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Thinking about getting a personal financial advisor through Vanguard. Concerns?
Posted on 7/25/16 at 5:35 am
Posted on 7/25/16 at 5:35 am
My company partners with them for managing 401(k) funds, so I think I get a discount on Personal Financial Advisor/Planner services. If not, it'd be simpler anyway since I'm already familiar with website and tools format.
Anyway, I was going to shop around for a personal financial advisor/planner anyway, so I figured I'd just go this route as a base-case. That said, I recognize that some of these big firms specialize in certain things (e.g. retirement, portfolio management, insurance, really conservative approaches only, etc.), and I'm not sure if Vanguard has a reputation suited for the sort of thing I'm looking for in a financial planner/advisor, or if I should be looking elsewhere.
I'm primarily looking for portfolio management services, advise on financial planning and the associated allocation of cash resources, and other general long-term planning advice (e.g. should I pay cash for x vs. finance, am I saving enough for retirement, etc.)? Is Vanguard suited for this, or should I be looking more at the MerrillLynch's, etc of the world (or smaller firms)?
Anyway, I was going to shop around for a personal financial advisor/planner anyway, so I figured I'd just go this route as a base-case. That said, I recognize that some of these big firms specialize in certain things (e.g. retirement, portfolio management, insurance, really conservative approaches only, etc.), and I'm not sure if Vanguard has a reputation suited for the sort of thing I'm looking for in a financial planner/advisor, or if I should be looking elsewhere.
I'm primarily looking for portfolio management services, advise on financial planning and the associated allocation of cash resources, and other general long-term planning advice (e.g. should I pay cash for x vs. finance, am I saving enough for retirement, etc.)? Is Vanguard suited for this, or should I be looking more at the MerrillLynch's, etc of the world (or smaller firms)?
3
Posted on 7/25/16 at 7:08 am to PenguinNinja
Vanguard personal advisor will probably do a fine job with allocation of investments among there diversified and frugal family of funds. I am not sure how much help they will provide for other areas of your personal financial planning such as insurance, real estate, etc.
Posted on 7/25/16 at 7:30 am to PenguinNinja
Are you just hoping since your company uses them they'll hook you up? When I called to get some help setting up my account they did that, but if I asked any kind of specific question they basically said if you don't have about 50Gs with us we can't talk.
Posted on 7/25/16 at 9:17 am to PenguinNinja
If you get set up with them, can you let us know how it goes?
Posted on 7/25/16 at 9:57 am to Brettesaurus Rex
quote:
When I called to get some help setting up my account they did that, but if I asked any kind of specific question they basically said if you don't have about 50Gs with us we can't talk.
I confirmed with them today that I'd have enough invested to have an assigned advisor, but unfortunately he said what the previous poster mentioned: basically, they'd only manage a portfolio of Vanguard funds, and couldn't do much else.
I guess I could still do that and seek the other guidance from elsewhere, but I'd sure prefer an advisor who can provide the guidance AND manage my portfolio.
Am I expecting too much?
Posted on 7/25/16 at 10:24 am to PenguinNinja
quote:No but you aren't going to get full service/advice from a discount brokerage firm. That's just not their model. And the good ones know what they do well and stick to it. Kudos to Vanguard for not trying to oversell the services offered.
Am I expecting too much?
Posted on 7/25/16 at 10:53 am to PenguinNinja
quote:
Am I expecting too much?
Yes. I don't know where you are going to find someone that is going to give you advice on what to finance and what to pay for. At least not professionally. Most financial advisors are making their money off of a percentage of your total portfolio, percent of anytime you buy or sell, or a combination. A transaction has to happen for them to make money.
Furthermore, I don't think your typical equities manager is someone you want giving you advice on your money outside of how to invest in the equities.
If your net worth is over $5 million, you will probably be able to get more "free" advice if you have most of it with someone.
Managing your retirement is really pretty simple. You can learn how to manage it very well in a good day or two of reading a good book or 2. Just save 15% or more of your true gross income and you should be good to go if you will live within your means at retirement.
Posted on 7/25/16 at 11:53 am to baldona
quote:
If your net worth is over $5 million, you will probably be able to get more "free" advice if you have most of it with someone.
You don't need to get to $5M. Charles Schwab gives you an adviser if you have over 500k with them. And then you get more service when you get to a Mil, two mil, etc. Mostly around frequency of reach out to you.
The one thing you have to ask them on any advice is - to you get paid if I do this.
to the OP, why not just pay someone to do this? Fee for financial planning is a reasonable thing to do.
This post was edited on 7/25/16 at 11:55 am
Posted on 7/25/16 at 1:43 pm to Hawkeye95
quote:
You don't need to get to $5M. Charles Schwab gives you an adviser if you have over 500k with them. And then you get more service when you get to a Mil, two mil, etc. Mostly around frequency of reach out to you.
I wasn't being serious, but in order to get any actual meaningful advice you need a decent net worth. Yeah guys will talk to you and suggest this and that, but if your net worth is under $1 million or 2 they going to be pushing a lot of things that make them the most money over what is actually best for you because they are in it to make money too.
That's not to say you won't get a lot of help and advice. Just be prepared that they are doing business and trying to make money themselves when they are assisting you.
Posted on 7/25/16 at 2:48 pm to baldona
quote:
I wasn't being serious, but in order to get any actual meaningful advice you need a decent net worth. Yeah guys will talk to you and suggest this and that, but if your net worth is under $1 million or 2 they going to be pushing a lot of things that make them the most money over what is actually best for you because they are in it to make money too.
That's not to say you won't get a lot of help and advice. Just be prepared that they are doing business and trying to make money themselves when they are assisting you.
i don't think that goes away when you get to 5M.
Posted on 7/26/16 at 5:28 am to dirtsandwich
quote:
you aren't going to get full service/advice from a discount brokerage firm
This is why I was asking, thanks. I'm new to this, and didn't realize Vanguard was considered "discount".
So, who are the "non-discount" brokerage firms that I could look at that may do this?
Or am I better off looking into a small, local outfit?
Posted on 7/26/16 at 5:31 am to Hawkeye95
quote:
why not just pay someone to do this? Fee for financial planning is a reasonable thing to do.
It's looking like that's the route I'll end up going.
Any idea what the going rate is for fee-only financial planning consultations in $/hr?
Posted on 7/26/16 at 6:58 am to PenguinNinja
Hourly fees from a CFP are usually in the $100-$200/hr. range, depending on experience. A typical comprehensive financial plan will take a planner anywhere from 12-20 hrs. depending on how deep they dig into your things.
Hope that helps.
Hope that helps.
Posted on 7/26/16 at 10:03 am to ridlejs
It does, thanks.
Rather than paying for a comprehensive financial plan, could I just pay him/her for 2-3 hours to go through my finances (pretty simple really) and make some recommendations in response to some choices I have? Or is there typically a minimum obligation?
Rather than paying for a comprehensive financial plan, could I just pay him/her for 2-3 hours to go through my finances (pretty simple really) and make some recommendations in response to some choices I have? Or is there typically a minimum obligation?
Posted on 7/26/16 at 12:17 pm to PenguinNinja
It probably depends on the advisor. Some planners might not feel comfortable giving advice without seeing the entire picture because of how inter-related all the parts are.
I would look at Napfa.org and contact some of the fee-only guys in your area. You can get a good idea of the advisors target market just by looking at their website. People who only want to deal with high-net worth ($1 mil and above in investable assets) will make that clear on their website.
Btw, fee-only means they don't receive any commissions from the products they recommend. It's not a perfect system but at least you know what you are paying for and they can be objective when it comes to recommendations.
I would look at Napfa.org and contact some of the fee-only guys in your area. You can get a good idea of the advisors target market just by looking at their website. People who only want to deal with high-net worth ($1 mil and above in investable assets) will make that clear on their website.
Btw, fee-only means they don't receive any commissions from the products they recommend. It's not a perfect system but at least you know what you are paying for and they can be objective when it comes to recommendations.
Posted on 7/26/16 at 1:38 pm to Hawkeye95
quote:
i don't think that goes away when you get to 5M.
No but unless you are in a big city a $5mil client is pretty big and will be a big loss if they leave you. I have a couple FP's in my family and they only have a couple clients over $10 mil and they kiss up to them big time including flying to their location, etc.
All I was saying was really any professional over the age of 45 or 50 is going to have a $500k+ net worth most likely, they certainly should. That is the base of their clients and their pay. If all he is looking at is basic stock and portfolio information there is nothing wrong with going to them at all.
I would guess the avg. FP spends 2-3 hours a year with most clients and that is worth around 1% of their investments together. I think the OP will have a difficult time getting one of them to sit down for less than $1000 as everyone would be better off just spending $200 every 2 years rather than have a full time FP working for them. But that's just a guess.
This post was edited on 7/26/16 at 1:39 pm
Posted on 7/26/16 at 10:02 pm to baldona
I did the Vanguard advisor thing and paid $250. Had to fill out financial info and submit.
The advisor was knowledgeable and I could tell he studied my info. The advice was fairly cookie-cutter, but maybe that is all anyone actually needs. I can now call him directly with any Vanguard-related questions and to bounce ideas.
T. Rowe also has an advisor service.
The advisor was knowledgeable and I could tell he studied my info. The advice was fairly cookie-cutter, but maybe that is all anyone actually needs. I can now call him directly with any Vanguard-related questions and to bounce ideas.
T. Rowe also has an advisor service.
Posted on 7/26/16 at 11:02 pm to ridlejs
12-20 hours to plug a few figures into the corporate algorithm. 
Posted on 7/27/16 at 6:47 am to lynxcat
I'm not some CFP defender but I think he's referring to more in depth planing than simply tossing your 401k into a few funds. Tax planning, estate planing, college funds, etc.
Posted on 7/27/16 at 10:46 am to Lou Pai
quote:
I'm not some CFP defender but I think he's referring to more in depth planing than simply tossing your 401k into a few funds. Tax planning, estate planing, college funds, etc.
I don't have a CFP but is tax planning and estate planning not usually done by a CPA and tax attorney? A CFP could certainly help, but if you have a CPA they would be the ones to ask for that.
Along those lines though, if the OP is not using a CPA at this time it may be a good first step. Get some advice from them and then any gaps you may have could be filled in by a CFP.
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