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Phil
LSU Fan
Member since Jun 2010
227 posts

Northwestern Mutual Financial Advising
Currently I have life insurance through Northwestern Mutual. My contact with them called my wife and I in yesterday to have a meeting to discuss additional options that they provide.

One option that he mentioned that was interesting was him putting together a financial planning portfolio for us. He mentioned that he can handle it two ways. One would be to give us a few options and we proceed forward with whatever we choose and it would be free. Basically it would be a shotgun blast of options that we can choose from.

Option two would be for us to pay $1,500 and they would put together a full plan portfolio taking into account income, bills, student loans, etc. as well as pull in my CPA to put together a full plan for my future retirement/wealth planning. The initial fee would be $1,500 and every 4 years or when we would need to adjust it would be $300.

He didn't push us to make a decision either way and just stated the two options but did make a comment that he planned on all his clients to be "paying" clients by 2018 (In some sort of the way, I cant remember what he said).

Has anyone done this before? Is this a good option? I don't necessarily know much about all the different financial planning options and feel that even though it is an initial $1,500 hit, it would at least set me up for the future.

Any suggestions, opinion, direction would be helpful.


AUtigerNOLA
Auburn Fan
New Orleans, LA
Member since Apr 2011
15369 posts

re: Northwestern Mutual Financial Advising
My NM advisor is a buddy from college. Even though I graduated in Finance, I let him handle other things for me(Life Insurance) and I opened a brokerage acct but I chose the funds I wanted. However, I do have a good grip on what I need to do personally. I pay $0. I wouldn't pay for the service unless you had a ton of money because he put together all those portfolio items you talked about into acct when we discuss yearly. No need for additional fees because they get paid in other ways thru policies.
This post was edited on 1/27 at 11:31 am


Phil
LSU Fan
Member since Jun 2010
227 posts

re: Northwestern Mutual Financial Advising
My guy wouldn't even be a broker. He is asking me to pay $1,500 to set up a retirement/wealth plan whether that be 401k or any other means. I wouldn't be giving him this massive amount of money to invest in other stocks or other funds.

I know they need to get paid but thought it was a little much just to set up a financial plan and wanted to get opinions from others on whether or not it was standard practice or not.


Shepherd88
Member since Dec 2013
1767 posts

re: Northwestern Mutual Financial Advising
So I'm assuming he's a CFP and charging to use such? If he puts this plan in force, is he going to manage the investments as well? Or advise how they should be structured at vanguard, 401k, etc?


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lynxcat
Rutgers Fan
Member since Jan 2008
18524 posts

re: Northwestern Mutual Financial Advising
I have a buddy that works there and does this kind of stuff. I've seen the plans they build and I wasn't personally impressed. To be fair, I have a firm grasp of my personal finances and broader finance topics so I may be the exception.

$1,500 is a lot and you better be in a place of utter financial confusion for that to make any sense. That's an expensive safety blanket that you probably do not need.

Also, this is their in for selling you on a host of products. Once you open the kimono you can expect they tell you a variety of insurance products you need and how an annuity is a great place to store your money. I would avoid all of that if you already have disability and life policies that meet your family needs.

I strongly prefer fee only advisors with fiduciary responsibility. I do not want my financial guy or gal making extra money based on what products I purchase.
This post was edited on 1/27 at 11:49 am


AUtigerNOLA
Auburn Fan
New Orleans, LA
Member since Apr 2011
15369 posts

re: Northwestern Mutual Financial Advising
From my experience dealing with NWM, I don't think it's standard practice. My buddy has never asked me for a dime in fees. I think you are correct that it's a little much.
This post was edited on 1/27 at 11:50 am


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Phil
LSU Fan
Member since Jun 2010
227 posts

re: Northwestern Mutual Financial Advising
I wouldn't say I am in total financial confusion but I just want to make sure I am setting everything up while I am somewhat young (29) to be set for the future. Right now I have 1 mil life for me and 500k life for my wife with them (the cost difference was small). I pay into my work 401k and she will have a teacher pension.

I guess it would be more of a safety net for them to put together a packet. I don't know. I just want to make sure I am doing what needs to be done now to be successful for the future.


Hawkeye95
LSU Fan
Member since Dec 2013
20293 posts

re: Northwestern Mutual Financial Advising
quote:

I know they need to get paid but thought it was a little much just to set up a financial plan and wanted to get opinions from others on whether or not it was standard practice or not.


Fee for financial planning is very common and not an unwise investment if you don't feel comfortable doing it yourself.

$1500 sounds somewhat steep to me though, but I guess it depends on what it includes. What would bother me is he probably will be paid a commission on what he recommends. I believe he is required by law to tell you if he is going to get paid commissions, so ask that up front - what types of things do you normally recommend? Can I get an example report? How are the ways you get paid?

I personally wouldn't pay someone with northwestern mutual to do this. If you have enough $$, you can normally get someone to do basic planning for you for free if you invest in their account. I am pretty sure Schwab will do this if you have over $200k there.


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lynxcat
Rutgers Fan
Member since Jan 2008
18524 posts

re: Northwestern Mutual Financial Advising
Does the free option not get you enough information to start feeling better? This board does a pretty great job of laying out the basic things everyone needs to do and the order to do them in. Unless you have some complications, then I wouldn't over think it.


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Hawkeye95
LSU Fan
Member since Dec 2013
20293 posts

re: Northwestern Mutual Financial Advising
quote:

Right now I have 1 mil life for me and 500k life for my wife with them (the cost difference was small).

this seems excessive, do you have children?
quote:

I guess it would be more of a safety net for them to put together a packet. I don't know. I just want to make sure I am doing what needs to be done now to be successful for the future.


Its probably better in the long term to learn the basics yourself. And you can ask a question here, or on reddit.com/r/personalfinance

Most of it is pretty basic, and easy to learn. There are thousands of books on the subject. I would be surprised if your work 401k doesn't have financial planning as a benefit.


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AUtigerNOLA
Auburn Fan
New Orleans, LA
Member since Apr 2011
15369 posts

re: Northwestern Mutual Financial Advising
quote:

I wouldn't say I am in total financial confusion but I just want to make sure I am setting everything up while I am somewhat young (29) to be set for the future. Right now I have 1 mil life for me and 500k life for my wife with them (the cost difference was small). I pay into my work 401k and she will have a teacher pension



With all this already in place I don't see a need to pay that fee at all. There's some other options you can go but not worth a $1500 fee


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
9358 posts

re: Northwestern Mutual Financial Advising
A couple of thoughts:

1) A fee for a financial plan that is agnostic as to where you house the investments and doesn't involve any ongoing management, is not that uncommon at all. A number of financial advisory firms will do it. Often, it's for younger people, and while they charge a fee for their time, it's a lot of the same work they do for their investment clients. And the idea is that, one day you will need an investment advisor, and you will remember them. $1500 is a decent chunk of change so I would need to know more about what they will do in order to see if this is a good investment or not.

2) I am a big fan of Northwestern Mutual. I have life and disability through them. I know a number of their guys and gals and I have a lot of respect for them, and for the products they have. Their life products are without comparison, and their DI is also very, very good. And while I don't have any personal experience with Long Term Care, I hear their product is also in the cream of the crop.

Having said all that, they are insurance salesmen. Very good insurance salesmen with very good products, but they are insurance salesmen. They can brand themselves as Financial Advisors, make them sit for the Series 66, whatever. It doesn't change the fact that they are insurance salesmen. They may know just enough about financial planning to understand the theory of replacement (i.e. if you die / get hurt, how do you/your heirs get the money to continue the same standard of living) but they are not true investment guys or true planning guys. AND even if you do find one that is a CFP, you can best believe he's only going to be presenting you options that make him a commission. That's the model they know, again, because that's the insurance model.

I would not pay $1500 for one of their guys to do this.


matthew25
Ole Miss Fan
Member since Jun 2012
7123 posts

re: Northwestern Mutual Financial Advising
I paid $250 for Vanguard to provide a comprehensive retirement plan.


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Old Money
New York Yankees Fan
Miami
Member since Sep 2012
17175 posts

re: Northwestern Mutual Financial Advising
Just giving my honest opinion, NWM will hire just about anyone that can sell (I briefly worked with one of their competitors.) It's a sales role first. I'd talk with someone who has their CFP or works with a company this isn't insurance-sales based first. Most of those guys really do not know what they are doing.
This post was edited on 1/28 at 11:16 am


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MNCscripper
USA Fan
Alligator Bayou
Member since Jan 2004
9228 posts

re: Northwestern Mutual Financial Advising
My cousin works for NWM, he's a few years out of college. He's called me a few times over the last couple weeks to come in and sit down with him to discuss how to "reduce my tax risk".


Ric Flair
LSU Fan
Charlotte
Member since Oct 2005
8943 posts

re: Northwestern Mutual Financial Advising
If he charges you and recommends no load funds thru vanguard, might not be a bad option, but you can get the info for free from the Internet.

If he charges you up front and recommends loaded funds like American Funds, I would be pissed.

I bought disability insurance from them, and the broker was trying to talk me into other investments, whole life, etc. I declined everything except the disability insurance.


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juice4lsu
LSU Fan
Member since Dec 2007
3443 posts

re: Northwestern Mutual Financial Advising
You need to find a team of advisors, with at least 1 CFP designation.

Anyone who wants to charge you for a plan you should run from.

They should provide a full analysis and plan in a effort to build value and win your business.

I suggest getting several opinions.


Janky
LSU Fan
Team Primo
Member since Jun 2011
19292 posts

re: Northwestern Mutual Financial Advising
quote:

Anyone who wants to charge you for a plan you should run from.


I don't agree with this.


ridlejs
Member since Aug 2011
45 posts
 Online 

re: Northwestern Mutual Financial Advising
Agreed. The plan is the centerpiece of the whole thing. The folks that are throwing in one for "free" are happily charging you fees within your funds to pay for that plan and then some. The problem with the industry IMO is that people don't know what they are paying their advisor. Once they figure that out, they start asking what they are getting for that price; which usually isn't much compared to what they are paying.


jeepfreak
LSU Fan
Back in the BR
Member since Oct 2003
19367 posts

re: Northwestern Mutual Financial Advising
quote:

sit down with him to discuss how to "reduce my tax risk".



I'll save you the time and trouble of the meeting: he wants to sell you a whole life policy.

That being said, if you are in the top 10% of earners, this may be a viable option. If you aren't, there are better places to put your money.


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