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re: Are financial planners full of shite? Should I trust them?
Posted on 6/17/25 at 9:47 am to Bestbank Tiger
Posted on 6/17/25 at 9:47 am to Bestbank Tiger
quote:
good firms have tax lawyers in house
1."Fiduciary" is the most overrated term in the industry-asking me how I know.
2. Companies do have attorneys working as consultants. They aren't "in house" tax planners. They are there to help sell.
Just because FPs "sell" doesn't mean they they're good or bad. Whether they are fee-only, insurance focused, etc...they still don't get paid if you don't do business with them.
0
Posted on 6/17/25 at 9:52 am to UltimaParadox
1. I've never seen a "fee-only" planner driving a Civic
2. The lines between Insurance salesman" and "Financial Advisor" are blurrier than ever. All the major brokerage houses and insurance companies now do a little of everything. The one thing they have in common: they DGAF about you!
3. "Fiduciary standards" aren't worth a shite. "Right for the client" is subjective
Posted on 6/17/25 at 9:52 am to Slippy
quote:
I would like to retire without being consigned to perpetual poverty.
You don't need a financial planner for this.
Posted on 6/17/25 at 10:04 am to Enadious
quote:
What happens if the market corrects, by say, 40%?
Market efficiency (as defined Fama, Nobel Prize winner) means your advisor (or anyone else) doesn't have access to a vehicle that will avoid the 40% loss (presuming you mean equity market in your question above).
If anything, an advisor would make one's loss GREATER than 40% in your scenario, as his fees are an additional drag on performance. If your advisor tells you to embrace emotions in investing, that's a bad advisor. Investing isn't emotional and a major swing shouldn't affect your long term plans.
The most important things in investing success are defining your asset allocation for your age & risk tolerance AND staying invested throughout the normal ups and downs (time in the market). A 40% drop would be a buying or rebalancing opportunity, certainly not a time to jump off the roller coaster. As long as you stay invested in equity for any 10-year period over the last 60 years, you're always ahead.
If you cannot figure out asset allocation with the resources in this thread, that's the only value an advisor brings, but that's a flat fee engagement. Only suckers pay a percentage these days.
Owning (and buying more) index funds through 2007- 2009 and 2020 - 2025 would have made you pretty darn rich, at far less risk than avoiding equities altogether or trying to time the market and selling at the bottom. Taking less equity risk would be an emotional response that makes you much poorer long term.
Edit: Active management doesn't/cannot beat the index over the last ~100 years because of market efficiency, anyone telling you otherwise is a huckster.
This post was edited on 6/17/25 at 10:09 am
Posted on 6/17/25 at 10:18 am to Slippy
I never considered one, always thought they were con men or for rich people only, but I know an old boy who worked with one through his companies benefit plan and despite having made less than $100k a year retired pretty comfortably at 57 even after getting divorced at 55 and losing half of everything. He ain't jetting off to Paris for dinner but he does spend an inordinate amount of time in Steinhatchee and at his lake lot on his boat with his dogs....there's worse ways to spend one's days. He has VA healthcare which made it possible but dude is living the dream for most of us....and he swears the financial planner was integral to it.
Posted on 6/17/25 at 10:21 am to Slippy
No, they aren't full of shite.
However, they charge you can do on your own with minimal common sense.
Just put your $ in low cost etfs (like VOO)
However, they charge you can do on your own with minimal common sense.
Just put your $ in low cost etfs (like VOO)
Posted on 6/17/25 at 10:23 am to Slippy
I took some money out of several small retirement accounts recently because I am building 2 spec houses and don't want to carry financing for the period of time its going to take with me working full time to finish them. More than willing to take the tax hit as its always going to be at the upper limit if we ever take it. Had to have some paper work notarized for 2 of them and the banker was adamant it was a mistake and I should let her roll it over and let them manage it LOL. And she was probably right for the most part but when these 2 houses are done the taxes will be about a push and they will be worth a pile more than what its costing me to build them, even if the market slows down considerably. She wanted that money bad though....no doubt commissioned. Some in the industry are all about trading your money for the fees....some are legit
Posted on 6/17/25 at 10:25 am to MyRockstarComplex
quote:
Their job is to sell you stuff. They seem to really like selling whole life policies.
You can find fee-only financial planners that you pay by the hour like attorneys or accountants. They are the only financial planners available who have a fiduciary duty to their clients. There is no way in hell I’d be able to trust one who gives free advice and is compensated by selling me shite. This link seems to explain the difference. LINK
Posted on 6/17/25 at 10:32 am to Tigerfan4545
quote:
Some financial advisors put you in investments that make them commissions whether you win or lose…
If you want to get really pissed off take a look at your retirement savings, anytime you like, doesn't matter what is going on in the world or who the president is. It'll most likely look pretty good. Now calculate how much of that money came out of your compensation package during your career. All of a sudden most people will want to take to the streets with torches and pitch forks and round up fund managers. Keep in mind that the matching portion is earned as part of your salary just like the portion you had withheld. I have been saving for retirement for the last 42 years and have always maxed my portion out to get the maximum match. Its a lot of money today. Over that period of time it has grown about 2% a year....almost all of it is the money I had withheld and the matching portion by my employers. It has averaged around 9% year to year BUT between dips in the market AND fees almost all of it is the same amount I have earned by working, not through investments. I have always kept it in low risk funds because I always felt it was a bad idea to gamble with money I could not afford to lose. My wife does not subscribe to that logic and in a few years less hers has done slightly better but not by much. These are all in recognized funds.....and they don't charge much for transactions and fees BUT they do it steadily and with malice and forethought LOL...and over time it adds up.
Posted on 6/17/25 at 11:02 am to SoDakHawk
quote:
How do I say this nicely?
No offense taken. I see it as anyone with some sense can handle it by themselves. Maybe others weren't taught the basics like my parents did.
I'll plot it out.
Stay out of debt
Get a job and put some away in a 401k or in a savings or taxable account.
Get married and start pooling cash.
Grow a nest egg to provide for the eventual life experiences.
Buy some term life at this point to cover his/her income.
After the brood has started put some away for college.
This all seems basic but I failed to mention to cook at home as much as possible. It creates family time and a closeness you will not get back,
Posted on 6/17/25 at 11:18 am to NBR_Exile
Advisor fees can be a major drag on long term portfolio growth. However, a good advisor may keep you from emotionally ruining your portfolio by panic selling or chasing returns, penny stocks etc. If you are intelligent and disciplined you can build a large nest egg unassisted. Later you can pay a pro for advice (optimally by the hour or session) when taxes, estate planning and withdrawal strategies get more complex.
I'd say start with reading J.L. Collins' book 'The Simple Path to Wealth'. If you think you can understand and follow it, don't pay for advice.
I'd say start with reading J.L. Collins' book 'The Simple Path to Wealth'. If you think you can understand and follow it, don't pay for advice.
This post was edited on 6/17/25 at 11:32 am
Posted on 6/17/25 at 11:29 am to TorchtheFlyingTiger
Great book, My point was all takes is a little common sense to grow the nest egg.. The first rule is to start putting some away. Live below your means for awhile and stockpile your cash for bit.
Posted on 6/17/25 at 11:33 am to pelicanpride
quote:
They are the only financial planners available who have a fiduciary duty to their clients.
This is false. Asset based fee advisors also have a fiduciary duty it’s just not automatic.
Posted on 6/17/25 at 11:40 am to BamaAlum02
Good point.
The ones that trouble me most are those that dual hat and act as non fiduciary when pitching insurance products etc. , acting as fiduciary one moment and a salesman the next.
The ones that trouble me most are those that dual hat and act as non fiduciary when pitching insurance products etc. , acting as fiduciary one moment and a salesman the next.
Posted on 6/17/25 at 11:43 am to East Coast Band
quote:
Seems like this is something AI would be a breeze at in helping the general public
I don't know why you got downvoted. I actually fed ChatGPT a photo of my checking account just to see what it could do and it will categories each charge, then give you a summary of how much you spend on each category.
It asked if I wanted to go further. It will give suggestions one where you can cut spending, etc.
Posted on 6/17/25 at 11:44 am to Slippy
quote:
Are financial planners full of shite? Should I trust them?
Look them up on people search and find their house online. That should tell you if they're good at what they do.
Posted on 6/17/25 at 11:49 am to LSU Grad Alabama Fan
"Good at what they do" for most of them is sales. The worst advisors may be well off or at least have the trappings of being so at the expense of their clients.
Posted on 6/17/25 at 11:52 am to OweO
I down voted because I recently asked Grok a simple retirement account tax question (after reading a post with bad info). The response came back incorrect and I verified against actual IRS site and IRS publication links. Anything beyond basic personal finance advice, I wouldn't trust AI just yet.
Posted on 6/17/25 at 11:56 am to AwgustaDawg
quote:
I took some money out of several small retirement accounts recently because I am building 2 spec houses and don't want to carry financing for the period of time its going to take with me working full time to finish them. More than willing to take the tax hit
Further proof you’re an absolute moron
Posted on 6/17/25 at 11:57 am to TorchtheFlyingTiger
quote:
Anything beyond basic personal finance advice, I wouldn't trust AI just yet.
Understood.
Yeah, I wasn't planning on using it, I was just seeing its capability and it definitely can be helpful for personal finances, but even then its not absolute.
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