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re: Are financial planners full of shite? Should I trust them?
Posted on 6/17/25 at 7:28 am to DrSteveBrule
Posted on 6/17/25 at 7:28 am to DrSteveBrule
quote:
The average financial advisor takes a large annual fee, think around 1.5%, to put you in some index or mutual funds that you could have done yourself with about 3 hours of research.
You also risk them putting you in funds that have large frontload fees or large expense ratios while you could have just opened up an account with Vanguard, Fidelity, or Schwab and put your money in better funds with miniscule fees.
This. I’d add that the 1% or so fee will really cost you over time. If your portfolio ends up in the seven figures it’s a couple hundred thousand or so lower than it would have been by self managing. And broad index funds are extremely easy to self manage.
Also that 1% a year they charge makes you have to work longer because it decreases the amount you can withdraw per year by about 25% under the 4% rule. Say you have $1,000,000 portfolio. Per the 4% rule you can safely take out $40,000 a year every year adjusted for inflation. But if your advisor gets 1%, or $10,000, per year then you can only take out $30,000 per year.
1
Posted on 6/17/25 at 7:35 am to N2cars
quote:
I've got to set up some irrevocable trusts for some assets and philanthropic directives.
You'll need an attorney for those items. Talk to family or friends to find an estate attorney. It will cost you but better to pay for the right plan upfront.
As far as investments, anyone can do it with low cost mutual funds/ETFs and save a bundle over your lifetime.
This post was edited on 6/17/25 at 7:36 am
Posted on 6/17/25 at 7:35 am to Slippy
In regards to financial planners, I don't take financial advice from people that make less than me. I seek advice from people that make more than me.
Posted on 6/17/25 at 7:37 am to NBR_Exile
quote:
estate attorney
Yep, I've just to figure out what goes where, from a tax perspective.
Posted on 6/17/25 at 7:39 am to Finch
quote:
Mine is pretty amazing. He’s a great friend and I trust him 100%
That’s the worst kind. You trust him implicitly and he knows you probably won’t question anything he does.
Posted on 6/17/25 at 7:45 am to BottomlandBrew
quote:
I seek advice from people that make more than me.
So Elon, Bezos, Buffet & Gates?
Posted on 6/17/25 at 7:46 am to N2cars
Every situation is different. Can't give specific advice without more knowledge. I am not a financial planner. I just keep my money at Schwab in very low cost ETFs. I can call my guy at Schwab for insight and it costs me nothing.
For trusts and such you need to find an attorney. Also have a CPA handy for any tax details. Fortunatly for me I have a friend CPA that helps with tax stuff allthough my finances are pretty bland with a mid 7 figure balance.
For trusts and such you need to find an attorney. Also have a CPA handy for any tax details. Fortunatly for me I have a friend CPA that helps with tax stuff allthough my finances are pretty bland with a mid 7 figure balance.
Posted on 6/17/25 at 8:01 am to Traffic Circle
quote:
So Elon, Bezos, Buffet & Gates?
In my case, I talk with other business owners who are more successful than me. What they do now, what they would have done differently, what offers the best asset protection and tax advantages, planning for kids, etc. I own several businesses, and I'm lucky to know many other business owners who do a lot better than me and are willing to share their experiences with me.
Posted on 6/17/25 at 8:08 am to GEAUXT
quote:
VTSAX and chill. Advisors, even good ones, are a waste of money unless you have very complex financial needs.
This is the only advice you need if you don’t want to learn about investing.
Google that first sentence.
Posted on 6/17/25 at 8:11 am to Slippy
Most of the people I knew in college who became "financial planners" were dumbf*cks who partied way too much in college. They got some sort of general studies or general business degree and then went and got a job with some low-rent “financial planning" firm essentially trying to sell crappy insurance products to their friends and family. I can’t think of one I would trust my money with.
Posted on 6/17/25 at 8:25 am to Slippy
Whether you can trust them, and whether they are good for your financial situation are separate issues.
Posted on 6/17/25 at 8:30 am to OceanMan
Yes. Everyone’s financial situation is different. Some people in here saying there’s no need for a planner are not accounting for the fact that some people are worth a ton of money and have complex financial situations and need some help.
Now I do understand the sentiment that a lot of these planers are just glorified salesman.
Now I do understand the sentiment that a lot of these planers are just glorified salesman.
This post was edited on 6/17/25 at 8:33 am
Posted on 6/17/25 at 8:36 am to Slippy
quote:
Should I trust them?
No, but they do 2 things really well.
First, they’re very good at underperforming the market.
Second, they’re great at convincing you they’re doing an amazing job.
Unless you are clueless or have an incredibly complex investment situation, avoid them.
This post was edited on 6/17/25 at 8:47 am
Posted on 6/17/25 at 8:45 am to SaintsTiger
Ours is simple. In a bank ira at 4%. No worries, unless banking collapses.
Posted on 6/17/25 at 8:50 am to Slippy
Make a budget
Prioritize paying off debt (if interest is involved)
Put away as much as you can after that (401k up to company match for free money, Roth IRA, index funds, etc.)
Long term, nothing will beat a good S&P fund, I use Vanguard
You can do this without giving someone a commission.
If you have a ton of properties or ownership in multiple businesses, even moreso if they're across state lines, a financial planner can make sense. But if your finances aren't that complicated, I think they're a waste of time and money.
Prioritize paying off debt (if interest is involved)
Put away as much as you can after that (401k up to company match for free money, Roth IRA, index funds, etc.)
Long term, nothing will beat a good S&P fund, I use Vanguard
You can do this without giving someone a commission.
If you have a ton of properties or ownership in multiple businesses, even moreso if they're across state lines, a financial planner can make sense. But if your finances aren't that complicated, I think they're a waste of time and money.
This post was edited on 6/17/25 at 8:55 am
Posted on 6/17/25 at 8:55 am to NBR_Exile
quote:
Do not give them the keys to the car. You can do it yourself. Research the Three Fund Portfolio. Put your money in Schwab, Fidelity or Vanguard. Buy broad index funds and sit and wait and save the few percent he/she will likely charge.
How do I say this nicely? Most responses on this topic have no clue what a real financial planner does. It's not about picking the best fund or stock that gives a good return.
A real financial planner provides consultation on managing life events, taxes, tax implications, different investment vehicles, i.e. qualified vs. non-qualified funds, managing those different pots of money, business succession planning, etc.
Posted on 6/17/25 at 9:26 am to Bestbank Tiger
quote:
Make sure they're a fiduciary.
This, most of them are glorified insurance salesmen.
TBH, you're better off just putting your money in an index fund, you'll outperform 99% of advisors and the fees are almost non existant compared to what an advisor charges.
Posted on 6/17/25 at 9:35 am to TDTOM
quote:
I have never seen a financial plan that doesn’t say you need more life insurance.
I have. My current FA never once suggested it. And no, he doesn't sell insurance products.
Posted on 6/17/25 at 9:36 am to Defenseiskey
quote:
TBH, you're better off just putting your money in an index fund, you'll outperform 99% of advisors and the fees are almost non existant compared to what an advisor charges.
What happens if the market corrects, by say, 40%?
Posted on 6/17/25 at 9:42 am to Enadious
quote:
What happens if the market corrects, by say, 40%?
You probably lose even more as actively managed funds historically do worse. They tend to be too leveraged.I've met lots of companies and advisors say they have the "magic touch" or that they know something that others don't and they never do. Michael Berry's fund, for example, hasn't really done anything better than an index since he made that bet against housing.
This post was edited on 6/17/25 at 9:53 am
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