Want to manage my parents' retirement, signed up for CFP course

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invest4
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Joined: Wed Apr 24, 2019 2:19 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by invest4 »

If you want to help your parents:

* Post their entire portfolio for review including any expenses paid to an advisor


* Have an outside professional or Vanguard PAS give it a look and see what they have to say


* Consider the various suggestions and whether any changes should be made including change of advisor


* Make agreed changes and keep moving forward


* Carefully consider the idea of getting yourself involved unless you are both capable and fully understand both the advantages and perils of managing your parents money. I suspect no one wants a “learning by doing” situation.
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celia
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by celia »

An advisor who only charges $8K for a multi-million portfolio is probably a fiduciary. That is a person who is trying to do the best for the client’s situation instead of for themself (eg. “earning” extra commissions by churning with frequent buy and sell transactions).

Why not ask your mom if you can go with her the next time she has a conference with her advisor. Then ask what kinds of services he is doing for her. Does he plan for taxes? For her goals? For her retirement?

For example, if your parents are retired, is the advisor considering how SS or pensions fit in with their other income? Does he check to see if your parents need to do Roth conversions? (This assumes the advisor manages or at least sees all their assets.)

If they are not yet retired, is he helping them plan for it by taking advantage of employer plans and IRAs? Does he review the different kinds of insurance they have/need? Does he inquire whether they have an estate plan or if they plan to move to a different state?


I’m not sure all these topics would be covered in the CFP course, but until you experience these things yourself, you may not realize there is more to planning than just picking assets to own.

And if you’ve already paid for the course and can’t get your money back, I think it would still be useful to know the topics it presents.
ClassII
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by ClassII »

A couple years (months? My love affair with the Bogglehead methodology really hit me over the head) I would have vehemently argued for a self-managed 2/3-fund portfolio and save that $8k a year. However lately I've softened way up to say if it makes your mom happy to have the money handled by some guy, at that AUM $8k is a bargain. They'll probably do just fine with the money if not be the absolute peak compared to teh market. Keep in mind your parents are of advanced age so there's something to break saId about paiying for things to be handled for them. As long as the advice they're paying for is reasonably sound, I say let it ride. If you some day get a hold of those assets and add it to your Boglehead-approved portfolio for self management that's just fine. But for your parents I think as long as it's all own the level it's ok to let some money go down the drain just so to keep everyone happy. Including yourself
Chardo
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Chardo »

While you're at it, go take the bar exam so you can review her will.
Parkinglotracer
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Parkinglotracer »

A man or woman has got to know their limitations. Study and learn more but realize a cfp certification won’t enable a person to develop the temperament to stay the course in a down market or the many of the other skills needed to manage a portfolio cradle to grave. First Get an objective third party opinion on your mom’s portfolio / advisor’s performance from our forum members, planvision, or vanguard PAS or someone similarly minded. If you see a few diversified low cost index funds in your mom’s portfolio that would be a good sign. Simple quarterly statements that show her asset allocation in stocks and bonds/fixed income would be a plus. Statements that compare her portfolio’s 1/3/5 year performance to a market pre agreed market benchmark would be a big plus. With that you could do some math and get a rough comparison on how a boglehead 3 fund portfolio would have done in that time. Some discussion or implementation of long term tax strategy would be great. Discussion of current and future tax brackets, and yearly estimates of income, written goals all even better.

As has been mentioned the market could crater with no fault of yours; it can affect your relationship with your loved ones.

Good luck and I understand your concern about fees but … don’t get the cart before the horse.
Parkinglotracer
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Parkinglotracer »

Chardo wrote: Sun Apr 02, 2023 4:10 am While you're at it, go take the bar exam so you can review her will.
little harsh on the Beav tonight Wally, lol.
Chardo
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Joined: Fri Feb 18, 2022 12:16 pm

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Chardo »

Parkinglotracer wrote: Sun Apr 02, 2023 5:17 am
Chardo wrote: Sun Apr 02, 2023 4:10 am While you're at it, go take the bar exam so you can review her will.
little harsh on the Beav tonight Wally, lol.
Perhaps. But the point is that the CFP exam is for industry professionals. It is an all day exam, requiring hundreds of hours of study. Complete overkill for an amateur looking to manage mom's money.
Parkinglotracer
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Parkinglotracer »

Chardo wrote: Sun Apr 02, 2023 5:29 am
Parkinglotracer wrote: Sun Apr 02, 2023 5:17 am
Chardo wrote: Sun Apr 02, 2023 4:10 am While you're at it, go take the bar exam so you can review her will.
little harsh on the Beav tonight Wally, lol.
Perhaps. But the point is that the CFP exam is for industry professionals. It is an all day exam, requiring hundreds of hours of study. Complete overkill for an amateur looking to manage mom's money.
Glad he is interested in learning but I get your point.
Freetime76
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Joined: Wed Jun 26, 2019 8:26 pm

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Freetime76 »

Macaroni2629 wrote: Sat Apr 01, 2023 2:02 pm
Jack FFR1846 wrote: Sat Apr 01, 2023 1:31 pm $8k on $2M is wicked cheap. What I'd also look at is what she's in and what is the cost of those things? I mean, if they put her into 1.5% ER funds, then while the management fee is cheap, the ER cost won't be.

My mom has a bunch of investments that I would not pick myself and she has an advisor who she likes a lot and I've met with. I could potentially save her a lot of money but she's happy with how things are going and it's not my business to barge my way in and try to force her to change. Sometimes cost isn't everything.
You're right; I'll stop meddling. I want to maintain a good relationship with my mom. Thank you for your feedback.
Hello!

To be fair, I don’t know if I’d call enthusiasm, meddling Macaroni. However, I am relieved to hear you’re going to watch and learn for a while. Even vs. reading and excellent classes, nothing beats the harsh teacher of experience. I’d rather you earn those stripes with your own assets, not mom’s. There are too many emotions involved, and there is no *need* at this time.

A few thoughts for you and **your mom** (so sorry for her loss):
1. The advisor is there to ADVISE her. As with my own mom, she would benefit from getting an idea what that money is invested in and why. Yes, it will take time, and that is okay. It’s possible that at this stage it’s is invested exactly the same as when she inherited it. She decides. Do NOT fully hand over the reins, even if it’s confusing and uncomfortable. I’m a lady saying this… :wink: .

2. Also, it’s okay to let money sit for a while to decide what to do. What will the funds be used for? Are we holding them for retirement? Will she want to draw income off of it? Paying off loans? Doing some enjoyable trips?
Early after inheriting, she may not have any capital gains to worry about (usually you inherit the investment along with the cost basis from the date of death). She may want to use some of that money for things other than “invest it all”. Maybe she’s already figured all that out? Anyway, sure, keep it in separate accounts as an inheritance, but plan the financial life of her and her spouse holistically.

3. If they haven’t already done so, your mom and dad might benefit from a sit down with a tax advisor to look at the whole of their situation. There are certain income levels where capital gains become non taxable, sometimes you can spread your income sources around to avoid too much taxes - the better time to take a look at this stuff is earlier rather than later. We all like to pay less taxes…

4. A short story: my mom used an advisor for many years. He collected a fee.He advised her “Do not sell!” at the last financial “crash” in 2008. She did not. My dad sold it all and lost oodles because he panicked and missed the upside/recovery. (They we’re all fine, but one got wise advise, one did not.) He made suggestions about investing in this or that or affected aides, she decided. All was well until she was Much Older and handed the reins over to him - she agreed with many things he said and ended up in a mess (not awful like Enron or anything, just very very not optimal). It was going off the rails. After years of chatting about investing, knowing the advisor, eventually she was convinced/decided for herself to transition to self-manage at a different brokerage. She still decides, but she’s trending more towards index funds, less stocks, more bonds/CDs etc. just a story - maybe we don’t need to rip off the bandaid? Maybe we do - have to investigate…

5. For you, Macaroni, :D , I would ask questions. If she’s open to it, help her compose a list to ask when she meets with the advisor. Do it for leaning purposes and to help her if you see something egregiously wrong. If she’ll let you see a recent statement, I’d look for high level obvious issues or risks:
A. What % single stocks vs mutual funds vs bonds vs cash? Lots in single stocks is a risk. High Expenses? 52 different stocks/funds? (Too many, too complicated).
B. What market sectors? All tech? All small companies? All old steady-Eddie’s? Are the stocks overlapping with the mutual fund holdings?
C. Does anything stand out as awful? If so, get rid of those (first) and continue to assess.

By the way, please don’t follow what Cramer says to do - that’s a red flag to me for dad (my dad loved watching him, had all the books, had his Ameritrade account ready to invest in who-knows-what but he was sure to lose his money on those trades. Thankfully he never did much (just thought and “studied”). Please, no. :wink:
Please spell out new acronyms. Thank you.
Target2019
Posts: 904
Joined: Sat Mar 03, 2007 4:30 pm

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Target2019 »

Macaroni2629 wrote: Sat Apr 01, 2023 7:43 am
Target2019 wrote: Sat Apr 01, 2023 7:35 am
Macaroni2629 wrote: Sat Apr 01, 2023 6:53 am
AlwaysLearningMore wrote: Fri Mar 31, 2023 9:10 pm There's a learning curve to every profession. Are you sure you want to take on this responsibility? Steering the ship through a storm is usually handled by the most experienced seaman on the ship.
Of course I'm not arrogant enough to think that I can hit the ground running with confidence, but I guess I'm surprised by the general responses here since Bogleheads are known for encouragement of self management.

How do I get experience without at least trying to learn? I feel kind of discouraged by the responses here of not even bothering to try to learn anything at all.
Your experience will be coming from your management of mother's portfolio. I oversaw my in-laws portfolio, but I was not the manager. Fine line there for you to consider.

The problem is that you do not have the credentials, but maybe some day you can attain that.

I'm an experienced DIY'er, but that is about it. I know when things are too complicated, too risky, etc. I can even demonstrate how a simpler portfolio can perform better. But being responsible for the uncertain outcome year-to-year is another matter. So my value-adding to in-laws was to provide clearer interpretation of all costs and un-mitigated risk. We made small decisions together, such as not adding to the managed portion of their investments. We grew the taxable brokerage with specific goals in mind.

$8K cost (double that for fund expenses) is not a lot for multi-million-dollar portfolio. I suggest you simply watch the statements, and add some value to process. For example, maybe you'll find that there is heavy use of taxable mutual funds, costing them more in taxes each year. Of course by now you have to worry about forcing changes to the allocation, as selling all the bond funds may result in a huge tax bill next year. That reminds me, are you experienced with tax preparation and implications of selling decisions?

I hope you do get involved, because elderly parents do need an advocate or two, as they are vulnerable to scams. I think it's just your level of involvement that is being discussed.
I totally want to be involved, but it seems like for now, I'm just going to have to follow my mom's CFP and learn by watching what's going on and continue my own personal education in the matters.

Do you have a recommended list of steps that I can follow to start building that foundation of confidence? I feel like the world of personal finance is vast and endless, which is why I found myself signing up for the CFP course. I wanted a course with a beginning, middle, and end. I know that the end doesn't mean the real end, but I thought it would serve as a foundation for my future learning.

Thank you for your kind and helpful feedback thusfar.
Where your confidence will come from is your unique path. What worked for me arose from many circumstances and my interests. Along the way different mentors really helped me to grow from innocent youth and work with others.

For financial confidence, I read thousands of posts and threads here, at morningstar and at early-retirement.org. I read a dozen books and developed an approach and a plan for us. It worked for us.

Travelling outside of your box may give you confidence. For others, staying within the box and following specific steps is confidence-building.

You may get something from the Morningstar Investing Classroom. https://www.morningstar.com/start-investing/classroom
Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

cchrissyy wrote: Sat Apr 01, 2023 2:30 pm i just want to say welcome to the forum, and it's great you enjoy learning and want to help and also it is very wise that you decided not to get more involved.

frankly, i'm a little offended on behalf of your mom that family members are talking about her like she isn't doing well enough.
Yeah, I'd say in some ways, if my mom didn't feel comfortable investing money herself, it is wise for her to look to someone else. I just think there's always an inherent conflict of interest in the financial services industry. Someone at least needs to monitor what's going on...
Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

invest4 wrote: Sun Apr 02, 2023 12:38 am If you want to help your parents:

* Post their entire portfolio for review including any expenses paid to an advisor


* Have an outside professional or Vanguard PAS give it a look and see what they have to say


* Consider the various suggestions and whether any changes should be made including change of advisor


* Make agreed changes and keep moving forward


* Carefully consider the idea of getting yourself involved unless you are both capable and fully understand both the advantages and perils of managing your parents money. I suspect no one wants a “learning by doing” situation.
I'm thinking about all of these things, thank you.
Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

celia wrote: Sun Apr 02, 2023 2:22 am An advisor who only charges $8K for a multi-million portfolio is probably a fiduciary. That is a person who is trying to do the best for the client’s situation instead of for themself (eg. “earning” extra commissions by churning with frequent buy and sell transactions).

Why not ask your mom if you can go with her the next time she has a conference with her advisor. Then ask what kinds of services he is doing for her. Does he plan for taxes? For her goals? For her retirement?

For example, if your parents are retired, is the advisor considering how SS or pensions fit in with their other income? Does he check to see if your parents need to do Roth conversions? (This assumes the advisor manages or at least sees all their assets.)

If they are not yet retired, is he helping them plan for it by taking advantage of employer plans and IRAs? Does he review the different kinds of insurance they have/need? Does he inquire whether they have an estate plan or if they plan to move to a different state?


I’m not sure all these topics would be covered in the CFP course, but until you experience these things yourself, you may not realize there is more to planning than just picking assets to own.

And if you’ve already paid for the course and can’t get your money back, I think it would still be useful to know the topics it presents.
I was mistaken in my assumptions about fees. It turns out some of my mom's assets are under advisory and being charged 1.49%, and other assets are a brokerage account for which he makes commissions. It's a mix, which is kind of confusing. The $8k completely is from the assets under advisory. I started a thread about that here https://bogleheads.org/forum/viewtopic. ... 5#p7199785

Thank you for your response.
Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

Freetime76 wrote: Sun Apr 02, 2023 6:09 am
Macaroni2629 wrote: Sat Apr 01, 2023 2:02 pm
Jack FFR1846 wrote: Sat Apr 01, 2023 1:31 pm $8k on $2M is wicked cheap. What I'd also look at is what she's in and what is the cost of those things? I mean, if they put her into 1.5% ER funds, then while the management fee is cheap, the ER cost won't be.

My mom has a bunch of investments that I would not pick myself and she has an advisor who she likes a lot and I've met with. I could potentially save her a lot of money but she's happy with how things are going and it's not my business to barge my way in and try to force her to change. Sometimes cost isn't everything.
You're right; I'll stop meddling. I want to maintain a good relationship with my mom. Thank you for your feedback.
Hello!

To be fair, I don’t know if I’d call enthusiasm, meddling Macaroni. However, I am relieved to hear you’re going to watch and learn for a while. Even vs. reading and excellent classes, nothing beats the harsh teacher of experience. I’d rather you earn those stripes with your own assets, not mom’s. There are too many emotions involved, and there is no *need* at this time.

A few thoughts for you and **your mom** (so sorry for her loss):
1. The advisor is there to ADVISE her. As with my own mom, she would benefit from getting an idea what that money is invested in and why. Yes, it will take time, and that is okay. It’s possible that at this stage it’s is invested exactly the same as when she inherited it. She decides. Do NOT fully hand over the reins, even if it’s confusing and uncomfortable. I’m a lady saying this… :wink: .

2. Also, it’s okay to let money sit for a while to decide what to do. What will the funds be used for? Are we holding them for retirement? Will she want to draw income off of it? Paying off loans? Doing some enjoyable trips?
Early after inheriting, she may not have any capital gains to worry about (usually you inherit the investment along with the cost basis from the date of death). She may want to use some of that money for things other than “invest it all”. Maybe she’s already figured all that out? Anyway, sure, keep it in separate accounts as an inheritance, but plan the financial life of her and her spouse holistically.

3. If they haven’t already done so, your mom and dad might benefit from a sit down with a tax advisor to look at the whole of their situation. There are certain income levels where capital gains become non taxable, sometimes you can spread your income sources around to avoid too much taxes - the better time to take a look at this stuff is earlier rather than later. We all like to pay less taxes…

4. A short story: my mom used an advisor for many years. He collected a fee.He advised her “Do not sell!” at the last financial “crash” in 2008. She did not. My dad sold it all and lost oodles because he panicked and missed the upside/recovery. (They we’re all fine, but one got wise advise, one did not.) He made suggestions about investing in this or that or affected aides, she decided. All was well until she was Much Older and handed the reins over to him - she agreed with many things he said and ended up in a mess (not awful like Enron or anything, just very very not optimal). It was going off the rails. After years of chatting about investing, knowing the advisor, eventually she was convinced/decided for herself to transition to self-manage at a different brokerage. She still decides, but she’s trending more towards index funds, less stocks, more bonds/CDs etc. just a story - maybe we don’t need to rip off the bandaid? Maybe we do - have to investigate…

5. For you, Macaroni, :D , I would ask questions. If she’s open to it, help her compose a list to ask when she meets with the advisor. Do it for leaning purposes and to help her if you see something egregiously wrong. If she’ll let you see a recent statement, I’d look for high level obvious issues or risks:
A. What % single stocks vs mutual funds vs bonds vs cash? Lots in single stocks is a risk. High Expenses? 52 different stocks/funds? (Too many, too complicated).
B. What market sectors? All tech? All small companies? All old steady-Eddie’s? Are the stocks overlapping with the mutual fund holdings?
C. Does anything stand out as awful? If so, get rid of those (first) and continue to assess.

By the way, please don’t follow what Cramer says to do - that’s a red flag to me for dad (my dad loved watching him, had all the books, had his Ameritrade account ready to invest in who-knows-what but he was sure to lose his money on those trades. Thankfully he never did much (just thought and “studied”). Please, no. :wink:
Thank you for such a long, thoughtful response. I can't say enough how thoughtful this community is, and I've only been here about 2 days!

In regards to the tax advisor part--does that mean fine a tax lawyer? Or find an accountant who is focused on lowering tax burden? Or both?

Yeah I'm holding off on doing anything for a long time; I'm just going to learn for now and just gather information about my mom's investments.
Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

Target2019 wrote: Sun Apr 02, 2023 7:57 am
Macaroni2629 wrote: Sat Apr 01, 2023 7:43 am
Target2019 wrote: Sat Apr 01, 2023 7:35 am
Macaroni2629 wrote: Sat Apr 01, 2023 6:53 am
AlwaysLearningMore wrote: Fri Mar 31, 2023 9:10 pm There's a learning curve to every profession. Are you sure you want to take on this responsibility? Steering the ship through a storm is usually handled by the most experienced seaman on the ship.
Of course I'm not arrogant enough to think that I can hit the ground running with confidence, but I guess I'm surprised by the general responses here since Bogleheads are known for encouragement of self management.

How do I get experience without at least trying to learn? I feel kind of discouraged by the responses here of not even bothering to try to learn anything at all.
Your experience will be coming from your management of mother's portfolio. I oversaw my in-laws portfolio, but I was not the manager. Fine line there for you to consider.

The problem is that you do not have the credentials, but maybe some day you can attain that.

I'm an experienced DIY'er, but that is about it. I know when things are too complicated, too risky, etc. I can even demonstrate how a simpler portfolio can perform better. But being responsible for the uncertain outcome year-to-year is another matter. So my value-adding to in-laws was to provide clearer interpretation of all costs and un-mitigated risk. We made small decisions together, such as not adding to the managed portion of their investments. We grew the taxable brokerage with specific goals in mind.

$8K cost (double that for fund expenses) is not a lot for multi-million-dollar portfolio. I suggest you simply watch the statements, and add some value to process. For example, maybe you'll find that there is heavy use of taxable mutual funds, costing them more in taxes each year. Of course by now you have to worry about forcing changes to the allocation, as selling all the bond funds may result in a huge tax bill next year. That reminds me, are you experienced with tax preparation and implications of selling decisions?

I hope you do get involved, because elderly parents do need an advocate or two, as they are vulnerable to scams. I think it's just your level of involvement that is being discussed.
I totally want to be involved, but it seems like for now, I'm just going to have to follow my mom's CFP and learn by watching what's going on and continue my own personal education in the matters.

Do you have a recommended list of steps that I can follow to start building that foundation of confidence? I feel like the world of personal finance is vast and endless, which is why I found myself signing up for the CFP course. I wanted a course with a beginning, middle, and end. I know that the end doesn't mean the real end, but I thought it would serve as a foundation for my future learning.

Thank you for your kind and helpful feedback thusfar.
Where your confidence will come from is your unique path. What worked for me arose from many circumstances and my interests. Along the way different mentors really helped me to grow from innocent youth and work with others.

For financial confidence, I read thousands of posts and threads here, at morningstar and at early-retirement.org. I read a dozen books and developed an approach and a plan for us. It worked for us.

Travelling outside of your box may give you confidence. For others, staying within the box and following specific steps is confidence-building.

You may get something from the Morningstar Investing Classroom. https://www.morningstar.com/start-investing/classroom
Thanks for the Morningstar suggestion, will have to consider this.
pennywise
Posts: 970
Joined: Sat May 31, 2014 6:22 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by pennywise »

Without restating much of the wisdom that has been provided, a quick calculation shows that if indeed the fee is $8000 annually on a $2 million portfolio, that is within shouting range of what using Vanguard PAS would cost: .004% in current situation compared with .003 for PAS.

More importantly, Vanguard will use index-based funds which is likely not happening with your mom’s current portfolio. Also included under PAS are all the advisory services that have been mentioned. If you choose that route they will help with shifting assets so you don’t have to do that on your own either.

That will give you an excellent opportunity to watch a full service company deploy cost effective passive investing instruments while handling the various financial related tasks that have been raised.

Perhaps more importantly it will take you out of the equation as the person who may be responsible for losing any part of your mothers inheritance, which in my opinion is probably the most important aspect of this whole discussion.

You can be included on the account at various levels so you have access to see what is set up and how it may be moved or shifted going forward, which will help you learn more about personal investing.

There is no pressure to keep paying advisory fees and if you and your mom so choose, you can decide to drop the advisory service and self manage the portfolio at any point.

Meanwhile make Bogleheads a daily online stop, and soak up this virtual community of knowledgeable people who gather to support and teach each other

Last but not least welcome to the online best personal financial planning class you could ever find!
passive101
Posts: 630
Joined: Tue May 05, 2020 2:47 pm

Re: Want to manage my parents' retirement, signed up for CFP course

Post by passive101 »

Macaroni2629 wrote: Sun Apr 02, 2023 8:07 am
celia wrote: Sun Apr 02, 2023 2:22 am An advisor who only charges $8K for a multi-million portfolio is probably a fiduciary. That is a person who is trying to do the best for the client’s situation instead of for themself (eg. “earning” extra commissions by churning with frequent buy and sell transactions).

Why not ask your mom if you can go with her the next time she has a conference with her advisor. Then ask what kinds of services he is doing for her. Does he plan for taxes? For her goals? For her retirement?

For example, if your parents are retired, is the advisor considering how SS or pensions fit in with their other income? Does he check to see if your parents need to do Roth conversions? (This assumes the advisor manages or at least sees all their assets.)

If they are not yet retired, is he helping them plan for it by taking advantage of employer plans and IRAs? Does he review the different kinds of insurance they have/need? Does he inquire whether they have an estate plan or if they plan to move to a different state?


I’m not sure all these topics would be covered in the CFP course, but until you experience these things yourself, you may not realize there is more to planning than just picking assets to own.

And if you’ve already paid for the course and can’t get your money back, I think it would still be useful to know the topics it presents.
I was mistaken in my assumptions about fees. It turns out some of my mom's assets are under advisory and being charged 1.49%, and other assets are a brokerage account for which he makes commissions. It's a mix, which is kind of confusing. The $8k completely is from the assets under advisory. I started a thread about that here https://bogleheads.org/forum/viewtopic. ... 5#p7199785

Thank you for your response.
An upfront front load commission is usually cheaper then AUM
Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

passive101 wrote: Sun Apr 02, 2023 8:42 am
Macaroni2629 wrote: Sun Apr 02, 2023 8:07 am
celia wrote: Sun Apr 02, 2023 2:22 am An advisor who only charges $8K for a multi-million portfolio is probably a fiduciary. That is a person who is trying to do the best for the client’s situation instead of for themself (eg. “earning” extra commissions by churning with frequent buy and sell transactions).

Why not ask your mom if you can go with her the next time she has a conference with her advisor. Then ask what kinds of services he is doing for her. Does he plan for taxes? For her goals? For her retirement?

For example, if your parents are retired, is the advisor considering how SS or pensions fit in with their other income? Does he check to see if your parents need to do Roth conversions? (This assumes the advisor manages or at least sees all their assets.)

If they are not yet retired, is he helping them plan for it by taking advantage of employer plans and IRAs? Does he review the different kinds of insurance they have/need? Does he inquire whether they have an estate plan or if they plan to move to a different state?


I’m not sure all these topics would be covered in the CFP course, but until you experience these things yourself, you may not realize there is more to planning than just picking assets to own.

And if you’ve already paid for the course and can’t get your money back, I think it would still be useful to know the topics it presents.
I was mistaken in my assumptions about fees. It turns out some of my mom's assets are under advisory and being charged 1.49%, and other assets are a brokerage account for which he makes commissions. It's a mix, which is kind of confusing. The $8k completely is from the assets under advisory. I started a thread about that here https://bogleheads.org/forum/viewtopic. ... 5#p7199785

Thank you for your response.
An upfront front load commission is usually cheaper then AUM
That's what I was thinking too in this scenario at least.
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Macaroni2314
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

pennywise wrote: Sun Apr 02, 2023 8:37 am Without restating much of the wisdom that has been provided, a quick calculation shows that if indeed the fee is $8000 annually on a $2 million portfolio, that is within shouting range of what using Vanguard PAS would cost: .004% in current situation compared with .003 for PAS.

More importantly, Vanguard will use index-based funds which is likely not happening with your mom’s current portfolio. Also included under PAS are all the advisory services that have been mentioned. If you choose that route they will help with shifting assets so you don’t have to do that on your own either.

That will give you an excellent opportunity to watch a full service company deploy cost effective passive investing instruments while handling the various financial related tasks that have been raised.

Perhaps more importantly it will take you out of the equation as the person who may be responsible for losing any part of your mothers inheritance, which in my opinion is probably the most important aspect of this whole discussion.

You can be included on the account at various levels so you have access to see what is set up and how it may be moved or shifted going forward, which will help you learn more about personal investing.

There is no pressure to keep paying advisory fees and if you and your mom so choose, you can decide to drop the advisory service and self manage the portfolio at any point.

Meanwhile make Bogleheads a daily online stop, and soak up this virtual community of knowledgeable people who gather to support and teach each other

Last but not least welcome to the online best personal financial planning class you could ever find!
I discovered through asking my mom's advisor yesterday (I met him a few days ago with my mom and we had a group meeting for a few hours) that the $8k fees is from some of the accounts, not all of the accounts. Some of the accounts are under fiduciary watch by him (1.49%), and the other accounts are brokerage accounts for which he makes sales commissions should my mom purchase more securities

That thread is discovered/discussed here --> https://bogleheads.org/forum/viewtopic.php?t=401553 (No pressure to look but thank you for your feedback thusfar)
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Macaroni2314
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

Parkinglotracer wrote: Sun Apr 02, 2023 5:15 am A man or woman has got to know their limitations. Study and learn more but realize a cfp certification won’t enable a person to develop the temperament to stay the course in a down market or the many of the other skills needed to manage a portfolio cradle to grave. First Get an objective third party opinion on your mom’s portfolio / advisor’s performance from our forum members, planvision, or vanguard PAS or someone similarly minded. If you see a few diversified low cost index funds in your mom’s portfolio that would be a good sign. Simple quarterly statements that show her asset allocation in stocks and bonds/fixed income would be a plus. Statements that compare her portfolio’s 1/3/5 year performance to a market pre agreed market benchmark would be a big plus. With that you could do some math and get a rough comparison on how a boglehead 3 fund portfolio would have done in that time. Some discussion or implementation of long term tax strategy would be great. Discussion of current and future tax brackets, and yearly estimates of income, written goals all even better.

As has been mentioned the market could crater with no fault of yours; it can affect your relationship with your loved ones.

Good luck and I understand your concern about fees but … don’t get the cart before the horse.
I appreciate all the feedback here; it's been helpful and overwhelming at the same time to get so much advice. I did not expect the volume of responses that I've received.

It makes me think a third party like PlanVision would be helpful. My dad is weary of all financial advisors; I feel like I'd have to educate him on the fee only fiduciary ones, and even that would be a hard sell.

I think the best I can do is just watch, learn, and monitor and look for any glaring red flags for now.
helloeveryone
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by helloeveryone »

“I'm surprised I guess to hear the Boglehead community advocate for CFPs since I thought John Bogle was for self management of investments?“

I think this is different. Your dad and you have tried to convince your mom to get rid if the CFP. She has declined your efforts. Yes she is paying $8k a year, and it’s highly unlikely she has a 2 or 3 fund portfolio. But your dad has a $1million, your mom has $2million. You don’t state their age but they are perhaps 60+. Depending on spending and withdrawal rates plus SS - both will be just fine despite her portfolio not being managed a la BH style
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Macaroni2314
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

helloeveryone wrote: Sun Apr 02, 2023 8:52 am “I'm surprised I guess to hear the Boglehead community advocate for CFPs since I thought John Bogle was for self management of investments?“

I think this is different. Your dad and you have tried to convince your mom to get rid if the CFP. She has declined your efforts. Yes she is paying $8k a year, and it’s highly unlikely she has a 2 or 3 fund portfolio. But your dad has a $1million, your mom has $2million. You don’t state their age but they are perhaps 60+. Depending on spending and withdrawal rates plus SS - both will be just fine despite her portfolio not being managed a la BH style
Yes, you are right. Thanks for this advice.
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RickBoglehead
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by RickBoglehead »

helloeveryone wrote: Sun Apr 02, 2023 8:52 am “I'm surprised I guess to hear the Boglehead community advocate for CFPs since I thought John Bogle was for self management of investments?“

I think this is different. Your dad and you have tried to convince your mom to get rid if the CFP. She has declined your efforts. Yes she is paying $8k a year, and it’s highly unlikely she has a 2 or 3 fund portfolio. But your dad has a $1million, your mom has $2million. You don’t state their age but they are perhaps 60+. Depending on spending and withdrawal rates plus SS - both will be just fine despite her portfolio not being managed a la BH style
This is key, she has declined. The big red warning flag was when you said she had money and he had money (your father), and they weren't in the same place, nor managed together. Danger Will Robinson, Danger.

Yes, it will affect your relationship. I managed my mother's money for about 20 years, and then withdrew. I would provide reports explaining things to her, show her when she was going to run out of money. It was like talking to a stump. She had no interest, nor did she care. I was talking to myself. Before I managed her money, she had it at a bank's Private Banking division, one with a fancy dining room and got invited whenever she was in town for lunch. When the advisor left the bank, he told her to give it to me to manage as she was wasting her money. So, she did.

She now has it with my sister's financial advisor. I have no idea what she is invested in, nor do I care. Between the two of them they know less than zero about investing. Not my problem.

Stay far, far away.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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Macaroni2314
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

RickBoglehead wrote: Sun Apr 02, 2023 9:09 am
helloeveryone wrote: Sun Apr 02, 2023 8:52 am “I'm surprised I guess to hear the Boglehead community advocate for CFPs since I thought John Bogle was for self management of investments?“

I think this is different. Your dad and you have tried to convince your mom to get rid if the CFP. She has declined your efforts. Yes she is paying $8k a year, and it’s highly unlikely she has a 2 or 3 fund portfolio. But your dad has a $1million, your mom has $2million. You don’t state their age but they are perhaps 60+. Depending on spending and withdrawal rates plus SS - both will be just fine despite her portfolio not being managed a la BH style
This is key, she has declined. The big red warning flag was when you said she had money and he had money (your father), and they weren't in the same place, nor managed together. Danger Will Robinson, Danger.

Yes, it will affect your relationship. I managed my mother's money for about 20 years, and then withdrew. I would provide reports explaining things to her, show her when she was going to run out of money. It was like talking to a stump. She had no interest, nor did she care. I was talking to myself. Before I managed her money, she had it at a bank's Private Banking division, one with a fancy dining room and got invited whenever she was in town for lunch. When the advisor left the bank, he told her to give it to me to manage as she was wasting her money. So, she did.

She now has it with my sister's financial advisor. I have no idea what she is invested in, nor do I care. Between the two of them they know less than zero about investing. Not my problem.

Stay far, far away.
Yes you're right, thank you for this advice. I appreciate hearing that I'm not the only one who has good intentions for family members.
mhalley
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by mhalley »

I agree that taking the cfp course/exam is way overkill. If you really want to take a course, how about the white coat investors fire your financial advisor course? Here is the overview of what is in it;
https://www.whitecoatinvestor.com/fire- ... ne-course/
I believe it’s $800
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watchnerd
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by watchnerd »

Macaroni2629 wrote: Fri Mar 31, 2023 8:21 pm [See Subject: My mom's portfolio under the guidance of a CFP/CFA for Macaroni2629's related post describing specific investments in his mom's portfolio. --moderator Kendall]

Hi,

I'm a college educated person in my 30's with a background in healthcare and some tech. I've been a hobbyist personal finance learner on and off since grade school. My dad encouraged me to watch Suze Orman and Jim Cramer growing up.

My parents have assets in the single millions.

My mom received a few million from my grandmother, and she left it in the hands of a CFP who has been managing it for over 20 years. I looked at the 2022 end-of-year statement; my mom is paying this person about $8k a year to manage the money, which is outrageous to both my dad and me.

My dad has been trying to persuade my mom to stop paying these management fees for years, but she did not agree.

I proposed that I take a CFP course, and upon passing, that she give me control of the funds... She agreed. So I've signed up for a CFP course and have been studying a few hours a day now! I'm slated to take the exam in November.

1) Am I in over my head here?

2) Should I feel fairly confident that I can make good decisions for my parents after passing the course? Or will there possibly be a discrepancy between what the CFP exam covers and how CFPs behave in real life? (the instructor of my course is discussing here and there points already..)

Thanks!
I've also considered getting CFP for personal reasons.

Where / how are you taking the course?
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
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Macaroni2314
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Macaroni2314 »

https://www.brettdanko.com/ I did a lot of Internet research, and people told me this was the best course.
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Silentnight
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Re: Want to manage my parents' retirement, signed up for CFP course

Post by Silentnight »

It makes me think a third party like PlanVision would be helpful. My dad is weary of all financial advisors; I feel like I'd have to educate him on the fee only fiduciary ones, and even that would be a hard sell.

I think the best I can do is just watch, learn, and monitor and look for any glaring red flags for now.
You're getting a ton of suggestions and good information and I bet your head is swirling.

I had a comment about PlanVision as I am unclear about your thoughts regarding PlanVision.
Background: I retired in 2022 and signed up for PlanVision. I endorse it.
I was unclear as to whether you were thinking of PlanVision for yourself, or for your mom, or both.

I would encourage you to do PlanVision for yourself, first. The onboarding process is a little rough and the videos on how to post your info are not the clearest to understand. Better to learn how to do this step using your own financial situation. Then I would encourage you to meet with Mark via Zoom and review your financial situation with him. PlanVision/eMoney has a wealth of reports. Learn about those reports and see what they tell you about you. Mark also works with Jason Lynch who does tax related things. Meet with Jason about yourself and see what he has to say about you.

This way you can decide whether in your opinion it might be beneficial for your mom. Then approach mom and share with her your PlanVision account so she can see what it is and how it operates. If she is open, then have her enroll in PlanVision. You can pay for it for her. You can do the data entry for her. But it is her PlanVision account. (Your earlier post sounded to me like you were thinking of getting a PV account and entering her financials in the account you took out. If that's not what you said or meant, then apologies for misunderstanding/misreading.) With her permission, Mark will let you join when he meets with her to discuss her account and her financials.

(BTW, you can also request that your meetings with Mark/Jason be recorded. They'll send you the file so you can listen to it again. In my situation, they both covered a lot of ground and I valued being able to relisten to it.)

And if your mom wants to leave things as they are, then let her leave things as they are.
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