them has done great, up about 12% over those 8 years
Just out of curiosity, when you say "up about 12%", do you mean annually or in total?
Posted on 4/18/16 at 10:00 am to lynxcat
quote:
What's the best approach to finding a FA or CPA locally? Personal referrals?
Yeah. Most CPA firms, and many FA firms, don't do a whole lot of traditional advertising. We may sponsor events, have memberships in professional associations where we want clients, etc.
But we get very very very few cold calls. I would say probably 60 percent of my new clients on an annual basis come from either current clients or personal relationships of mine, and another 35 percent come from being involved in various organizations or having sponsored various events. Maybe 5 percent are people that just call me out of the blue or whatever.
If you don't know too many people your age who use these types of services, then go ask a trusted family member or maybe a boss that you like, if they would refer you to someone they work with.
Posted on 4/18/16 at 9:43 pm to slinger1317
Posted on 4/18/16 at 10:07 pm to slinger1317
Are the all the same? No. That is why they all take specific clients (or any new clients at all). With the amount of information online I'd hope you could plan out what to do with 60k for the next few years, an advisor will just cost more. As far as taxes go, they could help but not that much with that little movement (relative). I've found the majority of the advisors are helping with planning for the next generation and limiting rash decisions when the market does a '08.
Posted on 4/19/16 at 6:25 am to Hickok
Financial advisors are really only valuable when the market tanks and you want to pull everything out, they are there to talk to out of it or limit your carelessness.
If the market is churning they don't have anymore knowledge than you do, if they truly had great stock tips they aren't sharing with anyone but their best clients.
FA's are mostly just salesman. Their job relies on bringing in more money and more clients, and steering then to the funds that make them money.
If the market is churning they don't have anymore knowledge than you do, if they truly had great stock tips they aren't sharing with anyone but their best clients.
FA's are mostly just salesman. Their job relies on bringing in more money and more clients, and steering then to the funds that make them money.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News