<p>I really don’t care for financial planners. They seem to always have an angle. They want us always to hand them over money to invest for us when we could put the money into paying off our mortgage or deferring for retirement or a 529 for kids’ graduate school costs. And I’m not sure many of them are very astute on taxes.</p>
<p>So who is it that you can pay by the hour and get really good insights? Is there a name for that type?</p>
<p>Apologies to any financial planners out there. I may just be an idiot about this.</p>
<p>You’re looking for a fee-based financial planner.</p>
<p>Financial planning is a large, complex area of knowledge. Income tax (even the narrow realm of individual income tax) is a large, complex area of knowledge. It’s easy to find people who do both, but hard hard to find someone who’s really good at both.</p>
<p>Yes. And it includes stuff like legal insurance, dealing with elder-care issues, college expenses, hopes and dreams and other stuff that I can’t recall at the moment. I interviewed a financial planner a long time ago and was stunned that I knew a lot more about the financial markets than he did but he covered all of these other issues so I guess that it’s hard to be good at a bunch of things.</p>
<p>I have a very hard time trusting other people with my financial assets so I just pay for advice from someone that is very good at trading and that watches the markets and analyzes them full-time. I also get to chat with other sharp traders. I also follow two other guys that provide trading and investing advice for free.</p>
<p>It helps if you’ve taking some accounting and finance courses though. Bob Brinker advised investors to do a lot of studying on your own and I agree with this approach. I will buy services where I need them but I prefer trying to do much of it on my own.</p>
<p>I enjoy the boglehead forum. It makes me envious sometimes (ie “What to do with the $3Million from the sale of my company?”), but there are a lot of smart people there. [Bogleheads</a> Investing Advice and Info](<a href=“http://www.bogleheads.org%5DBogleheads”>http://www.bogleheads.org)</p>
<p>A fee-based financial planner who is also a CPA will have a handle on the tax implications of different investment plans. This is what we’ve done and the results have been far superior to the years when we used a financial planner who earned money on commissions.</p>
<p>Start by reading many of the personal finance and investment books in the library. Do not read just one, since you want to get an idea of what the range of different opinions on the subject there are out there.</p>
<p>Read some books, decide what you’re trying to accomplish, and THEN schedule six or seven initial (i.e., no cost) interviews with different Fee-Only Financial Advisors. It’s amazing how much can be learned without ever getting the answer to your OP. But it’s worth doing anyway … because at least you’ll have SOME knowledge.</p>
<p>[Explanation: You’re not trying to find “how to do it right” … but rather “how to do things so the result is positive more often than not.” Ignore anyone who says they have a foolproof system.]</p>
<p>What I’m finding is that some Fee-based Financial Planners want to waive the “fee” and charge you a percentage of the funds you invest with them and that they manage. And that feels wacky to me. </p>
<p>I like this idea of finding a fee only FP who is also a CPA.</p>
<p>And yes, first we do need to get really clear on our objectives and then prioritize them.</p>
<p>This getting mature and older thing is not for wimps!</p>
<p>They may be suggesting that you invest your money vs paying off your mortgage because investments earn more than the interest you are paying on your mortgage. If you have refinanced lately and are at say 3% interest and your investments are earning 6%, you are losing 3% of those funds every year. Those investments are also intended for retirement savings, depending on what they are suggesting and no planner worth his salt would EVER suggest funding a 529 plan without having your own retirement taken care of first, meaning that you are doing all you can to meet your retirement goals and then with any left over funds, funding a 529.</p>
<p>No matter what you do, you do pay a fee. You need to find someone that you like and trust. Ask questions, ask for referrals. Ask if they work with an estate planning attorney and a CPA, or if they have those qualifications themselves. Our planner has a team he works with that helps with areas outside his scope of expertise. I don’t expect him to know everything there is a LOT to know.</p>
<p>Quote:
What I’m finding is that some Fee-based Financial Planners want to waive the “fee” and charge you a percentage of the funds you invest with them and that they manage. And that feels wacky to me. </p>
<p>No, that is exactly what you want - IMO. If you do the math, and compare this cost to the cost of using a planner who’ll profit every time a financial transaction is made, you’ll pay much less with the fee-based planner. I know it sounds crazy but when you run the numbers, you’ll this to be the case. In the later situation, the fees are really hidden so it’s hard to know exactly what it is costing you. THis is why the fee-based method seems so expensive - you have no idea (unless you really dig) how much the guy is making off of your money. </p>
<p>Ours is a fee based planner so we know exactly what is fee is - in our case it is 1% over the course of one year. And remember, he only makes money if we make money. In the other method, the guy makes money whether or not you make money.</p>
<p>Well, I like these guys we’ve been talking to. They are used by several of my DH’s colleagues who are at the same level and compensation range at his employer. They seem to have a following. They seem to understand very well some of the compensation structures and so forth. I was a little thrown by the percentage on investment because it didn’t sound like the hourly fee type FP.</p>
<p>But I thought they knew stuff. They’ve been around about 20 years. </p>
<p>Hey, I’m a control freak, I’m beginning to realize. Hard to take this step. Every time we’ve consulted an accountant for taxes I end up doing them myself and finding errors by the CPA. Yeah . . . it’s a little problem, I have. :(</p>
<p>I’m the same way, sewhappy. I would never be able to invest with someone and give them control over my money, I would have to get advise and make the trades myself. I have been thinking lately about asking for advice on income investments, as we are happy with our stock investments but getting older and need to adjust the balance.</p>
<p>I had the exact same thought as dstark when I read that description. Sounds like the planner makes money in any case.</p>
<p>We got our fee-based financial planner through the recommendation of cc’er DougBetsy. Thanks, DougBetsy! He met with us twice and helped us to look globally at both our retirement and non-retirement investments, long-term needs and wants, including travel and even paying for our kids weddings, and to set a goal for when we can retire. We even had him meet with our son, who has stock options from his job, to help him get started on the right foot in terms of saving. He recommended consolidating into low cost ETFs and mutual funds, such as Vanguard. We felt very comfortable with his advice, and thought it was well worth the money we spent for the plan.</p>
<p>Another fan of Bogleheads here. I started by reading “The Bogleheads Guide to Investing” and then spent a lot of time on the Bogleheads forum reading and learning [Bogleheads</a> • View forum - Investing - Help with Personal Investments](<a href=“Personal Investments - Bogleheads.org”>Personal Investments - Bogleheads.org). I love the simplicity of their philosophy. The posters on that forum are very knowledgeable, helpful and friendly!</p>