Financial Advisors-Are they worth the $

[Anonymous]

Is it worth having a financial advisor who charges 1%? What's the alternative?

[Anonymous]

Depends on how much you have and your proficiency and time to invest it all. I think the 1% advisors make sense if you have $500k-$2 million or so in liquid assets. Above that and you probably need real wealth management (i.e. combine all retirement/college/personal savings under one roof.) But every situation is different, and the personal money management industry is very much built on trust. If you know someone (or can find someone through referrals) who you trust, they can help advise you through this.

[Anonymous]

My investment portfolio is approximately 250K. I don't know the value of having the financial advisor given that our portfolio does not change much from year to year other than an occasional purchasing of stocks.

[Anonymous]

There are reasonably good free financial advisors, you just need to understand how they get paid and be aware when their advice might conflict with your self interest. For example, I use a guy from Northwestern Mutual who is excellent and we've become quite close over the years. I just get a second opinion when he's trying to pitch me on more life insurance. . .

[Anonymous]

I don't think they are worth it for portfolio allocation (unless perhaps you need them as a buffer to help you avoid doing dumb/emotional moves). 1% is way too much-- your bond investments will be making about 2% so you've just paid half your return to a guy for telling you something you could find on the internet.

I think having someone to talk to about cash flow, insurance, and retirement vs college savings, etc. can be helpful, but you don't need to pay them every year.

[Anonymous]

If you are not increasing yoru portfolio you are not taking advantage of ways to make $$$ even in a down market.

I woudl suggest having someone who will review where you are and give you a financial check up.

Hard to pay 1% but if he or she is doing a good job it shouldn;t mean that much. Say you earn 12% one year, take out 1% will earning 11% be ok?

[Anonymous]

Anonymous wrote:I don't think they are worth it for portfolio allocation (unless perhaps you need them as a buffer to help you avoid doing dumb/emotional moves). 1% is way too much-- your bond investments will be making about 2% so you've just paid half your return to a guy for telling you something you could find on the internet.

I think having someone to talk to about cash flow, insurance, and retirement vs college savings, etc. can be helpful, but you don't need to pay them every year.

Some of my mother's bond investments have been paying upwards of 5%. But, I agree with your basic point.

[Anonymous]

Anonymous wrote:I don't think they are worth it for portfolio allocation (unless perhaps you need them as a buffer to help you avoid doing dumb/emotional moves). 1% is way too much-- your bond investments will be making about 2% so you've just paid half your return to a guy for telling you something you could find on the internet.

I think having someone to talk to about cash flow, insurance, and retirement vs college savings, etc. can be helpful, but you don't need to pay them every year.[/quote]

So who do you use for this? A fee-only financial planner? What is the expectation/norm of how often you see them?

[Anonymous]

We did a fee-only financial plan ( I think that is what it's called) to have a planner look at everything - mortgage, retirement accounts, insurance, college accounts, savings, etc. It was absolutely worth it to help us decide where to allocate our money. We are not rich by any stretch, but found it was so worth it. The one-time fee was about $700.

Our planner called us last week knowing that we are furloughed to ask if we had any questions or concerns since he said some people get nervous and want to start moving funds around.

[Anonymous]

Anonymous wrote:We did a fee-only financial plan ( I think that is what it's called) to have a planner look at everything - mortgage, retirement accounts, insurance, college accounts, savings, etc. It was absolutely worth it to help us decide where to allocate our money. We are not rich by any stretch, but found it was so worth it. The one-time fee was about $700.

Our planner called us last week knowing that we are furloughed to ask if we had any questions or concerns since he said some people get nervous and want to start moving funds around.

How did you find your planner? Recommendation from somebody or your own search? I would be willing to invest $700, but worry about finding somebody good.