For Fee Advisors

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m@ver1ck
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For Fee Advisors

Post by m@ver1ck »

How does one go about looking for a reputable For Fee advisor. What can/should one expect from them beyond the 3 fund portfolio - is the spend going to be worth it?

Current Taxable/Retirement/529 portfolio is around 2.3M at age 45.
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NewMoneyMustBeSmart
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Re: For Fee Advisors

Post by NewMoneyMustBeSmart »

m@ver1ck wrote: Mon Sep 13, 2021 6:13 pm How does one go about looking for a reputable For Fee advisor. What can/should one expect from them beyond the 3 fund portfolio - is the spend going to be worth it?

Current Taxable/Retirement/529 portfolio is around 2.3M at age 45.
https://rickferri.com/

<$5k for a comprehensive recommended plan.

Spend is worth it for $2.3M (1/5th of 1% of your portfolio)
-- | Few are those who see with their own eyes and feel with their own hearts - Einstein | *Everything I write here is an unreliable opinion*
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retired@50
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Re: For Fee Advisors

Post by retired@50 »

See article for a list of questions for any prospective adviser.
https://jasonzweig.com/the-19-questions ... l-adviser/

Depending on your particular circumstances, advisers can be great, or completely unnecessary.

If the adviser is picking stocks or mutual funds for you, then they likely won't be worth the cost.

The best advice isn't about improving the 3-fund portfolio, it's about everything else in your financial life. Taxes, wills, estate plans, etc.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
livesoft
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Re: For Fee Advisors

Post by livesoft »

"For Fee Advisors" can mean many things since all paid advisors collect "fees" to my knowledge. For instance an Assets Under Management (AUM) fee is still a fee and many advisors charge an AUM fee. Some advisors charge a fee by the hour. Some advisors charge a fixed fee for a given service. Some advisors charge retainer fee.

I'm not sure what types of fees you are willing to pay.
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Jaymover
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Re: For Fee Advisors

Post by Jaymover »

Advisors should really be paid by the hour like a lawyer or another expert is at a similar pay rate and be suspicious of any other fee structure (eg percentage of funds managed). The one I used charges $300 per hour. That said, it can add up but as you have a fair bit of money it isnt really a major factor.

What they are useful for is making sure that the financial decisions you are making today are optimised for the future. An ethical advisor will probably agree that a 3 fund portfolio is fit for purpose but may have some suggestions around what the latest research is around appropriate domestic/international stock ratios to keep in mind when rebalancing. Be suspicious if they have some other "financial product" that can make you "more money".

Where financial advisors are useful are in the following areas.
- helping you determine long term financial goals
- making sure that the way your money invested and rebalanced is tax and fee efficient in order to reach those goals.
- Helping you determine what level of risk you are prepared to take to reach those goals eg overall asset allocation. If your goals are unrealistic an FA may help you realise that and then have a think about what might be suitable and realistic goals, make sure you are not barking up the wrong tree.
- Give options around insurance (you may have unnecessary insurance, or you might be underinsured)


Even tweaking your money a little could save thousands in future taxes and fees and may help you be more eligible for SS down the track. So the FA might pay for itself not to mention put your mind at ease

SOme people like to use a FA to manage their accounts for them, rebalance etc. It might only be an hour of work once a year but helps those who might be tempted to sell out after a major crash etc. Fiddling by retail investors can end up being expensive so not a bad investment to have someone to help remind you of why you are invested and what you are trying to do when things go wobbly. It may help you be slightly more aggressively invested and therefore the returns might cover the FA fee over a long time frame.

PS Im not an advisor
placeholder
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Re: For Fee Advisors

Post by placeholder »

livesoft wrote: Mon Sep 13, 2021 7:06 pm "For Fee Advisors" can mean many things since all paid advisors collect "fees" to my knowledge. For instance an Assets Under Management (AUM) fee is still a fee and many advisors charge an AUM fee. Some advisors charge a fee by the hour. Some advisors charge a fixed fee for a given service. Some advisors charge retainer fee.
It used to be common for advisors not to charge an explicit fee because they got a share of load fees and 12b-1 fees from the expense ratio of the funds they selected and later we started getting the "fee only" advisors.
Topic Author
m@ver1ck
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Re: For Fee Advisors

Post by m@ver1ck »

Thanks!
Looks like Rick Ferri is booked solid until mid 2022 - so I contacted the guy mentioned on his website.
dan7800
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Re: For Fee Advisors

Post by dan7800 »

I had a for fee advisor through RBC that picked stocks for me for a while. He did good on some, and really struck out on others. The ones he struck out on are cases where I need to think "long term", so in his words it is ok to take a 40% dip during a bull market.

I learned the hard way. Avoid.
tibbitts
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Re: For Fee Advisors

Post by tibbitts »

dan7800 wrote: Thu Sep 16, 2021 12:35 am I had a for fee advisor through RBC that picked stocks for me for a while. He did good on some, and really struck out on others. The ones he struck out on are cases where I need to think "long term", so in his words it is ok to take a 40% dip during a bull market.

I learned the hard way. Avoid.
Can you elaborate on the 40% dip? Most of us took a roughly 40% dip in equities during 2020 so I assume that's not what you're referring to.
dan7800
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Re: For Fee Advisors

Post by dan7800 »

tibbitts wrote: Thu Sep 16, 2021 12:54 am
dan7800 wrote: Thu Sep 16, 2021 12:35 am I had a for fee advisor through RBC that picked stocks for me for a while. He did good on some, and really struck out on others. The ones he struck out on are cases where I need to think "long term", so in his words it is ok to take a 40% dip during a bull market.

I learned the hard way. Avoid.
Can you elaborate on the 40% dip? Most of us took a roughly 40% dip in equities during 2020 so I assume that's not what you're referring to.
I meant a 40% dip on recent stocks that they picked out for me. "Long term" plays that have stunk it up for me.
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ruralavalon
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Re: For Fee Advisors

Post by ruralavalon »

m@ver1ck wrote: Mon Sep 13, 2021 6:13 pm How does one go about looking for a reputable For Fee advisor. What can/should one expect from them beyond the 3 fund portfolio - is the spend going to be worth it?

Current Taxable/Retirement/529 portfolio is around 2.3M at age 45.
As I recall about 16 years ago we paid about $6-7k, and thought it was well worth the money.

With "around 2.3M at age 45" you probably want to look a "fee-only" (not "fee-based") planner or advisor who charges by the hour or by the project, not based on Assets Under Management (AUM).

Here is a guide to help in deciding if you want or need an advisor: "The great paradox of using an advisor is that you must know some basics in order to evaluate the advice, and once you do, you also know enough to consider doing your own management." "Chapter 10 – On Your Own or Hire an Advisor".

1) You could post your financial details on this forum for ideas on investments and financial planning. Please see this for format: "Asking Portfolio Questions". I think that you will fund that simply gathering together all of your information together in one place will be helpful to you in understanding your situation and what you need to do.

2) Vanguard offers a ”Personal Advisory Service” (PAS) that will give you advice and manage your investments for an annual fee of 0.3% of your investments. Fidelity and Schwab offer a similar service.

3) Harry Sit, who sometimes posts here, offers a service thru his blog to help people locate an advisor in their locality. "Advice-Only Search and Screening".

4) Two links for finding an advisor:
The National Association of Personal Financial Advisors (NAPFA); and
Garrett Planning Network.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
heyyou
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Re: For Fee Advisors

Post by heyyou »

As a buffer for my spouse's lack of knowledge of stocks and bonds (I grew up with some exposure), I use Evanson Asset Management (EAM), a flat fee advisor whose initial annual fee (paid quarterly) has not ever been raised. That makes sense because the initial setup is the most time consuming portion of portfolio management. Over time, my fixed fee is now less than what VG would charge for its low % fee for portfolio management. I've had the same CFP (certified financial planner) at EAM for more than a decade. The advisory customers there, can pay a one-time additional fee for an EAM CFP who is dedicated to just developing retirement spending plans.

EAM's allocation is a 10x10 of equal slices of size and value, foreign and domestic index funds, plus commodities and gold, but you can opt out of whatever doesn't suit you. EAM uses DFA funds which do have fund fees higher than Vanguard's fund fees. Long term, I have not noticed any advantage to owning DFA funds nor to EAM's slice and dice exposure, perhaps due to the recent dominance of Large Caps. What Banz (a founder of DFA) saw in small cap stock history in 1981, may no longer still apply these days, due to more scrutiny, earlier, by hedge fund quants.

A do-over for me would be to use Bogleheads poster Trev H's, four fund allocation (4 x 25) of equal slices of Vanguard's (VG's) domestic Large Growth index fund, plus domestic Small Value fund with VG's foreign Large Value fund (not an index fund) and foreign Small Cap fund. Choose your own ratio of stocks to bonds. His historic returns with rebalancing were superior to just owning domestic and foreign total stock index funds which likely had good enough returns on their own. My seeking optimal future returns based on historical returns seems to not have worked as well as I was hoping.
BJJ_GUY
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Re: For Fee Advisors

Post by BJJ_GUY »

placeholder wrote: Mon Sep 13, 2021 8:28 pm
livesoft wrote: Mon Sep 13, 2021 7:06 pm "For Fee Advisors" can mean many things since all paid advisors collect "fees" to my knowledge. For instance an Assets Under Management (AUM) fee is still a fee and many advisors charge an AUM fee. Some advisors charge a fee by the hour. Some advisors charge a fixed fee for a given service. Some advisors charge retainer fee.
It used to be common for advisors not to charge an explicit fee because they got a share of load fees and 12b-1 fees from the expense ratio of the funds they selected and later we started getting the "fee only" advisors.
The dirty secret (although, not really a secret to most on here) is that any professional being compensated via mutual fund loads and 12b-1 fees is actually a broker, however, they have done a really effective job utilizing the term advisor for several decades regardless of this fact.
smackboy1
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Re: For Fee Advisors

Post by smackboy1 »

Allan Roth is excellent and sometimes posts here.

https://daretobedull.com/
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
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ruralavalon
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Re: For Fee Advisors

Post by ruralavalon »

smackboy1 wrote: Wed Sep 22, 2021 11:04 am Allan Roth is excellent and sometimes posts here.

https://daretobedull.com/
Also:

Rick Ferri, and

Larry Swedroe.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Sahara
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Re: For Fee Advisors

Post by Sahara »

Planvision is very competent and DIY-friendly. You'll have the support and advice of an advisor as well as a CPA.

https://planvisionmn.com/

You can see their presentation to a Bogelheads Chapter here: https://www.youtube.com/watch?v=yuHfxcL ... e=youtu.be
Otnot
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Re: For Fee Advisors

Post by Otnot »

I found an advisor through Garrett Planning Network. https://www.garrettplanningnetwork.com/

It's kind of like a "google" for fee-only planners. I looked at a bunch of planners within a couple hours of me and reached out to one. It was my first and only time using a planner. I used him for about 9 hours at around $180 per hour. It was well worth it on a number of fronts. It confirmed to me that I was doing well managing my own investments and on track to retire, it gave my wife confidence that I have done a good job managing our finances, he suggested some portfolio re-balancing since I had been in savings mode and am now shifting to early retirement (my asset mix had been a bit too agressive), and he took a look at our insurance coverage (home, auto, etc.) and made some suggestions. He also talked to us about wills, etc.

He does not sell any products or get any referrals, so I was quite pleased. We agreed up front (after a free hour interview) on the work scope and that it would not exceed 10 hours. He ended up charging me for 9 hours.

I have not had a need to follow up with him, but could envision touching base with him for 2 or 3 hours every couple of years.
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ruralavalon
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Re: For Fee Advisors

Post by ruralavalon »

Otnot wrote: Thu Sep 23, 2021 9:54 amIt was my first and only time using a planner. I used him for about 9 hours at around $180 per hour. It was well worth it on a number of fronts.
You got an excellent deal in my opinion.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
BogleFan510
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Re: For Fee Advisors

Post by BogleFan510 »

My opinion:

Look for someone who charges by the hour and is qualified to address tax, estate and accounting issues. Law degree for estate, CPA+investment tax efficiency credentials seems prudent for any 'advanced' tax strategies.

l personally do not believe investment advisor is worth it. There is little evidence advisors add any value over a simple index portfolio, other than the minor possiblity they help you prevent behavioral errors you can easily prevent yourself by having discipline.
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