How do I find a reliable financial planner?
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Anonymous
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http://www.dcurbanmom.com/jforum/posts/list/192030.page
This thread was in the off topic forum. I'm desperate to find someone to help me with financial planning. We have about $700K in investable assets including retirement and other. We don't really have a plan for any of it. DH isn't interested in dealing with it so it's up to me to find some help. Any suggestions out there? |
Anonymous
| I'm the PP who used vanguard. I think $700k is plenty to qualify for the service. Go to the site and you can learn all about it. Of course, they will recommend vanguard funds, and their focus is on reducing expenses, but that is a good way to go, so worth considering. |
Anonymous
| We went with Steve Lowman at Morgan Stanley in Bethesda and have been very pleased. |
Anonymous
| Bump. Any other suggestions for independent financial planners not affiliated with big brokerage firms? |
Anonymous
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Please just do it yourself. Most financial planners are unable to beat the broad indexes anyway, but they wil charge you at least 1% of your portfolio value every year to manage your account. So that's $7000 per year you will be losing regardless whether or not the stock market has a winning or losing year. Then if you have mutual funds in your portfolio they charge 2% management fees. Now you are up to $21,000 per annum in management fees and on average the stock market only increases by 5% annually. Figure in capital gains taxes when you retire and liquidate your profits will be practically 0%.
Years ago buying and selling stocks was very expensive - not so today. Years ago quality information about corporations was difficult to comeby - no so today. Today we get information just as fast as the brokerage firms themselves and it's all free. If you really want to do nothing and not be bothered at all. Let Warren Buffet manage your money. Buy shares of Berkshire Hathaway (BRK/A or BRK/B) and you'll have the best money manager in the world managing your money and you'll pay no management fees whatsoever. Or if you want to be slightly more involved you can buy ETFs that are diversified across broad spectrums of the economy e.g. financials, technology, indUstrials, bonds, energy, industrials, dividends, emerging markets, etc. etc. I personally favor stocks and ETFs which pay dividends in which I then reinvest, usually in the same corporations. When I do that, I don't even have to pay brokerage fees to purchase the new shares or the fractions of the shares I'm purchasing. Over time because I've paid so little in management fees and I've reinvested my dividends, my weath has grown significantly. So just to recap, money managers charge 1.0%, mutual funds charge 2.0% and ETFs charge .06%. Owning individual shares of stocks cost 0%. Brokerage fees are roughly $8-9 per purchase or sale of stocks. Reinvesting dividends in the same corporations is free of charge. Managing your own money is easy and it's really the only way to increase your wealth. If you are paying money managers 3% of your wealth every year to manage your money you'll find that you've saved your entire life and your wealth has never had the opportunity to compound and to increase. No one cares more about your money than yourself. Do it yourself. Become a capitalist and retire wealthy. |
Anonymous
| I use Learnvest. |
Anonymous
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Never invest in a mutual fund with a 2% fee but there are plenty of funds with reasonable fees. I would second the suggestion to go with Vanguard both because of the low fees and because index investing makes a lot of sense, but if you want a managed fund you could look at some T Rowe Price or Dodge and Cox funds.
If you really want someone to talk to not at fund co. you could call this guy. http://rwinvesting.blogspot.com/ |
Anonymous
| Find a fee only certified financial planner. We used one recommened here are were very satisfied. napfa.org |
Anonymous
Would you be willing to provide a name please? |
Anonymous
We were very satisfied with Tom Conway (Rockville and DC). He was passing on work to younger people in the firm but they also seemed top notch. |
Anonymous
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One thing to be careful of to the posters saying "Do it yourself". You are probably not spending the time to factor in your risk profile and rebalance your portfolio accordingly (based on changes in the values of the various assets). Also financial planners have access to some funds not available as an ETF (DFA funds for example), which have low management fees. The reason they get access to it and it's not an ETF is that they agree not to trade it often, which makes things a lot easier day-to-day for the fund managers.
I know I sound like I must work for one of these guys, but I don't. I am a trustee on a trust that is managed by a local firm (that is not affiliated with any big bank = they don't push their own funds); and then we have our own assets which I manage on my own (we need to use the money in 2 years = no investing). There is certainly a lot of value in just handing it over and not having to deal with it. They do all the rebalancing based on your risk profile, so even with their 1% fee, the combination of access to low-fee funds and their active management seems to more than cover it. |
Anonymous
| I would either do it yourself (notwithstanding PP's points - I don't think rebalancing is particularly hard, and it can just be done once a year or so. After an initial investment of a couple of days reading up on stuff, it won't take more than a few hours a year to manage your portfolio), or go to Vanguard. Key is low management fees. Morgan Stanley et al will ravage you. |
Anonymous
Rebalancing is not a big deal but even if you don't want to do it there are plenty of low cost funds that will automatically rebalance like Vanguard's life strategy and target retirement. Personally I don't think it makes sense to pay 1% to get "access" to low cost funds (if I really wanted DFA funds I would find a cheaper advisor or just use them in my Utah 529). |
Anonymous
| Clarendonwealthmanagement.com |