Financial Advisors

parcoeliz · February 2014

Have any of you ever "hired" and had consultations with a Financial Advisor? I would LOVE to do this, however, I'm honestly not sure we have enough money to pay for one, and not enough money to really work with.
We (I) are pretty responsible with our money/income/bills/savings/retirement, however, I want to meet with one who can really assess our debt and options for savings accounts and educating us on investments. I can't help but feel like we could be doing "more" with our money.
I have NO KNOWLEDGE on stocks/bonds. But, I'm wondering if this could help us make money in the long run. I don't want to be missing out on smart opportunities!
So, have any of you been involved with a Financial Advisor? Do you recommend it?

hoffse · February 2014

I've never used one. I just feel like most of what they would tell me I could learn from reading money blogs, etc. That whole field has made "investments" sounds like a big bad scary word, and it's really not that hard to learn enough to make your money grow on your own. At the end of the day, growth is the real goal.

My other concern with using one is that s/he might impose their own financial philosophy on my portfolio. I think if you DO use one it's very important to know how you feel about things like risk vs. return before you even walk through the door. For instance, I can tolerate a pretty high level of risk. So a guy who signed me up for 5% growth funds (because that's what he has) would not be a good fit for me. On the other hand, I will never buy stocks by themselves. So a person who tried to sign me up for a bunch of stocks would also not be a good fit.

And I guess I feel like if I already know where I fall on the risk to return scale, there's no point in paying a financial person for their advice on investments. I can use morningstar to find investment options that fit my particular philosophy pretty easily.

The other side - debt - is actually harder I think. But again, there's no single right answer to managing debt. You have to balance it against long-term (retirement) and short-term savings and also your general spending. Some people feel good about having $1,000 in savings and sending everything else to debt. That's the Dave Ramsey model. I, on the other hand, would rather have $5,000-$10,000 in savings before I'm paying anything extra on debt. I just feel better with that cushion. Neither approach is right or wrong, it's just a matter of which one makes you comfortable. And I think that most people who are managing debt do question themselves once in awhile. I think the only universal evil in any person's total financial picture is high-interest credit cards. But I'm sure you already know that.

All that said, a lot of people on these boards have used financial advisers and have loved it. If you would do better learning about these things from a FA rather than online, then that's a pretty worthwhile expense that can pay off over the long run. If you're serious about it, please make sure you can afford their services before your meeting... increasing debt to hire a financial adviser just runs counter to the whole point of hiring one! Also look for somebody who bills you hourly instead of taking a percentage on commissions. Not only will they probably cost less in the long run, but the hourly people really don't have any reason to sell you one investment product vs. another. The commissioned people have every reason to direct you toward high-commission investment options, even if they don't fit you very well.

formerlyGDaisy09 · February 2014

We have a FA, she has done everything from advise us on paying down H's debt to how to purchase our home to our taxes. Once H's debts are paid off she is going to help guide us in where we should reallocate the $2000 a month we're throwing at those debts. We have ideas, but I like having someone to run things by who isn't one of our parents.

Ultimately we make our own decisions, but she helps inform those decisions so I feel more confident that what we're doing is smart.

cbee817 · February 2014

We met with one through DH's work- all of the meetings were free since DH already has his 403b through them. They went through all of our taxes, savings, retirement, DH's pension, etc and provided us with a view of how we would do through 2076. They recommended some term life insurance policies because of the kids, getting wills drawn up (appt is Friday), and starting Roth IRAs. We did all of those things, but had no obligation to use their services. It helped a lot and they like to meet annually or if things drastically change (job loss, large increase in income, etc). As long as it's free, we'll continue to use their services.

emily1004 · February 2014

We use an FA, but only because he's a very trusted family member. When we first started our Roth several years back, he told us we could do it on our own and gave us the funds we should look at. I opened a Fidelity account, but they did not offer these mutual funds, so we switched to his Merrill Lynch branch. We pay anywhere between $50-$100 a year. (He doesn't charge us for his time obviously.) That may seem high to some people but it's been worth it. Granted, these funds have been extremely volatile, which we can handle while we are still young.

My only issue with doing it on your own is not having access to good funds with certain accounts. The issue I have with the internet is that anyone can put anything they want to further their agenda with zero to little consequences. If I were you, I would find one that I can afford and one I trust; which can be tricky if you don't know what you're looking for. Find one on referral only. Make sure to interview at least three people. My biggest piece of advice to you; if you hear something that sounds too good to be true, it IS!

vlagrl29 · February 2014

I go into a fidelity office once or twice a year to get advice but I don't pay a guy when I go in. I do have half of my retirement managed with the management team at 1.14%

blondie42107 · February 2014

emily1004 said:
We use an FA, but only because he's a very trusted family member. When we first started our Roth several years back, he told us we could do it on our own and gave us the funds we should look at. I opened a Fidelity account, but they did not offer these mutual funds, so we switched to his Merrill Lynch branch. We pay anywhere between $50-$100 a year. (He doesn't charge us for his time obviously.) That may seem high to some people but it's been worth it. Granted, these funds have been extremely volatile, which we can handle while we are still young.

My only issue with doing it on your own is not having access to good funds with certain accounts. The issue I have with the internet is that anyone can put anything they want to further their agenda with zero to little consequences. If I were you, I would find one that I can afford and one I trust; which can be tricky if you don't know what you're looking for. Find one on referral only. Make sure to interview at least three people. My biggest piece of advice to you; if you hear something that sounds too good to be true, it IS!

I'm the opposite. I have a family member that is a FA and refuse to mix family and business. Also we're private in the sense that we don't want our family to know our income, etc.

emily1004 · February 2014

blondie42107 said:

We use an FA, but only because he's a very trusted family member. When we first started our Roth several years back, he told us we could do it on our own and gave us the funds we should look at. I opened a Fidelity account, but they did not offer these mutual funds, so we switched to his Merrill Lynch branch. We pay anywhere between $50-$100 a year. (He doesn't charge us for his time obviously.) That may seem high to some people but it's been worth it. Granted, these funds have been extremely volatile, which we can handle while we are still young.

My only issue with doing it on your own is not having access to good funds with certain accounts. The issue I have with the internet is that anyone can put anything they want to further their agenda with zero to little consequences. If I were you, I would find one that I can afford and one I trust; which can be tricky if you don't know what you're looking for. Find one on referral only. Make sure to interview at least three people. My biggest piece of advice to you; if you hear something that sounds too good to be true, it IS!

I'm the opposite. I have a family member that is a FA and refuse to mix family and business. Also we're private in the sense that we don't want our family to know our income, etc.

I understand wanting to keep things private. My mom is extremely private and my dad is not, it drives my mom nuts! (Obviously, I take after my father.) We even have friends that openly disclose how much they make a year, what their mortgage payment is, hell, even what their grocery bill was. None of our friends know how much H and I actually make.

BUT...H's Family is totally a different story, because for the most part they are extremely close and everyone is in everyones lives. I work with a family member that is an attorney, our accountant is a family member and our FA is a family member. Most of the businesses are family businesses. (Not to mention it saves us a ton of money). In our community we are not even suppose to knock on the door at a family members house, you just walk in. I honestly believe it's a cultural/community thing. I sometimes forget that when responding to an OP.

Financial Advisors

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