How do you know if a CFP’s portfolio recommendations are good?

[Anonymous]

My CFP said they will not show me how the portfolio they picked performed compared to the performance of the TSP target retirement date fund I had previously been using. I realize I can do this myself but I am busy and I am paying them quite a bit. I thought about switching CFPs over this, but another CFP I talked to also will not do it. Is that normal? If not, can you recommend someone who will?

[Anonymous]

Anonymous wrote:My CFP said they will not show me how the portfolio they picked performed compared to the performance of the TSP target retirement date fund I had previously been using. I realize I can do this myself but I am busy and I am paying them quite a bit. I thought about switching CFPs over this, but another CFP I talked to also will not do it. Is that normal? If not, can you recommend someone who will?

i am a cfp

if they won't show you this, leave and either do it yourself or find someone else. This is quite literally their job.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My CFP said they will not show me how the portfolio they picked performed compared to the performance of the TSP target retirement date fund I had previously been using. I realize I can do this myself but I am busy and I am paying them quite a bit. I thought about switching CFPs over this, but another CFP I talked to also will not do it. Is that normal? If not, can you recommend someone who will?

i am a cfp

if they won't show you this, leave and either do it yourself or find someone else. This is quite literally their job.

THIS^^^^ They should show you this. If they are not "beating the index funds" then why do you need the CFP? Pay them for a 1-2 hours of going over what you should invest in/which categories and go select vanguard or TRowe index funds and don't pay any more fees.

[Anonymous]

Absolutely fire them

[Anonymous]

Actually it's not literally their job to compare their returns to a fund in your employer-sponsored plans. The CFP is within his rights to refuse to engage in a performance derby. If you're not happy with his service and long-term results, then transfer your accounts elsewhere. A CFP's role encompasses more than just portfolio management. He's (hopefully) doing retirement savings analyses, determining what you'll be able to spend in retirement, and aligning your portfolio with your goals. He also acts as a behavioral counselor, saving you from making emotional decisions during periods of volatility. It should tell you something that not one, but two financial professionals declined your request.

[Anonymous]

Anonymous wrote:Actually it's not literally their job to compare their returns to a fund in your employer-sponsored plans. The CFP is within his rights to refuse to engage in a performance derby. If you're not happy with his service and long-term results, then transfer your accounts elsewhere. A CFP's role encompasses more than just portfolio management. He's (hopefully) doing retirement savings analyses, determining what you'll be able to spend in retirement, and aligning your portfolio with your goals. He also acts as a behavioral counselor, saving you from making emotional decisions during periods of volatility. It should tell you something that not one, but two financial professionals declined your request.

It’s not their job but I would probably fire a CFP who wasn’t willing to walk thru the pros and cons of index fund investing vs their services. They should be willing to do the comparison and make the case for their services

[Anonymous]

All I can tell you is my finance friend just compared my CFps performance to an index fund and the guy underperformed by 3.5% while taking a 20K annual fee.

[Anonymous]

Anonymous wrote:Actually it's not literally their job to compare their returns to a fund in your employer-sponsored plans. The CFP is within his rights to refuse to engage in a performance derby. If you're not happy with his service and long-term results, then transfer your accounts elsewhere. A CFP's role encompasses more than just portfolio management. He's (hopefully) doing retirement savings analyses, determining what you'll be able to spend in retirement, and aligning your portfolio with your goals. He also acts as a behavioral counselor, saving you from making emotional decisions during periods of volatility. It should tell you something that not one, but two financial professionals declined your request.

This is bullshit. The only reason a CFP wouldn't do a performance analysis is is they know they're getting their ass kicked by the low cost TSP fund. This is a huge red flag.

All your talk about being a behavior counselor is smoke screen.

[Anonymous]

80% of the time, index funds do better than financial advisors (see Jane Bryant Quinn). Save your money.

[Anonymous]

Anonymous wrote:80% of the time, index funds do better than financial advisors (see Jane Bryant Quinn). Save your money.

Perhaps index funds perform better than actively managed funds, but individual investors are a different story. Their emotions get in the way of their success. And a good planner can help you avoid making emotional decisions about your investments.

https://www.ifa.com/articles/dalbar_2016_qaib_investors_still_their_worst_enemy

[Anonymous]

Anonymous wrote:

Anonymous wrote:80% of the time, index funds do better than financial advisors (see Jane Bryant Quinn). Save your money.

Perhaps index funds perform better than actively managed funds, but individual investors are a different story. Their emotions get in the way of their success. And a good planner can help you avoid making emotional decisions about your investments.

https://www.ifa.com/articles/dalbar_2016_qaib_investors_still_their_worst_enemy

I don't need to pay a planner thousands to remind me to stay the course.

[Anonymous]

Op here. Thanks for the responses everyone. I don’t manage my money emotionally. Really I feel too busy to look at it more than once or twice a year, so it’s actually a PITA to adjust a portfolio as directed by my CFP. I much preferred just letting the TSP target fund do its thing.

I’m 20 years away from retirement and have no major changes in income or expenses year to year, so I’d been thinking I probably don’t need a CFP anymore, especially since I don’t even know if their recommendations are outperforming my TSP’s target fund.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:80% of the time, index funds do better than financial advisors (see Jane Bryant Quinn). Save your money.

Perhaps index funds perform better than actively managed funds, but individual investors are a different story. Their emotions get in the way of their success. And a good planner can help you avoid making emotional decisions about your investments.

https://www.ifa.com/articles/dalbar_2016_qaib_investors_still_their_worst_enemy

I don't need to pay a planner thousands to remind me to stay the course.

DP. Then don’t pay one. But given the stats that PP lined up, many investors do underperform because they make poor decisions and *could* benefit from someone telling them nothing more than to stay the course.

I’m in sales (not a CFP) so I know how hard these jobs are – and I’m always amazed at how much vitriol there is toward financial professionals. If you don’t think you need their services, just don’t use them.

[Anonymous]

Anonymous wrote:Actually it's not literally their job to compare their returns to a fund in your employer-sponsored plans. The CFP is within his rights to refuse to engage in a performance derby. If you're not happy with his service and long-term results, then transfer your accounts elsewhere. A CFP's role encompasses more than just portfolio management. He's (hopefully) doing retirement savings analyses, determining what you'll be able to spend in retirement, and aligning your portfolio with your goals. He also acts as a behavioral counselor, saving you from making emotional decisions during periods of volatility. It should tell you something that not one, but two financial professionals declined your request.

I am the pp CFP

If they refuse to do this it's because they lack confidence in their role and aren't worth the money. I am always open to comparing performance as it's very helpful for the client. Some years you may look bad, others you may look great. That's investing. Comparing the C fund to a diversified portfolio is not apples to apples but that does not mean I won't do it.

[Anonymous]

Anonymous wrote:Actually it's not literally their job to compare their returns to a fund in your employer-sponsored plans. The CFP is within his rights to refuse to engage in a performance derby. If you're not happy with his service and long-term results, then transfer your accounts elsewhere. A CFP's role encompasses more than just portfolio management. He's (hopefully) doing retirement savings analyses, determining what you'll be able to spend in retirement, and aligning your portfolio with your goals. He also acts as a behavioral counselor, saving you from making emotional decisions during periods of volatility. It should tell you something that not one, but two financial professionals declined your request.

Pretty tough to reconcile the bolded, PP.