Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

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il0kin
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Re: Are there actually any good financial advisers? Wondering about what my FA said.

Post by il0kin »

HipCoyote wrote: Sat Jun 15, 2024 6:27 pm A FA is absolutely critical…..if you’re likely to do something stupid such as buy high and sell low, chase returns, panic. If you can adhere to and understand a basic, solid financial plan there is no need for an FA.

FAs like to tout a study that says that people make more with FAs than not, on average. No doubt true. But that
Is due to behavioral matters, not performance of stock selection.
I agree with this. I have a family member who works for a small FA firm who deals mainly with people in the 5-20M net worth range. Many of their clients are business owners who have done well, but have a lot of risk/assets concentrated in a specific industry due to their businesses. They specialize in helping business owners mitigate that risk in their personal finances, and he tells me stories about how hard-headed business owners, while very smart people, are also very independent people, so large part of his job is talking them out of selling/buying things that don’t make sense for wealth preservation.

They charge 1%, and the stories he’s told me about talking people off the cliff have undoubtedly saved their clients many millions of dollars beyond that 1%. He is a good, honest person who truly lives by the golden rule and takes his duty as a fiduciary seriously. He is worth that 1% for the right person. Most Bogleheads, or frankly regular W2 earners, don’t need his services… as long as they don’t panic sell… and that’s just fine, but if having a 1% fee keeps you from panic selling during every bear market, it’s still probably worth the money.
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

Sorry for the late reply I seem to have missed the last few responses.

If he is earning money from my account directly, isn't he motivated to grow my account rather than recommend funds with high expense ratios? That is the rationale anyway.

Yes, I had to do a lot of navigation with regards to different countries. I have posted on Reddit about this, some of the Singaporeans there are ok with ifast and some are not.

The last response seems to echo another reply made before - that there are some good FAs. When I first read Bogleheads stuff, they seemed to consider FAs the scum of the earth, so I wanted other opinions. As stated before, I have to question all information to a degree, critical thinking and all that.
oken
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by oken »

Cyath wrote: Wed Sep 11, 2024 11:54 pm Sorry for the late reply I seem to have missed the last few responses.

If he is earning money from my account directly, isn't he motivated to grow my account rather than recommend funds with high expense ratios? That is the rationale anyway.
Increasing your account is not the only way he earns.
Just off the top of my head, he also earns by getting more clients.
Or by selling you the funds that pays him more.
He doesn't have a vested interest in increasing your account if it's not the only way he earns.

If his time is better spent by getting more clients than bothering about your account, you can bet he will be tempted to prioritise getting more clients. He may not, especially if the differential may not seem high enough to him, but it's just a question of how much.

He also potentially earns from the funds that he sells to you.
Endowus talks about this and uses the term "trailer fees".
I looked it up on the Bogle Wiki and I'm thinking this is the same as Sales Fees or perhaps the 12b-1 marketing fee.
https://www.bogleheads.org/wiki/Mutual_funds_and_fees

If there are two funds, A & B.
Fund A gives you say 10%pa, and Fund B gives you 8%pa but also pays the broker 1%pa.
Which do you think the broker will recommend to you?

One doesn't have to be an asshole to make that choice. Such things are easily justifiable by everyone.
"Past earnings is not the same as future earnings, perhaps B will do better this time."
"Things move in cycles. It's B's turn to outperform."
"Anyway he still gets 8%, and that's more than what he used to get so why should he care."

I note also that you mentioned he did 8-10%pa previously and you thought that was good. Is that 8-10% before or after fees? His fees or trailer fees?
Because it could well be 6-8% after fees or less. And you also don't know what he's not reporting.
eg. Is he cherry-picking data based on the best possible dates? Is he reporting only on his gains and not his losses?
Cyath wrote: Wed Sep 11, 2024 11:54 pmYes, I had to do a lot of navigation with regards to different countries. I have posted on Reddit about this, some of the Singaporeans there are ok with ifast and some are not.

The last response seems to echo another reply made before - that there are some good FAs. When I first read Bogleheads stuff, they seemed to consider FAs the scum of the earth, so I wanted other opinions. As stated before, I have to question all information to a degree, critical thinking and all that.
I hardly think many think they are scum. But it is not hard to question where the money goes, and to acknowledge that even the best of men will be tempted by where the money leads.
It's your money. If you think it's fine, just go ahead and do it.
The only thing that folks here are trying to point out is that the incentives don't match. Shrug.
Dottie57
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Re: Are there actually any good financial advisers? Wondering about what my FA said.

Post by Dottie57 »

josephny wrote: Sun Jun 16, 2024 4:33 am OP: Not much value I can add except to say that I am living with a similar situation of having a smallish (~15%) of my portfolio being charged a 90bp AUM fee by a FA and (possibly even more importantly) not having the authority to decide how that 15% is being invested. And I know the challenging nature of deciding to cut out the FA.

I'm hoping my response furthers this conversation and doesn't hijack it.

Others have indicated that there is a role for FAs other than investment-picking.

Modeling, planning, strategizing, and a balance to the irrational and emotion-based decision making tendencies.

I think I get the emotional stuff (stocks are on sale! Things have fallen so much I better get out now before I lose everything! NewTechCo just rose 4000% I better catch that wave now, etc.).

But, I have no idea about modeling, planning, and strategizing, or other generally accepted justified services of value an FA would bring within the BH approach.

Can someone elaborate?
Modeling, planning and strategizing all involve making assumption or guessing. The assumptions and guessing may be correct or not.
So I’ve given up and just put a percent of my earning into my retirement accounts. Retirement is working out well after 6+ years.
Life is more than grinding it out in some drab office setting for an arbitrary number. This isn't a videogame where the higher score is better. -Nathan Drake
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

The figures he quoted are from different years, some of which did better and worse.

Obviously, I want to do my homework and make the best decisions for myself.

I plan to ask him more about how he makes his money when we met meet. He has shown me a historical transaction in which he recommended me to buy a fund which pays less to iFast.

Trailer fees are 0.1% on mutual funds. None on ETFs.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

Mistakes can be great enough to equal or exceed the cost of having an FA. Compare apples to apples, your actual performance to the FA performance. An FA who performs poorly will not stay in business. I certainly wouldn’t employ him/her. Would you? Longevity and word of mouth can start the vetting process. The FA cost may be justified when the investor has no interest or time or good health to perform at an acceptable level.
There is data to show that investors don’t earn the market performance. Little mistakes add up.
DIY projects can come out well or badly. Don’t see any reason to complain about something when it isn’t planned anyway. Value vs cost is a decision we make every day.
Full disclosure, I’ve had an FA since 1990, I’m enough of a Boglehead to know what I’m paying for. Just yesterday he returned my call in 15 minutes when I had a question about capital gains. The asset wasn’t even in my portfolio it was my mom’s money.
I don’t like marijuana purveyors in my community but I don’t use their products..
GaryA505
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by GaryA505 »

hvaclorax wrote: Thu Sep 19, 2024 11:38 am Mistakes can be great enough to equal or exceed the cost of having an FA. Compare apples to apples, your actual performance to the FA performance. An FA who performs poorly will not stay in business. I certainly wouldn’t employ him/her. Would you? Longevity and word of mouth can start the vetting process. The FA cost may be justified when the investor has no interest or time or good health to perform at an acceptable level.
There is data to show that investors don’t earn the market performance. Little mistakes add up.
DIY projects can come out well or badly. Don’t see any reason to complain about something when it isn’t planned anyway. Value vs cost is a decision we make every day.
Full disclosure, I’ve had an FA since 1990, I’m enough of a Boglehead to know what I’m paying for. Just yesterday he returned my call in 15 minutes when I had a question about capital gains. The asset wasn’t even in my portfolio it was my mom’s money.
I don’t like marijuana purveyors in my community but I don’t use their products..
When you say "An FA who performs poorly will not stay in business", you are assuming that the FA's clients understand enough about investing to know whether the FA is performing poorly or not. I have two coworkers who each use an different FA. One doesn't have a clue if the FA is doing poorly or not, he just wants someone else to invest his money for him. The other one is convinced that the FA is doing great, because the FA told him he was and showed the results. I looked at the results and they were slightly under what an SP500 or total stock market fund would have done.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

Good point. Wouldn’t the same be true if this person was a DIY. Apples to apples. I would think this is just the person who will benefit from FA.
We might see this person doing his own taxes, estate planning, DIY for home repairs and improvements. I mean if he’s that stupid maybe he’s not even saving anything.
Yup your worst case is the exception that proves the rule given how deep the scenario has to sink to be valid.
GaryA505
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by GaryA505 »

hvaclorax wrote: Thu Sep 19, 2024 12:14 pm Good point. Wouldn’t the same be true if this person was a DIY. Apples to apples. I would think this is just the person who will benefit from FA.
We might see this person doing his own taxes, estate planning, DIY for home repairs and improvements. I mean if he’s that stupid maybe he’s not even saving anything.
Yup your worst case is the exception that proves the rule given how deep the scenario has to sink to be valid.
I'm DIY-er, but have been studying enough to be able to evaluate FA performance and not be fooled by what he/she says. I think I would know a good from a bad one, if I needed to make that determination. Another example is my sister (widow). She was going to go with an independent advisor recommended by some friends who said he was great. This FA told her he could beat the stock market and could make changes to protect her assets in a market crash. Fortunately she called me to ask what thought, and I told her to run away. We had several conversations about DIY, but I could see that wasn't going to happen. She decided to go with Schwab, which is OK considering the circumstances.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

Thank you for two examples. I would beware of confirmation bias.
Bogleheads would not do anything that unreasonable. Those who would aren’t Bogleheads won’t read this thread. Remember your sister had to ask you. What if my BIL asked his sister? Yikes
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

I can see there are still many different reasons to get an FA or not. I want to zoom into the reasons why in my circumstance I would use one.

I'm similar to the above poster that I am a Boglehead and I still may want to retain my FA.

Perhaps there can be a more comprehensive thread or something like this in the future? The default Boglehead position seems to be "FA Bad"
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White Coat Investor
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by White Coat Investor »

Cyath wrote: Sat Jun 15, 2024 1:43 am I have been on the fence about ditching my FA and just doing it DIY with the Bogleheads approach for about a year now. Made lots of posts about it too.

However, I have been looking over the returns that my FA has generated. In lean years it's about 6% PA and good years 11.5%. Those are not bad numbers considering they factor in the cost of the FA, expense ratios and switches.

I have discussed my Bogleheads strategy with my FA and he says it's a good one. I've even more or less said that if I can do I'll just leave - he probably has tons of other clients so he doesn't really need me.

Most of the books I have read make out FAs to be some horrible spawn of evil that are taking you for a ride. I guess that is true for completely uneducated investors (I used to be one) Or maybe it's more true in the USA market - I am Singaporean and the market here is very strictly controlled.

Most recently he said that he could combine the buy and hold Bogleheads strategy with sentiment-based investing to generate 11-12% PA - having the FA on hand helps take advantage of things like Nvdia (which I wouldn't normally be aware of) This seems a little too good to be true?

I welcome advise and opinions.

[Title clarified - moderator Kendall]
If you make lots of posts here, you will never be happy in the long run using a financial advisor. Sorry. That's just the way it is. This forum attracts DIY types and DIY types don't see enough value in FAs to pay their prices.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

White Coat Investor wrote: Sun Sep 22, 2024 10:39 pm
Cyath wrote: Sat Jun 15, 2024 1:43 am I have been on the fence about ditching my FA and just doing it DIY with the Bogleheads approach for about a year now. Made lots of posts about it too.

However, I have been looking over the returns that my FA has generated. In lean years it's about 6% PA and good years 11.5%. Those are not bad numbers considering they factor in the cost of the FA, expense ratios and switches.

I have discussed my Bogleheads strategy with my FA and he says it's a good one. I've even more or less said that if I can do I'll just leave - he probably has tons of other clients so he doesn't really need me.

Most of the books I have read make out FAs to be some horrible spawn of evil that are taking you for a ride. I guess that is true for completely uneducated investors (I used to be one) Or maybe it's more true in the USA market - I am Singaporean and the market here is very strictly controlled.

Most recently he said that he could combine the buy and hold Bogleheads strategy with sentiment-based investing to generate 11-12% PA - having the FA on hand helps take advantage of things like Nvdia (which I wouldn't normally be aware of) This seems a little too good to be true?

I welcome advise and opinions.

[Title clarified - moderator Kendall]
If you make lots of posts here, you will never be happy in the long run using a financial advisor. Sorry. That's just the way it is. This forum attracts DIY types and DIY types don't see enough value in FAs to pay their prices.
If you make lots of posts here, you will get divergent responses. You may use an FA but it will not be a result of a majority opinion here. My take is that the more responses you get, the more confusing the answer as to what action to take. Second, third and fourth opinions? Consensus of the experts? Majority opinion rule? None but you can answer in your best interest.
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

I use a lot of forums, so I'm familiar with the divergent opinions phenomenon. Generally I use my intuition and try to listen to the people who know what they are talking about and seem genuinely interested in helping.

I have learnt much from the thread. I wish everyone well and I always want to keep learning and growing. Keep the info coming! :)
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

A question I have about the figures in an earlier post though...S&P cumulative returns doubled in 5 years (which sounds too good to be true?)

If I was in a three-fund portfolio at that time, wouldn't I need to pay the 15% withholding tax?
HKexpat
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by HKexpat »

Look at Vanguard’s S&P500 accumulating fund, which reinvests dividends (after withholdings). Cumulative return over the past five years in USD is 108%: https://www.justetf.com/en/etf-profile. ... 00BFMXXD54

It’s up 22% year-to-date. Which is exactly why I wouldn’t be impressed with a financial adviser who gets 10% in good years and some unknown return over the past 5 or 10 years. But it’s your money. Just at least make sure you know what a simple hands-off portfolio would get you. Otherwise, how would you evaluate the performance of this adviser?
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by sfnerd »

Cyath wrote: Sun Sep 22, 2024 4:33 am I can see there are still many different reasons to get an FA or not. I want to zoom into the reasons why in my circumstance I would use one.

I'm similar to the above poster that I am a Boglehead and I still may want to retain my FA.

Perhaps there can be a more comprehensive thread or something like this in the future? The default Boglehead position seems to be "FA Bad"
I live in Singapore, and I know several FAs here. FAs in Singapore seem to be a lot like FAs in the US. They tend to underperform the market, and they charge really high fees. Singapore FAs still seems to charge 1%, which is becoming less prevalent in the US as more people realize it's a massive cost.

1% doesn't sound like a lot, but I like to use this example when friends ask me about FAs:

Let's say you retire with 2.5m dollars at 60 years old. At a 4% safe withdrawal rate, you will be able to spend 100k dollars per year in retirement for your entire life. If you have an FA who charges 1%, you will pay them 25k dollars per year, and will only be able to spend 75k dollars per year.

So even though 1% sounds small, you are reducing your income by 25%. That's a big lifestyle difference. Considering most advisors underperform a basic index fund portfolio, it's probably even worse.
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

So I grilled the FA more and he says yeah it's like 10% on good years and 6-7% on bad years. Previously it was worse with other FAs, but at that point I didn't know much about finance. While I kick myself now, as my thread says I also forgive myself because I was still quite sick and I didn't know who to trust.

My FA is also a bit on edge because I keep on asking him questions and he says there is no trust now, or less. I don't think he's lying to me, but I don't see how he can outperform the S&P and a three fund portfolio (which he admits is good)

His argument for using him is that he can take advantage of market swings like NVIDIA this year, and handle asset assocation and similar matters. But a good 3 fund portfolio also has the asset allocation part taken care of, right? (according to my research)

The returns for the fund linked seem to be 25-26%...how is that even possible? I thought the S&P averaged 8-9% per year? (that's more or less the same as the FA or better)

Moving forwards, I want to make more and lose less, of course. I don't think I will move out from my FA this year at least as I'm pretty busy with many things.
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

Cyath wrote: Fri Oct 04, 2024 4:53 am So I grilled the FA more and he says yeah it's like 10% on good years and 6-7% on bad years. Previously it was worse with other FAs, but at that point I didn't know much about finance. While I kick myself now, as my thread says I also forgive myself because I was still quite sick and I didn't know who to trust.

My FA is also a bit on edge because I keep on asking him questions and he says there is no trust now, or less. I don't think he's lying to me, but I don't see how he can outperform the S&P and a three fund portfolio (which he admits is good)

His argument for using him is that he can take advantage of market swings like NVIDIA this year, and handle asset assocation and similar matters. But a good 3 fund portfolio also has the asset allocation part taken care of, right? (according to my research)

The returns for the fund linked seem to be 25-26%...how is that even possible? I thought the S&P averaged 8-9% per year? (that's more or less the same as the FA or better)

Moving forwards, I want to make more and lose less, of course. I don't think I will move out from my FA this year at least as I'm pretty busy with many things.
1) yes, right
2) he can take advantage of market swings, or take disadvantage of market swings, if he's not able to time it right. and he's not. no one is. if he was, he'd already be a billionaire and had stopped working long ago. and even if one times the market right for say 5 years, it would be very unlikely for him/her to do so continuously for 20 years
3) what 'linked fund returned 25-26%'? if it's the SP500, the S&P 500 is up more than 20% YTD, yes. The S&P averaged 8-9% historically, yes. the two statements are not in contradiction. over a 1y timeframe, you can expect pretty much anything, just check the volatility. even in the long term, we do not know what the future holds. some would expect a 'reversal to the mean' so a correction/crash coming up. but then again... we don't know the future. and yes, we all hope/think that over 10 years we will come out on top of any (again, hopefully) temporary correction or crash, but we do not _know_ it
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hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

A fair comparison, apples to apples, would be FA results over several years vs. your non-FA favorite. If one compares FA to S&P 500 I’d cry foul. Individual investors don’t achieve S&P results either. No one knows the market to track it that accurately. So the best comparison would be your non-FA results over the same period as the FA results. Let’s say 60/40 stocks and bonds. Risk management should also be considered. Hindsight is 20/20.
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

I'm a bit fuzzy on how the cumulative returns are calculated. The figures are due to compound interest, yes?

As in 8-9% each year, compounded, not accounting for taxes?
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

https://investor.vanguard.com/investor- ... allocation

OP look at fig at bottom of this page

the average annual return means that in 10 years to return +100% one need avg annual betwwen 9 and 10%. why less than 10? compounding

I don't see who talked of cumulative returns?

no, taxes not accounted because each one of us pay different taxes, so that'd be impossible or meaningless to include taxes
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Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

I understand most of this. I was wondering where the 25-26% figure in the link came from?
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

Cyath wrote: Tue Oct 08, 2024 5:51 am I understand most of this. I was wondering where the 25-26% figure in the link came from?
https://www.justetf.com/en/etf-profile. ... XD54#chart this link?

Seems pretty clear to me: right under "chart" it says "1 year: 29.72%" a bit better now thanks to recent growth, and then shows a usual line chart.

It is simply: price today divided by price 365 days ago. no compounding.

Am I missing something?
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jg12345
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

sorry, of course I meant price today divided by price 365 days ago = 1.2972 then _minus one_ = 0.2972 = 29.72%.
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hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

Are there any good FAs? Quibble about the numbers if there’s no good answer for the first question. Don’t paint them all with the same brush. Actually the burden of proof lies with the naysayers.
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

https://www.investors.com/etfs-and-fund ... s-passive/

I thought the evidence on FAs vs index funds was quite well established.

"Study after study, though, shows why investors in active mutual funds are fed up. Active funds are generally lousy. In the past five years, 79% of large-cap funds lagged the S&P 500, says the S&P Dow Jones Indices SPIVA Scorecard. And their longer-term track record is even uglier. Nearly 88% of large-cap funds trailed the S&P 500 in the past 15 years. [note: probably the % goes up even more if we take 20 years?]

And it's pretty much the same story across asset classes. Nearly 90% of all midcap and small-cap funds lagged their benchmarks.

What about the argument that portfolio managers are skilled at finding undervalued gems? Not true. In fact, their track record there is even worse. Nearly 94% of large-cap value funds lagged the benchmark.

If active fund managers shine anywhere, it's with bonds. But even there, the indexes still win. Nearly 60% of active bond funds lag the benchmark.

Morningstar found that from 2014 to 2023, just one in every four active funds beat its average indexed peer. "

Also in Jan 2024 the AUM of index passive funds is larger than AUM of active funds. so either investors are silly, or it's better to invest in passive index funds.

Do good financial advisers exist? Maybe, but they do not know it, and we do not know it. picking someone who outperformed the market last 5 years is not indicative of future performance. and since the chance that they perform better than the market over 15 years is 12%, I take the market!
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xxd091
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by xxd091 »

Most ethical financial advisors are moving from stock picking to the financial areas where they can actually financially benefit/help their clients ie estate planning.tax management,wills ,trusts etc
The better ones are also moving to an hourly rate so the client is aware of the advisors actual costs
The cheapness and availability of index equity and bond funds really have removed the need for much financial advice in this former area of their work
xxd091
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by GaryA505 »

xxd091 wrote: Thu Oct 10, 2024 4:16 am Most ethical financial advisors are moving from stock picking to the financial areas where they can actually financially benefit/help their clients ie estate planning.tax management,wills ,trusts etc
The better ones are also moving to an hourly rate so the client is aware of the advisors actual costs
The cheapness and availability of index equity and bond funds really have removed the need for much financial advice in this former area of their work
xxd091
I think this is something that is missed in a lot of these "financial advisor" threads. People seem to focus only on the investment management part of advisement only, ignoring tax planning, retirement planning, estate planning, etc. A good financial advisor, even if not managing investments, can add value in a lot of other ways. In other words, for some people there can be costs to NOT using an advisor that could be much larger than even a 1% AUM fee. Remember, Bogleheads are not the norm.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
jg12345
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

GaryA505 wrote: Thu Oct 10, 2024 9:00 am
xxd091 wrote: Thu Oct 10, 2024 4:16 am Most ethical financial advisors are moving from stock picking to the financial areas where they can actually financially benefit/help their clients ie estate planning.tax management,wills ,trusts etc
The better ones are also moving to an hourly rate so the client is aware of the advisors actual costs
The cheapness and availability of index equity and bond funds really have removed the need for much financial advice in this former area of their work
xxd091
I think this is something that is missed in a lot of these "financial advisor" threads. People seem to focus only on the investment management part of advisement only, ignoring tax planning, retirement planning, estate planning, etc. A good financial advisor, even if not managing investments, can add value in a lot of other ways. In other words, for some people there can be costs to NOT using an advisor that could be much larger than even a 1% AUM fee. Remember, Bogleheads are not the norm.
I totally agree with xxd and you! Although I tend to believe that 1% is still a scam, and as mentioned by xxd the most ethical ones would charge by the hour. all the estate planning/trust/wills I think can be done by charging by the hour. the % payment is used to align incentives towards portfolio growth over time, which is perhaps less of an issue when you need a will, clearly one-off exercise, or tax advice (again, often, although not always, a yearly exercise)

and to clarify why this post is focused on asset management... because OP was asking about it. it started OP being on the fence to ditch their FA due to performance vs market ETFs.

In summary:
1) there is ample evidence FA are not very good at delivering returns above market
2) FA can be useful for other stuff (estate planning, tax, wills,...). Only note for tax and some more specific things, one might need other experts, such as tax accountants, rather than FAs
3) I also think that FA that bill by the hour are to be preferred vs FA that bill by % of AUM
Trying to stay the course
HKexpat
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by HKexpat »

Cyath wrote: Fri Oct 04, 2024 4:53 am The returns for the fund linked seem to be 25-26%...how is that even possible? I thought the S&P averaged 8-9% per year? (that's more or less the same as the FA or better)
Here are the annual returns from the S&P 500 over the past 10 years. Each is calculated as the difference between the last trading day of the previous year and the last trading day of that year: https://www.macrotrends.net/2526/sp-500 ... al-returns

2023: +24%
2022: -19%
2021: +27%
2020: +16%
2019: +29%
2018: -6%
2017: +19%
2016: +10%
2015: -1%
2014: +11%
2013: +30%

(This is the return excluding dividends and not accounting for taxes.)

I think people vastly underestimate the returns of the S&P 500 and the volatility: it could just as well be -30% next year. And over a few days, you might see 20% of your portfolio's value disappear. The obvious takeaway is that you actually need to stay invested in order to realize the cumulative returns... people who sell after a 20% crash "because it will drop further!" and then buy back only once the panic is over (and prices have recovered) are doing much worse.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

A good reply that. And Boglehead blog members will follow the rules and stay invested.
Yet there are those less savvy investors who would benefit from financial advice. Even among the Boglehead community we (yes me) become distracted. Be it by health, family or occurrences not anticipated.
The last item is related to where one is in the life cycle. Making it harder to see eye to eye. I’m okay with that. I’m getting in towards the go slow years. My DW isn’t far behind.
HKexpat
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by HKexpat »

A big issue is that most "financial advisers" are really "stock pickers." They don't know much about tax or estate law, where an expert can add a lot of value. That's why "financial advice" can be extremely useful, even as "financial advisers" are not. Most people should consult tax and estate lawyers at least once every few years as their situation changes. Those people charge around $500 per hour, which is still a much better deal than a percentage of assets.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

I am not too smart but I now understand that FA isn’t needed for the accumulation phase. I automatically didn’t use one during my working years. I couldn’t really as my 401k where my assets were invested didn’t work that way. But when I retired I moved to tIRA and Roth in FA company accounts. I’d been working with this individual for years so I knew what I was getting into.
The decimilation phase is much different than buy and hold. I’m working with tax, estate, gifting and decisions about asset sales for withdrawals. I can afford good advice, I know the reputation and results of my FA. I believe you get what you pay for. No free lunch etc.
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Valuethinker »

HKexpat wrote: Sun Oct 13, 2024 2:54 am A big issue is that most "financial advisers" are really "stock pickers." They don't know much about tax or estate law, where an expert can add a lot of value. That's why "financial advice" can be extremely useful, even as "financial advisers" are not. Most people should consult tax and estate lawyers at least once every few years as their situation changes. Those people charge around $500 per hour, which is still a much better deal than a percentage of assets.
I agree with this.

Helping to think through the future.

The other issue is what to do as your cognitive ability declines. Is your partner able to handle the load?

Relative to women, men are prone to taking more financial risk. That's another factor.
jg12345
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

I might be missing something but...
people who deal with tax are not financial advisers and viceversa. they have different professional associations, different tests, etc.

[I agree on the main point ofc: stock pickers = useless, damageful, tax advice = great, I needed it recently due to changing country and return on the money I spent for a 1h consultation was definitely very good!]
Trying to stay the course
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

Valuethinker wrote: Mon Oct 14, 2024 3:13 am
HKexpat wrote: Sun Oct 13, 2024 2:54 am A big issue is that most "financial advisers" are really "stock pickers." They don't know much about tax or estate law, where an expert can add a lot of value. That's why "financial advice" can be extremely useful, even as "financial advisers" are not. Most people should consult tax and estate lawyers at least once every few years as their situation changes. Those people charge around $500 per hour, which is still a much better deal than a percentage of assets.
I agree with this.

Helping to think through the future.

The other issue is what to do as your cognitive ability declines. Is your partner able to handle the load?

Relative to women, men are prone to taking more financial risk. That's another factor.
“Most FA are stock pickers….”
What about the ones that aren’t? Or the ones that know tax code and estate planning? So if I choose poorly whose fault is it? What if my FA knows better than I? My health care providers certainly know more than I. Trust, verify, rinse and repeat.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

Valuethinker wrote: Mon Oct 14, 2024 3:13 am
HKexpat wrote: Sun Oct 13, 2024 2:54 am A big issue is that most "financial advisers" are really "stock pickers." They don't know much about tax or estate law, where an expert can add a lot of value. That's why "financial advice" can be extremely useful, even as "financial advisers" are not. Most people should consult tax and estate lawyers at least once every few years as their situation changes. Those people charge around $500 per hour, which is still a much better deal than a percentage of assets.
I agree with this.

Helping to think through the future.

The other issue is what to do as your cognitive ability declines. Is your partner able to handle the load?

Relative to women, men are prone to taking more financial risk. That's another factor.
“Most FA are stock pickers….”
What about the ones that aren’t? Or the ones that know tax code and estate planning? So if I choose poorly whose fault is it? What if my FA knows better than I? My health care providers certainly know more than I. Trust, verify, rinse and repeat.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

HKexpat wrote: Sat Oct 12, 2024 12:08 am
Cyath wrote: Fri Oct 04, 2024 4:53 am The returns for the fund linked seem to be 25-26%...how is that even possible? I thought the S&P averaged 8-9% per year? (that's more or less the same as the FA or better)
Here are the annual returns from the S&P 500 over the past 10 years. Each is calculated as the difference between the last trading day of the previous year and the last trading day of that year: https://www.macrotrends.net/2526/sp-500 ... al-returns

2023: +24%
2022: -19%
2021: +27%
2020: +16%
2019: +29%
2018: -6%
2017: +19%
2016: +10%
2015: -1%
2014: +11%
2013: +30%

(This is the return excluding dividends and not accounting for taxes.)

I think people vastly underestimate the returns of the S&P 500 and the volatility: it could just as well be -30% next year. And over a few days, you might see 20% of your portfolio's value disappear. The obvious takeaway is that you actually need to stay invested in order to realize the cumulative returns... people who sell after a 20% crash "because it will drop further!" and then buy back only once the panic is over (and prices have recovered) are doing much worse.
If the OP can achieve S&P 500 results consistently then he/she couldn’t do better with an FA. In effect this person who achieved market results is an FA, why double up?
No, looking at past S&P results isn’t going to answer the question unless the OP compares it to their own DIY results. S&P performance is the gold (not a pun) standard. We all know that. FA shouldn’t be expected to achieve this level of performance.
Bogleheads are well aware of financial issues. Most aren’t because most aren’t Bogleheads. I get my market returns from information from other sources. You see one investor you’ve seen one investor. Logic only goes so far when you are dealing with human behavior over several decades. It’s possible to put tIRA funds into a FA run account while the bulk of your funds are invested in a 401k with your employer.
Example: I’m pretty good I achieved 300 on my test. Doesn’t it seem important to know if others achieved 350 or 250? Apples to gold isn’t helpful.
HKexpat
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by HKexpat »

hvaclorax wrote: Sat Oct 19, 2024 5:22 am S&P performance is the gold (not a pun) standard. We all know that. FA shouldn’t be expected to achieve this level of performance.
Why not? Sure, there's a little bit of drag from the management fees of VUAG (0.07%), from making monthly contributions (as a result of being able to save monthly, not holding cash on the side), and withholding tax on dividends. A little bit of that is offset by funds getting revenue from lending shares to short sellers. All of that brings you within a fraction of a percent of the S&P 500 returns. It's probably the easiest of all investment strategies: take your savings, put 100% into VUAG, and don't do anything else. No rebalancing, no following the news, no ladders, and no currency hedging required. Maybe you'll get 23.6% instead of 24%, and depending on your home country and tax treatment, you may also have some drag from capital gains taxes -- but that's unavoidable and applies to all investments. (I suppose I would do VWRA instead, just to get global diversification, but not much of a difference.)

We shouldn't expect a FA to outperform the market, given all the research on active stock picking and the obvious implication that if someone could reliably outperform the market, they wouldn't waste their time on retail consumer portfolios. And, of course, that's the main argument for not paying someone 1% of your assets to try and do so. But I don't get why you would pay someone 1% of your assets to underperform an investment you can trivially make yourself. It simply does not take much technical knowledge to set up a recurring investment on IBKR, and if the website is intimidating, you can do it over the phone.

A financial adviser could make that simple investment for you and focus their time on tax advice and estate planning... but, of course, they don't. They pick 30 different investments so that it looks like they're doing work and clients think it's too hard to do on their own. And they follow the news so that they can tell their client they own NVIDIA (even if they bought it after the price had surged). That's how they justify an annual fee, rather than billing hourly like lawyers.
Dottie57
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Dottie57 »

Cyath wrote: Tue Sep 24, 2024 8:26 pm I use a lot of forums, so I'm familiar with the divergent opinions phenomenon. Generally I use my intuition and try to listen to the people who know what they are talking about and seem genuinely interested in helping.

I have learnt much from the thread. I wish everyone well and I always want to keep learning and growing. Keep the info coming! :)
Intuition is not a great way to handle finances. Having a plan , executing it and looking at results works better. Everyone is at the mercy of the market. No one has a crystal ball.
Life is more than grinding it out in some drab office setting for an arbitrary number. This isn't a videogame where the higher score is better. -Nathan Drake
Dottie57
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Dottie57 »

Cyath wrote: Tue Sep 24, 2024 8:26 pm I use a lot of forums, so I'm familiar with the divergent opinions phenomenon. Generally I use my intuition and try to listen to the people who know what they are talking about and seem genuinely interested in helping.

I have learnt much from the thread. I wish everyone well and I always want to keep learning and growing. Keep the info coming! :)
Intuition is not a great way to handle finances. Having a plan , executing it and looking at results works better. Everyone is at the mercy of the market. No one has a crystal ball.
Life is more than grinding it out in some drab office setting for an arbitrary number. This isn't a videogame where the higher score is better. -Nathan Drake
Topic Author
Cyath
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Cyath »

I don't just use intution, but also strategies. Both are better than just one, no?

I have asked my FA to generate returns for the past 3 years which he hsan't done yet.
jg12345
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

Cyath wrote: Mon Oct 21, 2024 2:27 am I don't just use intution, but also strategies. Both are better than just one, no?

I have asked my FA to generate returns for the past 3 years which he hsan't done yet.
No. the strategy available to you is substantially and consistently inferior than the strategies of traders informed by million dollars worth of data, invaluable (or very expensive) work of PhDs in quantitative finance designing models and computer scientists putting those models into algorithms/other software, invaluable work (or very expensive) work of very smart finance graduates who work 100h/week just to get paid more and more. Those strategies determine market prices, so your only available strategy is to buy the market as an efficient byproduct of their work

If you think your (retail) FA has a better strategy than you, think again: s/he is in the same situation as you

If you need a tax advisor or estate planning advice, then go for it, and pay by the hour.
Trying to stay the course
gavinsiu
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by gavinsiu »

It's true that many bogleheads tend to avoid Financial Advisors. This is because most of them do not feel Financial Advisors add value in terms of portfolio construction and management. It's also true that many boglehead use Financial Advisors. Most have spouse that are not bogleheads and they fear what would happen if they were to pass away. Just to disclose, I had setup a FA for my mom for this purpose even though I could easily manage her account. I am concern that if I pass away, she will need guidance. The FA serves not a way to increase return but as an insurance policy.

One problem with FA is that there are bad FA and good FA's. Similar to hiring a person to fix your roof, most people have little knowledge to evaluate if the contractor is competent or not. This is where you have to be a bit careful since the consequence of failure is great. When a family friend retired, he hired an investment advisor to invest his lump sum. Unfortunately, a lot of it got invested in Enron and so no more lump sum. There are a lot of advisors who's job is to sell you stuff. You think that they make money off your AUM, but they might be making money on the side. There are a lot of good FA, but you have to be vigilant. You can't even go by your friend's recommendation because they might know nothing. This makes hiring an advisor to be a risky move.

Think also from the FA's point of view. This is a business and the FA must benefit. How much money are you going to make the FA? If you have 50 million, you are the advisor's favorite client. The loss of your business means a huge hit to the advisor's bottom line. What if you have 500K or even less. Well, you probably barely worth the effort. They might sign you up in hopes that your asset will grow but they are not going to expend as much effort as the bigger client. In fact, if you create too much work for the FA, they will fire you as a customer. I tried to tread a bit carefully with my mom's advisor. They managed billions, so my mom is probably not their biggest client.

It's ironic that the people who would have the least money need an advisor the most to guide them earlier on, but they cannot afford one. Good luck in your search.
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by Northern Flicker »

jg12345 wrote: Wed Oct 09, 2024 9:41 pm https://www.investors.com/etfs-and-fund ... s-passive/

I thought the evidence on FAs vs index funds was quite well established.
Whether or not you have a FA and whether active or passive management is used for your portfolio are two questions that technically are independent.

FAs can choose to allocate to index funds and DIY investors can choose to use active management.

Vanguard has an advisory service that allocates to index funds, and charges 0.3% on AUM for most clients (a bit lower for high or very high net worth clients).
jg12345
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by jg12345 »

Northern Flicker wrote: Wed Oct 23, 2024 12:09 am
jg12345 wrote: Wed Oct 09, 2024 9:41 pm https://www.investors.com/etfs-and-fund ... s-passive/

I thought the evidence on FAs vs index funds was quite well established.
Whether or not you have a FA and whether active or passive management is used for your portfolio are two questions that technically are independent.

FAs can choose to allocate to index funds and DIY investors can choose to use active management.

Vanguard has an advisory service that allocates to index funds, and charges 0.3% on AUM for most clients (a bit lower for high or very high net worth clients).
thanks for the clarification, that's a very good point. I stand corrected, I should have said: 'the evidence on active management vs passive management is well established'.

For OP: this does not matter much for you as your FA is an active manager.
Trying to stay the course
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapor

Post by hvaclorax »

gavinsiu wrote: Tue Oct 22, 2024 11:41 pm It's true that many bogleheads tend to avoid Financial Advisors. This is because most of them do not feel Financial Advisors add value in terms of portfolio construction and management. It's also true that many boglehead use Financial Advisors. Most have spouse that are not bogleheads and they fear what would happen if they were to pass away. Just to disclose, I had setup a FA for my mom for this purpose even though I could easily manage her account. I am concern that if I pass away, she will need guidance. The FA serves not a way to increase return but as an insurance policy.

One problem with FA is that there are bad FA and good FA's. Similar to hiring a person to fix your roof, most people have little knowledge to evaluate if the contractor is competent or not. This is where you have to be a bit careful since the consequence of failure is great. When a family friend retired, he hired an investment advisor to invest his lump sum. Unfortunately, a lot of it got invested in Enron and so no more lump sum. There are a lot of advisors who's job is to sell you stuff. You think that they make money off your AUM, but they might be making money on the side. There are a lot of good FA, but you have to be vigilant. You can't even go by your friend's recommendation because they might know nothing. This makes hiring an advisor to be a risky move.

Think also from the FA's point of view. This is a business and the FA must benefit. How much money are you going to make the FA? If you have 50 million, you are the advisor's favorite client. The loss of your business means a huge hit to the advisor's bottom line. What if you have 500K or even less. Well, you probably barely worth the effort. They might sign you up in hopes that your asset will grow but they are not going to expend as much effort as the bigger client. In fact, if you create too much work for the FA, they will fire you as a customer. I tried to tread a bit carefully with my mom's advisor. They managed billions, so my mom is probably not their biggest client.

It's ironic that the people who would have the least money need an advisor the most to guide them earlier on, but they cannot afford one. Good luck in your search.
Thanks for your reply.
FA advice is not purely monetary. As far as their charges, you get what you pay for. There is an assumption that Boglehead can substitute their knowledge for that of an.FA. Given the nature of obtaining advice this way, I would say you get what you pay for. Using attorneys and estate planner is something that I hope would be obvious to anyone. Those using an FA included. A good FA will point this out.
I suspect too many if not all Bogleheads will use some other sources of input, other than this forum. There are not very many things that I would go out and act upon just given my.Bogleheads advice.
Investors need to know what questions to ask. A decision made by the BH forum skews to a loose consensus making it difficult to know the best answer. Face to face is much different than using BH forum.
Like you, I have DIY in my DNA. But when I retired I started working with an FA after my funds were transferred to a tIRA. And it looked like a substantial amount with substantial risks. I couldn’t and can’t imagine DIY now. Maybe with a smaller amount I’d be okay with DIY.
The benefit of an FA can’t be simplified by mathematics. Math ignores the other value for an FA. I’m ok with paying for advice. Is frugality the driver of this FA avoidance by those investors earlier in the investment cycle?
My best example is during the 2008 stock decline. My FA was able to put things into context and help me not to react foolishly. I actually put more money into stocks, and I know this is something that my natural inclination would not have done. This is to say my FA has encouraged me to take a bit more risk than I otherwise would have. Over the last 30 years this has benefited me greatly.
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapor

Post by gavinsiu »

hvaclorax wrote: Wed Oct 23, 2024 9:58 am Thanks for your reply.
FA advice is not purely monetary. As far as their charges, you get what you pay for. There is an assumption that Boglehead can substitute their knowledge for that of an.FA. Given the nature of obtaining advice this way, I would say you get what you pay for. Using attorneys and estate planner is something that I hope would be obvious to anyone. Those using an FA included. A good FA will point this out.
I suspect too many if not all Bogleheads will use some other sources of input, other than this forum. There are not very many things that I would go out and act upon just given my.Bogleheads advice.
Investors need to know what questions to ask. A decision made by the BH forum skews to a loose consensus making it difficult to know the best answer. Face to face is much different than using BH forum.
Like you, I have DIY in my DNA. But when I retired I started working with an FA after my funds were transferred to a tIRA. And it looked like a substantial amount with substantial risks. I couldn’t and can’t imagine DIY now. Maybe with a smaller amount I’d be okay with DIY.
The benefit of an FA can’t be simplified by mathematics. Math ignores the other value for an FA. I’m ok with paying for advice. Is frugality the driver of this FA avoidance by those investors earlier in the investment cycle?
My best example is during the 2008 stock decline. My FA was able to put things into context and help me not to react foolishly. I actually put more money into stocks, and I know this is something that my natural inclination would not have done. This is to say my FA has encouraged me to take a bit more risk than I otherwise would have. Over the last 30 years this has benefited me greatly.
Yes, I agree with a lot of your points, a good chunk of FA's value is in their Financial Planning aspect and behavior couching. A good FA should be able to help their client figure out their financial goals, help them get there, and do some hand holding along the way. A typical investor will probably jump on the latest trend like buying Nivida and then freak out when it crashes and sell out. This cycle of buying high and selling low greatly reduces your return. If you are that type of investors, a FA will definitely help. In addition, there are things you definitely should not do yourself like Estate Planning.

I think the OP's original goal for a FA appears to be to have a higher return, which I feel a FA cannot do. I feel that portfolio management is the weakest part of a FA. This is not entirely FA's fault. A good portfolio may consist of a few index fund. For example a all world equity, and a all world bond. However, if the FA proposed this portfolio, their customer will feel they have been cheated and get fired. As a result, the portfolio typically looks overly complicated like having 20 different ETF. FA aren't particularly great at figuring out someone's risk profile either. Most use some sort of questiionaire, but often the client's true portfolio allocation developed over time.

At least in the US, hiring a FA can be quite risky. My late sister attempted to hire an advisor recommended by several of her doctor friends and got really bad vibes that he was trying to sell her on stuff she does not need. There are a lot of sales person masquerading as FA. I feel that to hire a FA, yoiu need to know enough to hire one or employ another person with expertise to hire one (my mom employed me). This does not men FA is bad, but proceed with caution.
hvaclorax
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Re: Are there actually any good financial advisers? Wondering about what my FA said. [Singapore]

Post by hvaclorax »

HKexpat wrote: Sat Oct 19, 2024 10:06 pm
hvaclorax wrote: Sat Oct 19, 2024 5:22 am S&P performance is the gold (not a pun) standard. We all know that. FA shouldn’t be expected to achieve this level of performance.
Why not? Sure, there's a little bit of drag from the management fees of VUAG (0.07%), from making monthly contributions (as a result of being able to save monthly, not holding cash on the side), and withholding tax on dividends. A little bit of that is offset by funds getting revenue from lending shares to short sellers. All of that brings you within a fraction of a percent of the S&P 500 returns. It's probably the easiest of all investment strategies: take your savings, put 100% into VUAG, and don't do anything else. No rebalancing, no following the news, no ladders, and no currency hedging required. Maybe you'll get 23.6% instead of 24%, and depending on your home country and tax treatment, you may also have some drag from capital gains taxes -- but that's unavoidable and applies to all investments. (I suppose I would do VWRA instead, just to get global diversification, but not much of a difference.)

We shouldn't expect a FA to outperform the market, given all the research on active stock picking and the obvious implication that if someone could reliably outperform the market, they wouldn't waste their time on retail consumer portfolios. And, of course, that's the main argument for not paying someone 1% of your assets to try and do so. But I don't get why you would pay someone 1% of your assets to underperform an investment you can trivially make yourself. It simply does not take much technical knowledge to set up a recurring investment on IBKR, and if the website is intimidating, you can do it over the phone.

A financial adviser could make that simple investment for you and focus their time on tax advice and estate planning... but, of course, they don't. They pick 30 different investments so that it looks like they're doing work and clients think it's too hard to do on their own. And they follow the news so that they can tell their client they own NVIDIA (even if they bought it after the price had surged). That's how they justify an annual fee, rather than billing hourly like lawyers.
Re: Fist paragraph mentioned nothing about the human factor. The S&P results don’t represent what the DIY investors get any more than they do for the FA. Apparently humans can’t see the future be they FA or DIY.
Second paragraph rebuttal is mostly the same as my comment above. Apparently someone who knows what the FA will advise also knows in advance who is better. And would never make a mistake worse than the FA. So that person can be my FA.
Bottom line is humans act differently than the pure benchmark math implies. We’re discussing S&P results and assuming the DIY investors get that same result. Omniscience? Seems a bit of a stretch. I’ll admit I’ve made my share of mistakes. Even a person’s IQ can vary from day to day. Bad day, dog died who knows what can impact decisions? Set and forget won’t avoid it.
Respectfully, HVAC
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