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paying a financial advisor

December 11th, 2018 at 08:46 pm

So I've been doing 1 class at a time to be a Certified financial planner. It will cost $5000 to get the certificate. I enjoy the online classes. I'd like be a fee for service financial planner.

I had a phone call evaluation by personal capital today and they tried to sell me their services. It was absolutely rotten, horrible experience.

The website is great. I use it to track my spending and x-ray my investments. But I would NEVER pay 0.89% of the value of our portfolio to have them to tell me which 90 stocks to buy to replace Vanguard Total Index Stock market ETF. Let alone buy the SAME etf small cap (russell) and international, and real estate. Why would anyone?

I mean they have to beat the returns I get by a solid 1% not including all the trading fees and inefficient costs of BUYING and SELLING stocks. I got oh we know how to properly tax loss harvest. I said great so do I. And I don't need to do that since I don't take money out of my investments usually. I keep cash and hence why I have so much cash on hand so I can just pay for stuff like the car we are buying without cashing out our investments.

The woman was like oh you shouldn't have bonds or dividends outside an IRA. I was like I pay 15% mostly on our dividends. It's well worth it. Oh but if you put it in your IRA you won't pay any. Better off taking risk and having greater returns in IRA (especially Roth IRA) and not paying any taxes on large long term gains. Even 15% isn't bad on long term capital gains honestly.

It was such a miserable call. It was infuriating that she's basically trying to sell me 90 individual stocks that will "beat" the total vanguard stock index. That because I invest so heavily in the index I am too weighted in technology and not enough elsewise.

Yes if I let them manage my money they would keep techonolgy at 15% and buy 90 stocks to diversify and properly balance my large US cap investment. I can't imagine a worse sales pitch.

It made me hate idea of being a CFP if all you do is a sales pitch. Versus the idea of being fee based advisor who gives advice not to make money off commission or portfolio size.

Anyway it just left a super terrible taste in my mouth. She also said they would help me invest my DH's 401k, but when I pointed out why? There is limited optionsor investments why do I need advice?

Oh well it's a big picture thing. I told her I already did that and I rebalance my entire portfolio anyway based on his 401k because we can't pick our investments. So we have Bonds index and total stock market index in his 401k. Those were the lowest costs index.

UGH.

7 Responses to “paying a financial advisor”

  1. Homebody Says:

    My husband and I didn't feel comfortable managing ours so Scottrade, now TD Ameritrade manages ours but it is mostly in index funds. They do not buy individual stocks. I wish I was as comfortable as you. What about being a financial manager that helps people manage their budget too?

  2. creditcardfree Says:

    The truth is most people don't know as much as many of us here regarding their investments. I know I also wouldn't pay that fee, but yet, I do think a fee based planner would be the wisest choice if someone needed assistance with their finances. I know I looked into Ameriprise back in the late 90s. In the end I wasn't ready at that young age to put in the time it would take to build the business.

  3. My English Castle Says:

    Asset allocation is one thing, but people who say they can consistently beat the market are either delusional or lying. I worked in brokerage for 10 years and met a lot of both types.

  4. crazyliblady Says:

    I am sorry you had that experience. No, it does not have to be that way. I think the financial planner should get to know you, what your issues are, and your goals and plans before they make any recommendations. I always talk to the financial planner for my retirement company. If anything, they do not sales pitch. They advocate having a budget, getting out of debt, and having emergency savings. So not all financial planners are like the one you encountered.

  5. Smallsteps Says:

    I once was recruited by a company wanting me to become a CFP with them. Most of these companies have a certain $$ amount they want each CFP to be managing with deadlines to meet that goal and if you could not build up that base of clients you were out. I soon realized that it would require hard sales or preferably just being blessed with very wealthy clients.





  6. Jenn Says:

    I also use the Personal Capital application, but I've not accepted their invitations to talk about their services. Based on your experience, I'm glad I didn't.

  7. livingalmostlarge Says:

    I see it as someone reviewing if people are on the right track saving, investing (3 fund lazy portfolio), and able to retire at whatever their goal age. More like having someone come in and say yes you can!

    Yep I think it's a good site to see how the investments are doing and see the balance and helps me rebalance the funds.

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