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When/How to choose a professional to help with finances
Posted on 3/31/14 at 10:32 am
Posted on 3/31/14 at 10:32 am
I graduated from anesthesiology residency last July and haven't yet been set up with a financial advisor. Mostly because I didn't feel a need to. However, now that I've been out for 9 months, It's become pretty obvious to me I need some help.
I talked to a partner in my group and he said he could set me up with the guy he uses. He uses a guy from Merrill Lynch. I trust my partner and he gives this guy very high praises.
Also, as a newbie what kind of questions would I need to ask a financial professional? What should I look for from them?
My situation is as follows:
30 years old, single, no children.
No debt - thanks to scholarships to LSU and medical school.
Truck paid off.
I basically still live like a resident - one bedroom apartment, no new major purchases since graduation. It's actually probably cheaper now as cost of living in Beaumont is less than it was in Nashville. I've got 125K stuck away in a savings account.
I've got a Fidelity retirement account from residency with a little over 12k in it.
I thought the money I was saving would be for a down payment on a house here in the near future (maybe another year or two), but my partner said I should finance as much as I can. So now I think I need to do something else with it. It's earning a whopping 0.0025% in that savings account.
ETA I can set up a retirement account with the group I work with after I've been there a year.
I talked to a partner in my group and he said he could set me up with the guy he uses. He uses a guy from Merrill Lynch. I trust my partner and he gives this guy very high praises.
Also, as a newbie what kind of questions would I need to ask a financial professional? What should I look for from them?
My situation is as follows:
30 years old, single, no children.
No debt - thanks to scholarships to LSU and medical school.
Truck paid off.
I basically still live like a resident - one bedroom apartment, no new major purchases since graduation. It's actually probably cheaper now as cost of living in Beaumont is less than it was in Nashville. I've got 125K stuck away in a savings account.
I've got a Fidelity retirement account from residency with a little over 12k in it.
I thought the money I was saving would be for a down payment on a house here in the near future (maybe another year or two), but my partner said I should finance as much as I can. So now I think I need to do something else with it. It's earning a whopping 0.0025% in that savings account.
ETA I can set up a retirement account with the group I work with after I've been there a year.
This post was edited on 3/31/14 at 10:38 am
3
Posted on 3/31/14 at 11:46 am to BeaumontBengal
What's the purpose of your money? How much risk are you willing to take? What investment vehicles are you comfortable with? Most imp what's your financial goals?
Ask the advisor his experience of course, and his investment philosophy for someone in your situation. Remember, as a FA, I would reiterate to you that we work for our clients so our number one goal is to make sure our clients(you) are comfortable with the plan, comfortable with the amount of risk and that they have a reasonable expectation for certain outcomes. If someone charges you more than 1.25% they are charging too much, esp if it's in a fee based account. Good luck.
Ask the advisor his experience of course, and his investment philosophy for someone in your situation. Remember, as a FA, I would reiterate to you that we work for our clients so our number one goal is to make sure our clients(you) are comfortable with the plan, comfortable with the amount of risk and that they have a reasonable expectation for certain outcomes. If someone charges you more than 1.25% they are charging too much, esp if it's in a fee based account. Good luck.
This post was edited on 3/31/14 at 1:05 pm
Posted on 3/31/14 at 12:41 pm to roguetiger15
Well said Rogue. A certified adviser has a fiduciary responsibility to their clients.
Basics you want to look for is how long has he been doing it. Also, what type of licensing/designations does he have (this isn't huge, but if the guy is a CFP, you know you are working with a quality guy).
Another thing to consider is how long is he going to be in the business. You are 30, If i'm choosing an adviser, I want him to be experienced, but I also want him to still be there when it is time for me to start withdrawing my money in retirement. If he is an older guy, figure out what his plan is for when he leaves the business. Who is your account going to go to?
Just a few things to consider as well, that may not get a lot of talk.
Basics you want to look for is how long has he been doing it. Also, what type of licensing/designations does he have (this isn't huge, but if the guy is a CFP, you know you are working with a quality guy).
Another thing to consider is how long is he going to be in the business. You are 30, If i'm choosing an adviser, I want him to be experienced, but I also want him to still be there when it is time for me to start withdrawing my money in retirement. If he is an older guy, figure out what his plan is for when he leaves the business. Who is your account going to go to?
Just a few things to consider as well, that may not get a lot of talk.
Posted on 3/31/14 at 8:01 pm to BeaumontBengal
If you go with Merrill, ask the FA about their 100% mortgage program with no PMI. Sounds like you're a candidate for it and you can keep your investments intact.
Posted on 3/31/14 at 10:25 pm to BeaumontBengal
My experience has taught me that the best approach is to have a team that includes a lawyer, and accountant and an investment advisor at the core. They should each serve a separate purpose with your benefit as their mutual concern. They will act as checks and balances on each other as well.
You should be looking at these as 20+ year relationships you are establishing. So consider the ages of anyone you meet with. Beaumont is close enough to Houston to consider advisors working in Houston, and Houston has some very talented professionals. Learn as much about them as you can. They will have personal goals. Try and make sure accomplishing their personal goals does not conflict with you accomplishing yours.
You should be looking at these as 20+ year relationships you are establishing. So consider the ages of anyone you meet with. Beaumont is close enough to Houston to consider advisors working in Houston, and Houston has some very talented professionals. Learn as much about them as you can. They will have personal goals. Try and make sure accomplishing their personal goals does not conflict with you accomplishing yours.
Posted on 4/1/14 at 1:00 pm to Poodlebrain
First off, congrats on graduating med school with no debt. Not easy to do. Most of your peers are putting an obscene amount of their monthly check back to the student loan companies.
I think you need to do some thinking about where you see yourself in 5, 15, 25 years. Any good advisor is going to ask you that at your first meeting. So think of it now.
Have you been admitted as a partner in this practice group, or do you think you will be in the next few years? How does the buy-in work? Do you need to set aside money for that, or will they finance your buy-in through reduced distributions for a few years?
I would interview a few people - get some references. I'd be looking for an investment person / financial advisor to help you figure out what to do with your money. I'd also consider getting a will drafted. You don't have a family so it's not as important now... but if you do or have an ownership interest, it will be important.
I don't have anything against ML reps, but personally, I prefer someone that is not tied to a particular brokerage. An independent person. It seems to me, both from my experience and experience with my clients, that some (not all) of the company agents tend to, shall we say, promote their company's investment vehicles perhaps over the needs of their clients. Not all of them are like this, of course, but it's something to watch out for.
The other thing that concerned me is your partner telling you to finance as much as you can. I think you will fine a lot of successful people on here would not necessairly agree with that strategy. There is no reason to tie up all your cash... but you don't want to have a ton of debt, either.
Good luck!!
I think you need to do some thinking about where you see yourself in 5, 15, 25 years. Any good advisor is going to ask you that at your first meeting. So think of it now.
Have you been admitted as a partner in this practice group, or do you think you will be in the next few years? How does the buy-in work? Do you need to set aside money for that, or will they finance your buy-in through reduced distributions for a few years?
I would interview a few people - get some references. I'd be looking for an investment person / financial advisor to help you figure out what to do with your money. I'd also consider getting a will drafted. You don't have a family so it's not as important now... but if you do or have an ownership interest, it will be important.
I don't have anything against ML reps, but personally, I prefer someone that is not tied to a particular brokerage. An independent person. It seems to me, both from my experience and experience with my clients, that some (not all) of the company agents tend to, shall we say, promote their company's investment vehicles perhaps over the needs of their clients. Not all of them are like this, of course, but it's something to watch out for.
The other thing that concerned me is your partner telling you to finance as much as you can. I think you will fine a lot of successful people on here would not necessairly agree with that strategy. There is no reason to tie up all your cash... but you don't want to have a ton of debt, either.
Good luck!!
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