How to provide unsolicited investing advice
How to provide unsolicited investing advice
My Mom died of lung cancer (smoker) several months ago (Dad died 10 years ago from sudden heart attack, also a smoker). So it goes.
As a result, myself and my two siblings have inherited assets from Mom’s financial accounts. The taxable brokerage account at a particular bank contained two mutual funds that we inherited outright, BCICX and JNBCX, which are both essentially actively managed income producing funds with ER’s of 1.57% and 1.25% respectively. My Mom used a financial advisor at this bank, due to not knowing enough to manage her own finances. So alas, I estimate that at least $30k+ was sacrificed to Blackrock and JP Morgan through the ERs over the years.
One of my siblings desired to invest the majority of the financial assets. However, they do not have hardly any investing knowledge. In a conversation a month or two ago, I warned this sibling about the high fees of those funds, and advocated strongly for putting the money into different lower fee funds. I said that Mom paid $30k+ in fees, when she should have paid only $300+, just to drive the point home. However, I didn’t go as far as to recommend what exactly they put the money into. At the time, the sibling seemed concerned about the fees and I thought they would take some action.
Since this conversation, I talked to the sibling again, and they disclosed their plan for managing the inherited funds. They have started working with the same financial advisor Mom used, and have decided to leave the money in BCICX and JNBCX (the advisor told them those were good low risk funds). Oof.
Additionally, there was a Traditional IRA component of our inheritance, which the sibling is taking the Inherited IRA route with and pacing distributions each year to ensure the funds are withdrawn within the required time frame. At the same Financial Advisor’s direction, sibling is putting these funds in some other mutual fund that had a fancy name I can’t recall that is more growth oriented, but I have to imagine it is another actively managed fund with an outrageous ER.
Sibling is a single parent with two children. Financially was very rocky for the two decades of their adult life. Finally is at a good place with job income but is way behind on retirement savings. I would love to see the funds redirected to something more akin to a Boglehead methodology, rather than being used to farm income for JP Morgan and Blackrock, for the sake of sibling and sibling’s children. Even just a no brainer retirement date fund or fixed 60/40 fund would be (IMO) a massive improvement.
However, I’m unsure on how to approach this any further, and if approaching it at all is even appropriate. My initial fee conversation apparently didn’t trigger any call to action on how best to change course. I suspect they just feel more comfortable doing what an FA tells them to do. I don’t want to trample sibling’s pride (I am almost two decades younger btw). One thing I am telling myself, is that they could do much worse, such as by withdrawing the funds and making a visit to Foreign Cars Italia.
Question is, do I try again? If so, how do I approach?
Thanks for any insights.
As a result, myself and my two siblings have inherited assets from Mom’s financial accounts. The taxable brokerage account at a particular bank contained two mutual funds that we inherited outright, BCICX and JNBCX, which are both essentially actively managed income producing funds with ER’s of 1.57% and 1.25% respectively. My Mom used a financial advisor at this bank, due to not knowing enough to manage her own finances. So alas, I estimate that at least $30k+ was sacrificed to Blackrock and JP Morgan through the ERs over the years.
One of my siblings desired to invest the majority of the financial assets. However, they do not have hardly any investing knowledge. In a conversation a month or two ago, I warned this sibling about the high fees of those funds, and advocated strongly for putting the money into different lower fee funds. I said that Mom paid $30k+ in fees, when she should have paid only $300+, just to drive the point home. However, I didn’t go as far as to recommend what exactly they put the money into. At the time, the sibling seemed concerned about the fees and I thought they would take some action.
Since this conversation, I talked to the sibling again, and they disclosed their plan for managing the inherited funds. They have started working with the same financial advisor Mom used, and have decided to leave the money in BCICX and JNBCX (the advisor told them those were good low risk funds). Oof.
Additionally, there was a Traditional IRA component of our inheritance, which the sibling is taking the Inherited IRA route with and pacing distributions each year to ensure the funds are withdrawn within the required time frame. At the same Financial Advisor’s direction, sibling is putting these funds in some other mutual fund that had a fancy name I can’t recall that is more growth oriented, but I have to imagine it is another actively managed fund with an outrageous ER.
Sibling is a single parent with two children. Financially was very rocky for the two decades of their adult life. Finally is at a good place with job income but is way behind on retirement savings. I would love to see the funds redirected to something more akin to a Boglehead methodology, rather than being used to farm income for JP Morgan and Blackrock, for the sake of sibling and sibling’s children. Even just a no brainer retirement date fund or fixed 60/40 fund would be (IMO) a massive improvement.
However, I’m unsure on how to approach this any further, and if approaching it at all is even appropriate. My initial fee conversation apparently didn’t trigger any call to action on how best to change course. I suspect they just feel more comfortable doing what an FA tells them to do. I don’t want to trample sibling’s pride (I am almost two decades younger btw). One thing I am telling myself, is that they could do much worse, such as by withdrawing the funds and making a visit to Foreign Cars Italia.
Question is, do I try again? If so, how do I approach?
Thanks for any insights.
Re: How to provide unsolicited investing advice
Will you be providing refunds if your advice results in lost money / gains?
not financial advice
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Re: How to provide unsolicited investing advice
Welcome to the forum!
Your sibling is lucky to have a caring sibling like you. However, after two conversations about this with your sibling, consider saying no more. Unless you believe your sibling is incompetent to manage [edit- their] financial affairs or will expect you to support [edit-them] if [edit- they] runs short financially in retirement.
Your sibling is lucky to have a caring sibling like you. However, after two conversations about this with your sibling, consider saying no more. Unless you believe your sibling is incompetent to manage [edit- their] financial affairs or will expect you to support [edit-them] if [edit- they] runs short financially in retirement.
Last edited by HomeStretch on Thu Mar 30, 2023 2:54 pm, edited 1 time in total.
Re: How to provide unsolicited investing advice
Leave it alone. You did your due diligence. It's his/her business, nobody else's. If he/she is comfortable with the advisor and wants to continue, so be it. This has the added benefit of you not getting the blame if the investment tanks in a down year based on a recommendation you provide.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. |
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Re: How to provide unsolicited investing advice
Walk away from it. It’s their deal.
My parents would benefit from low cost funds but choose an advisor because that way they don’t have to blame each other for any changes in the market, they can point to the advisor.
I manage my finances, they manage theirs.
My parents would benefit from low cost funds but choose an advisor because that way they don’t have to blame each other for any changes in the market, they can point to the advisor.
I manage my finances, they manage theirs.
Re: How to provide unsolicited investing advice
This is exactly why I don't mess with my mom's portfolio. She is with a financial advisor and I know she could be paying far less in fees and have a less complicated portfolio but I don't want to take any blame for "bad years" from either her or my brother. Her advisor at least is actively trying to work in her best interest, from what I gather after talking to them and analyzing her portfolio. So it's not a Edward Jones situation luckily.samsoes wrote: ↑Thu Mar 30, 2023 1:35 pm Leave it alone. You did your due diligence. It's his/her business, nobody else's. If he/she is comfortable with the advisor and wants to continue, so be it. This has the added benefit of you not getting the blame if the investment tanks in a down year based on a recommendation you provide.
Re: How to provide unsolicited investing advice
Thank you, and thank you!HomeStretch wrote: ↑Thu Mar 30, 2023 1:34 pm Welcome to the forum!
Your sibling is lucky to have a caring sibling like you.
I enjoy this forum very much
Re: How to provide unsolicited investing advice
People thought 60-40 was "safe" until the Fed started jacking up rates and bonds tanked.
People thought Vanguard Target Date funds were great until they unleashed a tax bomb.
Plausible deniability is valuable.
People thought Vanguard Target Date funds were great until they unleashed a tax bomb.
Plausible deniability is valuable.
not financial advice
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Re: How to provide unsolicited investing advice
Your parents paid $30k in fees for the advisor but much did did they avoid losing by not panic selling during downturns?
Re: How to provide unsolicited investing advice
That’s a great point. I think the FA’s most beneficial service provided was as an emotional support for my Mom when her balances declined during downturns. Maybe that saved her more than $30k .CletusCaddy wrote: ↑Thu Mar 30, 2023 1:47 pm Your parents paid $30k in fees for the advisor but much did did they avoid losing by not panic selling during downturns?
Re: How to provide unsolicited investing advice
Sadly, not everyone has been given the gifts required to be a Boglehead (ability to think logically, invest on a disciplined schedule, take enough risk to increase their portfolio, but not so much that they freak out and sell everything in a dip).
So for those folks, paying a financial advisor is a good idea if it keeps them saving. The cost of not saving would be much worse. The bright side is your sibling is not withdrawing and buying sports cars.
One thing I've noticed on this forum: an inability to recognize that people are different than us. I know your motives are pure, that you want your sibling to manage the money in a low-cost way. But your sibling is not you.
This sibling may have their hands full raising two children alone. I've done that, and I pretty much left my portfolio alone during those demanding years. I remember coming home from work and standing up to pay my bills on my computer at the breakfast bar after dinner, because if I sat down I would fall asleep.
Kudos to your sibling for getting employment and doing better. Who knows, maybe your sibling will be a Boglehead when they have more time and an empty nest.
So for those folks, paying a financial advisor is a good idea if it keeps them saving. The cost of not saving would be much worse. The bright side is your sibling is not withdrawing and buying sports cars.
One thing I've noticed on this forum: an inability to recognize that people are different than us. I know your motives are pure, that you want your sibling to manage the money in a low-cost way. But your sibling is not you.
This sibling may have their hands full raising two children alone. I've done that, and I pretty much left my portfolio alone during those demanding years. I remember coming home from work and standing up to pay my bills on my computer at the breakfast bar after dinner, because if I sat down I would fall asleep.
Kudos to your sibling for getting employment and doing better. Who knows, maybe your sibling will be a Boglehead when they have more time and an empty nest.
Re: How to provide unsolicited investing advice
I don’t give it as advice. I might, if the topic comes up, say something like “I just use a target date fund, but you know me, I like things simple and automatic” or “I have mine in cheap Vanguard index funds, but you know me, I’m a tightwad”
It isn’t advice - but it does offer terms that if googled, should point in the right direction.
Also, it makes it not about what a person “should” do, but more about choice or preference - which is more appealing.
It isn’t advice - but it does offer terms that if googled, should point in the right direction.
Also, it makes it not about what a person “should” do, but more about choice or preference - which is more appealing.
- TomatoTomahto
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Re: How to provide unsolicited investing advice
OP, I recommended a Vanguard Target Date fund to a relative who is extremely challenged with financial matters, math, following directions with more than 2 steps, etc. There was no way to explain rebalancing and such to them.
When that tax bomb hit, I was kicking myself, and it was only because of some good (and costly) good deeds that we had done previously that the relative didn't think it was intentional.
No good deed goes unpunished.
I get the FI part but not the RE part of FIRE.
Re: How to provide unsolicited investing advice
Good points. I guess rather than me stating that a Target Date Fund or 60/40 fund would be better, I should have said there must be a better way to achieve the desired/similar risk/return while reducing fees.
- burritoLover
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Re: How to provide unsolicited investing advice
Since they aren't investing in individual stocks or crypto, I'd say drop it.
Re: How to provide unsolicited investing advice
I'd hate to give up! Education and knowledge are everyone's best superpower. I would use the simple chart that dramatically shows the funds lost to expenses, and find some simple references on investing fundamentals. The pamphlet "if you can" is often touted on this site as a good primer. How into reading non-fiction is this person? Lots of good books, either Bogle's Common sense, or Irrational Exuberance, or Four Pillars of Investing.... Her future is at stake. Otherwise, a decent and still quite cheaper option is Vanguard's PAS or a plain Target date fund. Possibly show her how these exact funds did vs Total Stock over time....
https://www.bogleheads.org/wiki/How_muc ... y_years%3F
Edit to add: Ok, I cave. Can't never tell nobody better when they have drunk the Koolaid. Sigh. I've even known otherwise well educated people say "you get what you pay for"!!!
https://www.bogleheads.org/wiki/How_muc ... y_years%3F
Edit to add: Ok, I cave. Can't never tell nobody better when they have drunk the Koolaid. Sigh. I've even known otherwise well educated people say "you get what you pay for"!!!
Last edited by CAsage on Thu Mar 30, 2023 6:41 pm, edited 1 time in total.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
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Re: How to provide unsolicited investing advice
I assume you have control over your portion of the inheritance, investments included?
If you do, then it sounds like you are asking whether you should offer unsolicited advice about your sibling's investment strategy with their portion of the inheritance.
I wouldn't. You've already said your piece, and she didn't want to take your advice. Leave it at that. If she's not looking to you to subsidize her retirement, then it isn't your business what she does with her money.
If you do, then it sounds like you are asking whether you should offer unsolicited advice about your sibling's investment strategy with their portion of the inheritance.
I wouldn't. You've already said your piece, and she didn't want to take your advice. Leave it at that. If she's not looking to you to subsidize her retirement, then it isn't your business what she does with her money.
Re: How to provide unsolicited investing advice
I hate giving up too, but I am for now. They are not likely to pick up the research / self-education project. If sibling brings it up themselves or asks me how I’m managing things, then I may try to slyly nudge things a different direction again. The now multigenerational fleecing (if I may be perhaps somewhat hyperbolic) is unfortunate, but as mentioned, is far from a worst case outcome.CAsage wrote: ↑Thu Mar 30, 2023 1:59 pm I'd hate to give up! Education and knowledge are everyone's best superpower. I would use the simple chart that dramatically shows the funds lost to expenses, and find some simple references on investing fundamentals. The pamphlet "if you can" is often touted on this site as a good primer. How into reading non-fiction is this person? Lots of good books, either Bogle's Common sense, or Irrational Exuberance, or Four Pillars of Investing.... Her future is at stake. Otherwise, a decent and still quite cheaper option is Vanguard's PAS or a plain Target date fund. Possibly show her how these exact funds did vs Total Stock over time....
https://www.bogleheads.org/wiki/How_muc ... y_years%3F
Re: How to provide unsolicited investing advice
Yes, I realize now my wording was unclear, but we each inherited our own 1/3. Thanks for your thoughtful comments.tashnewbie wrote: ↑Thu Mar 30, 2023 2:35 pm I assume you have control over your portion of the inheritance, investments included?
If you do, then it sounds like you are asking whether you should offer unsolicited advice about your sibling's investment strategy with their portion of the inheritance.
I wouldn't. You've already said your piece, and she didn't want to take your advice. Leave it at that. If she's not looking to you to subsidize her retirement, then it isn't your business what she does with her money.
- Hacksawdave
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Re: How to provide unsolicited investing advice
Horse water, water horse. I have tried a few times to help my siblings on financial matters, and while it is a noble thing to help, the final decision must be made on their own. Depending on how your state law works, I would think the remaining assets after the estate is settled would be divided up three ways and liquidated.
They are going to do what they want to do. You did your good deed. Sometimes a sizable amount of money has to go poof and get squandered.
They are going to do what they want to do. You did your good deed. Sometimes a sizable amount of money has to go poof and get squandered.
Re: How to provide unsolicited investing advice
I don't even give solicited investing advice. Too much downside.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: How to provide unsolicited investing advice
+100. I don’t provide advice when I’m asked, much less unsolicited. If I am asked, I recommend applicable books that I know could help. While we care most about family & friends, if they don’t understand investing they will be upset when inevitable downturns hit and you didn’t prevent any loss for them.
You only live once...
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Re: How to provide unsolicited investing advice
Maybe the bank financial advisor (FA) will “provide refunds if his/her advice results in lost money”? Who knows?
If the FA advice results in gains, I would think the FA will make more money.
bill
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Re: How to provide unsolicited investing advice
I think it depends on their fee structure. If a FA charges 1% AUM, yes technically they make more if the assets perform, but they already make a lot from holding customer's assets alone.billfromct wrote: ↑Thu Mar 30, 2023 4:53 pm Maybe the bank financial advisor (FA) will “provide refunds if his/her advice results in lost money”? Who knows?
If the FA advice results in gains, I would think the FA will make more money.
bill
A 20% perf-fee is more honest in this regard; if the assets don't appreciate then they make nothing.
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Re: How to provide unsolicited investing advice
Exactly. Even Bogleheads get cold feet as evidenced by the kind of threads that pop up around here when the market crashes. Maybe those who post here get talked out of selling, maybe they don’t. But what chances does your sibling have who would never come to this site?Brazer wrote: ↑Thu Mar 30, 2023 1:51 pmThat’s a great point. I think the FA’s most beneficial service provided was as an emotional support for my Mom when her balances declined during downturns. Maybe that saved her more than $30k .CletusCaddy wrote: ↑Thu Mar 30, 2023 1:47 pm Your parents paid $30k in fees for the advisor but much did did they avoid losing by not panic selling during downturns?
Re: How to provide unsolicited investing advice
I would point them to Bill Bernstein's "If You Can". Free PDF download here: https://www.etf.com/docs/IfYouCan.pdf
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: How to provide unsolicited investing advice
Not only did your sister not listen to your general investing advice, she put her money into the very funds and FA you warned against. She doesn't want your advice, good as it may be.
- arcticpineapplecorp.
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Re: How to provide unsolicited investing advice
Agree with this 100%.
OP when the student is ready the teacher will appear.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: How to provide unsolicited investing advice
Great perspective.LilyFleur wrote: ↑Thu Mar 30, 2023 1:52 pm Sadly, not everyone has been given the gifts required to be a Boglehead (ability to think logically, invest on a disciplined schedule, take enough risk to increase their portfolio, but not so much that they freak out and sell everything in a dip).
So for those folks, paying a financial advisor is a good idea if it keeps them saving. The cost of not saving would be much worse. The bright side is your sibling is not withdrawing and buying sports cars.
One thing I've noticed on this forum: an inability to recognize that people are different than us. I know your motives are pure, that you want your sibling to manage the money in a low-cost way. But your sibling is not you.
This sibling may have their hands full raising two children alone. I've done that, and I pretty much left my portfolio alone during those demanding years. I remember coming home from work and standing up to pay my bills on my computer at the breakfast bar after dinner, because if I sat down I would fall asleep.
Kudos to your sibling for getting employment and doing better. Who knows, maybe your sibling will be a Boglehead when they have more time and an empty nest.
Additional context is, that yes, my sibling does hold the world on their shoulders and has little time to research investing as a hobby like I do. Drives an hour to work each way and raises a high schooler and middle schooler entirely on their own. Bore the majority of the burden when my Mom was ill too, and is now bearing most of the responsibility of settling her estate.
I think it makes a lot of sense for them to use an FA for now at least, but was hoping they might at least press the FA on getting into lower fee funds, assuming the FA wouldn’t talk them out of it. Maybe some day …
Re: How to provide unsolicited investing advice
One could consider Vanguard's Personal Advisory Service (PAS). It's 0.30%/year and the investments will be in low cost funds.I think it makes a lot of sense for them to use an FA for now at least, but was hoping they might at least press the FA on getting into lower fee funds, assuming the FA wouldn’t talk them out of it. Maybe some day …
Re: How to provide unsolicited investing advice
Hmmm, sounds like she is doing a lot of extra work that the rest of the family is benefitting from, in the care of Mom and in settling the estate. Surely the skills she uses for settling the estate could be used to manage her own investing, if she had the time. I hope her siblings are generous to her when the estate is settled. By not having to use a corporate trustee, her unpaid work is saving all of the siblings a great deal of money.Brazer wrote: ↑Thu Mar 30, 2023 6:40 pmGreat perspective.LilyFleur wrote: ↑Thu Mar 30, 2023 1:52 pm Sadly, not everyone has been given the gifts required to be a Boglehead (ability to think logically, invest on a disciplined schedule, take enough risk to increase their portfolio, but not so much that they freak out and sell everything in a dip).
So for those folks, paying a financial advisor is a good idea if it keeps them saving. The cost of not saving would be much worse. The bright side is your sibling is not withdrawing and buying sports cars.
One thing I've noticed on this forum: an inability to recognize that people are different than us. I know your motives are pure, that you want your sibling to manage the money in a low-cost way. But your sibling is not you.
This sibling may have their hands full raising two children alone. I've done that, and I pretty much left my portfolio alone during those demanding years. I remember coming home from work and standing up to pay my bills on my computer at the breakfast bar after dinner, because if I sat down I would fall asleep.
Kudos to your sibling for getting employment and doing better. Who knows, maybe your sibling will be a Boglehead when they have more time and an empty nest.
Additional context is, that yes, my sibling does hold the world on their shoulders and has little time to research investing as a hobby like I do. Drives an hour to work each way and raises a high schooler and middle schooler entirely on their own. Bore the majority of the burden when my Mom was ill too, and is now bearing most of the responsibility of settling her estate.
I think it makes a lot of sense for them to use an FA for now at least, but was hoping they might at least press the FA on getting into lower fee funds, assuming the FA wouldn’t talk them out of it. Maybe some day …
Re: How to provide unsolicited investing advice
Not your monkeys, not your circus. I'd focus on being a good sibling which means staying out of their personal business until one or both asks you not to. Even then, you should think long and hard before getting involved in someone else's finances.
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Re: How to provide unsolicited investing advice
I provided solicited advice to my brother and sister when we received an inheritance.
Sadly, a financial advisor put them in loaded, high expense funds sold by my sister's bank. First downturn they sold near the bottom, all gone now.
They had such a good opportunity to retire more comfortably and basically threw it away.
The end. A tale much repeated I'm sure.
Broken Man 1999
Sadly, a financial advisor put them in loaded, high expense funds sold by my sister's bank. First downturn they sold near the bottom, all gone now.
They had such a good opportunity to retire more comfortably and basically threw it away.
The end. A tale much repeated I'm sure.
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
- arcticpineapplecorp.
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Re: How to provide unsolicited investing advice
moral of the story: even when people ask for your advice, there's no guarantee they'll actually follow it.Broken Man 1999 wrote: ↑Fri Mar 31, 2023 12:26 pm I provided solicited advice to my brother and sister when we received an inheritance.
Sadly, a financial advisor put them in loaded, high expense funds sold by my sister's bank. First downturn they sold near the bottom, all gone now.
They had such a good opportunity to retire more comfortably and basically threw it away.
The end. A tale much repeated I'm sure.
Broken Man 1999
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: How to provide unsolicited investing advice
Welcome to the Forum!Brazer wrote: ↑Thu Mar 30, 2023 1:27 pm I suspect they just feel more comfortable doing what an FA tells them to do….
I don’t want to trample sibling’s pride (I am almost two decades younger btw)…..
One thing I am telling myself, is that they could do much worse, such as by withdrawing the funds and making a visit to Foreign Cars Italia.
You wrote three very insightful sentences above, giving three excellent reasons why your best course of action now is just to drop it.
You’ve done what you can to give good advice, and you can (and should) feel good about that.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: How to provide unsolicited investing advice
When I distributed a rather large estate I sent a letter to each sibling with some general advice: Move the Merrill Lynch Funds to Vanguard, asset allocation risk tolerance, index funds, taking no more than RMDS from the 403(b), etc. I never mentioned it again. Once sibling blew through the inheritance in less than 10 years, treating it like a lottery winning. The other may or may not have taken my advice but lives in a modest paid-off house and drives a 10-year-old car so I'm sure they're OK.
Nobody knows nothing.
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Re: How to provide unsolicited investing advice
You could on a single sheet of paper with large font write what you are going to do with your inheritance and share it with them. Keep it simple. Don’t use too much jargon. Focus on the expense ratio and the zero advisor fees with your plan. Hand it to them and say “FYI…here is what I am planning to do.”
- dratkinson
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Re: How to provide unsolicited investing advice
Been there, done that.
My sister is not knowledgeable about investing, her husband did that and had them at Vanguard. Her son became a stockbroker, and after her husband died, convinced her to move their Vanguard investments into his keeping with his brokerage. The rest was predictable---fees, loads,.... Nothing I could say could move her since she didn't want to learn this stuff for herself. My solution: as long as she can live out her days in relative comfort, with her kids/grand-kids, investments, teacher's pension, and SS, then things should be okay. I believe they will be.
If your sibling asks, you could tell them what you've done with your inheritance. And offer this forum as a knowledgeable group to help them construct a better solution for themselves. And you could then offer to help them implement their better solution. All of this presupposes they want a better outcome and are willing to take a more active role in their investing success.
But, if your sibling doesn't want to learn this stuff for themselves, then unless you will be doing all of the work to manage their investments, then whatever you say/do will only cause a conflict that you will not resolve.
Welcome.
My sister is not knowledgeable about investing, her husband did that and had them at Vanguard. Her son became a stockbroker, and after her husband died, convinced her to move their Vanguard investments into his keeping with his brokerage. The rest was predictable---fees, loads,.... Nothing I could say could move her since she didn't want to learn this stuff for herself. My solution: as long as she can live out her days in relative comfort, with her kids/grand-kids, investments, teacher's pension, and SS, then things should be okay. I believe they will be.
If your sibling asks, you could tell them what you've done with your inheritance. And offer this forum as a knowledgeable group to help them construct a better solution for themselves. And you could then offer to help them implement their better solution. All of this presupposes they want a better outcome and are willing to take a more active role in their investing success.
But, if your sibling doesn't want to learn this stuff for themselves, then unless you will be doing all of the work to manage their investments, then whatever you say/do will only cause a conflict that you will not resolve.
Welcome.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
Re: How to provide unsolicited investing advice
I have to say - if you love your sibling you want what’s best for him. I would make a presentation as to how investing works, show the difference between investing vehicles, equities and bonds and cash equivalents. Show the graphs that cash equivalents have the smallest volatility, in smallest return, bonds, more volatility, and more return in equities, the greatest volatility, and the greatest return over long periods of time. Then show the graft out different expense ratios work and show how you put that together to put your portfolio together. Tell him you don’t want to tell him what to do but you do want to give him at least some education on investing so that he can make the best decisions. And then if he asks you exactly where to put it, tell him.
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Re: How to provide unsolicited investing advice
If you exchange holiday or birthday gifts, consider gifting your sibling a book such as “The Bogleheads Guide to Investing” or “How to Make Your Money Last” by Jane Bryant Quinn.
Re: How to provide unsolicited investing advice
Unsolicited advice is rarely well received. "Here's a diet book you might like" is a good example.Brazer wrote: ↑Thu Mar 30, 2023 1:27 pm My Mom died of lung cancer (smoker) several months ago (Dad died 10 years ago from sudden heart attack, also a smoker). So it goes.
As a result, myself and my two siblings have inherited assets from Mom’s financial accounts. The taxable brokerage account at a particular bank contained two mutual funds that we inherited outright, BCICX and JNBCX, which are both essentially actively managed income producing funds with ER’s of 1.57% and 1.25% respectively. My Mom used a financial advisor at this bank, due to not knowing enough to manage her own finances. So alas, I estimate that at least $30k+ was sacrificed to Blackrock and JP Morgan through the ERs over the years.
One of my siblings desired to invest the majority of the financial assets. However, they do not have hardly any investing knowledge. In a conversation a month or two ago, I warned this sibling about the high fees of those funds, and advocated strongly for putting the money into different lower fee funds. I said that Mom paid $30k+ in fees, when she should have paid only $300+, just to drive the point home. However, I didn’t go as far as to recommend what exactly they put the money into. At the time, the sibling seemed concerned about the fees and I thought they would take some action.
Since this conversation, I talked to the sibling again, and they disclosed their plan for managing the inherited funds. They have started working with the same financial advisor Mom used, and have decided to leave the money in BCICX and JNBCX (the advisor told them those were good low risk funds). Oof.
Additionally, there was a Traditional IRA component of our inheritance, which the sibling is taking the Inherited IRA route with and pacing distributions each year to ensure the funds are withdrawn within the required time frame. At the same Financial Advisor’s direction, sibling is putting these funds in some other mutual fund that had a fancy name I can’t recall that is more growth oriented, but I have to imagine it is another actively managed fund with an outrageous ER.
Sibling is a single parent with two children. Financially was very rocky for the two decades of their adult life. Finally is at a good place with job income but is way behind on retirement savings. I would love to see the funds redirected to something more akin to a Boglehead methodology, rather than being used to farm income for JP Morgan and Blackrock, for the sake of sibling and sibling’s children. Even just a no brainer retirement date fund or fixed 60/40 fund would be (IMO) a massive improvement.
However, I’m unsure on how to approach this any further, and if approaching it at all is even appropriate. My initial fee conversation apparently didn’t trigger any call to action on how best to change course. I suspect they just feel more comfortable doing what an FA tells them to do. I don’t want to trample sibling’s pride (I am almost two decades younger btw). One thing I am telling myself, is that they could do much worse, such as by withdrawing the funds and making a visit to Foreign Cars Italia.
Question is, do I try again? If so, how do I approach?
Thanks for any insights.
I don't doubt your good intentions but my one word of advice is "Don't".
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Re: How to provide unsolicited investing advice
Condolences on your loss.
In the past I've given folks who are interested in learning about managing their investments a copy of Mr. Bogle's Little Book of Commonsense Investing with no further instructions other than to consider reading it.
In the past I've given folks who are interested in learning about managing their investments a copy of Mr. Bogle's Little Book of Commonsense Investing with no further instructions other than to consider reading it.
Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* |
FIRE'd July 2023
Re: How to provide unsolicited investing advice
I would modify my "don't" post about giving unsolicited advice to give this advice a thumbs up.AlwaysLearningMore wrote: ↑Fri Mar 31, 2023 9:03 pm Condolences on your loss.
In the past I've given folks who are interested in learning about managing their investments a copy of Mr. Bogle's Little Book of Commonsense Investing with no further instructions other than to consider reading it.
They can read it or not. Hopefully they do.
Re: How to provide unsolicited investing advice
Last year I gave the book - Simple Path to Wealth by jl Collins, to five people who are starting out. I don't know if any are reading it but that was my unsolicited advice to them. That's all the advice they will get from me unless they ask a direct question.
Re: How to provide unsolicited investing advice
If you want to help a single parent in financial trouble, how about a gift, maybe contribution to 529? That’s a good way to avoid advice they don’t want and possibly allow better ego preservation than other gifts. It’s for the kids.
Re: How to provide unsolicited investing advice
Unsolicited advice about investing, relationships, or anything else is generally both unwelcome and almost always ignored. It would imply that I believed the advice was necessary to correct an existing or impending error, i.e. seen as an implied insult.
Even when people ask me for advice in areas in which my expertise is well-known to them, the people asking often ignore it. Some tell me in after-years that they wish they had taken it at the time. C'est la vie.
When people do ask for financial advice, I usually put it in terms of what I do but acknowledging that it may or may not apply to their situations.
When young people at work have asked my advice (a rare occurrence so far), I advise contributing as much as possible to the the 401K whose default is a target fund appropriate to age. If they are still in low tax brackets and have a long compounding time ahead, I suggest the Roth option until reaching at least the >20% bracket for the tax-free withdrawals after long term compounding and for the added flexibility that young people sometimes need. Problem is that those in the low brackets can seldom see themselves able to afford making the contribution, but those who have done so have done well in the past 10-15 years. Opinions on this vary as to whether and when Roth is a good idea.
I have learned over many years that I am not an expert in financial affairs or even very good at it. That's why I'm a BH.
Even when people ask me for advice in areas in which my expertise is well-known to them, the people asking often ignore it. Some tell me in after-years that they wish they had taken it at the time. C'est la vie.
When people do ask for financial advice, I usually put it in terms of what I do but acknowledging that it may or may not apply to their situations.
When young people at work have asked my advice (a rare occurrence so far), I advise contributing as much as possible to the the 401K whose default is a target fund appropriate to age. If they are still in low tax brackets and have a long compounding time ahead, I suggest the Roth option until reaching at least the >20% bracket for the tax-free withdrawals after long term compounding and for the added flexibility that young people sometimes need. Problem is that those in the low brackets can seldom see themselves able to afford making the contribution, but those who have done so have done well in the past 10-15 years. Opinions on this vary as to whether and when Roth is a good idea.
I have learned over many years that I am not an expert in financial affairs or even very good at it. That's why I'm a BH.
Re: How to provide unsolicited investing advice
My brother also solicits advice. But usually it's technical points on how various instruments work, tax, specific fund comparisons. I know he generally pursues a mixed strategy of 1/2 and 1/2 Vanguard funds (don't know which ones) and adviser with control (I don't know the details of arrangement, fees or the investments). Says he can't tell if the adviser money has done better or worse than the Vang funds over an extended period. I just answer the specific questions I'm asked if possible, pointing out where (at times) they are difficult to answer without the whole picture, though at the same time trying to avoid implying I'm seeking to know the whole picture, which I'm not. It's not an overall sad story AFAIK, he seems to be fine and more importantly my circumspect approach hasn't generated any friction.Broken Man 1999 wrote: ↑Fri Mar 31, 2023 12:26 pm I provided solicited advice to my brother and sister when we received an inheritance.
Sadly, a financial advisor put them in loaded, high expense funds sold by my sister's bank. First downturn they sold near the bottom, all gone now.
They had such a good opportunity to retire more comfortably and basically threw it away.
The end. A tale much repeated I'm sure.
Broken Man 1999
As an earlier post suggested, the key drawback to offering advice is if the randomness of the market 'proves' it wrong in hindsight over some period. That's absolutely possible advising people to follow a BH methodology, even if *the odds are* it will be best for them. Especially once you consider potential after-the-fact goalpost movement (eg. the person themself was leery of some non-BH investment an advisor suggested that ended up doing well, they may never have bought it regardless of your advice, but you advised against it so it's your fault).
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Re: How to provide unsolicited investing advice
or,sls239 wrote: ↑Thu Mar 30, 2023 1:54 pm I don’t give it as advice. I might, if the topic comes up, say something like “I just use a target date fund, but you know me, I like things simple and automatic” or “I have mine in cheap Vanguard index funds, but you know me, I’m a tightwad”
It isn’t advice - but it does offer terms that if googled, should point in the right direction.
Also, it makes it not about what a person “should” do, but more about choice or preference - which is more appealing.
If we sometimes had extended family get-togethers, I might nonchalantly say something like I’m thinking of making a visit to the 'Foreign Cars Italia' for a visit. I could make a cash purchase with all that money I’ve been saving by investing my inheritance in low fee-index funds.
Sorry, just me being glib.
Time is your friend; impulse is your enemy - John Bogle |
Learn every day, but especially from the experiences of others, it's cheaper! - John Bogle