Financial advisor, yay or nay

Crimson2v

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My wife and I are thinking of branching out with investing besides our 401k accounts. I was thinking of talking to a financial advisor who happens to be someone I use to work with quite a long time ago. He owns an investment business and reached out to us about working with him and helping us out with our future investments. So what do you all think?
 

jaxbusa

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I think it’s worth it to get an outside perspective. I did a few years ago and ended up getting life insurance and invested some money. Let us know what they say.


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Crimson2v

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I spoke to him and he recommended lowering my roth 457K to what my employer matches and open up a roth IRA through him with the rest I use to match. He also recommended opening up an investment account purchasing S&P ETF through him. I asked about fees and he charges 40 bucks per ETF trade and whenever I get into the long term client status he will charge 1.2% of the total assets in the portfolio to manage it.
 

VENOM1

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I would t recommend an Financial Advisor as their money is typically tied to yours. Try finding a Financial Professional instead. The latter will represent more than one company and typically offer a larger span of products.
 

me32

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I spoke to him and he recommended lowering my roth 457K to what my employer matches and open up a roth IRA through him with the rest I use to match. He also recommended opening up an investment account purchasing S&P ETF through him. I asked about fees and he charges 40 bucks per ETF trade and whenever I get into the long term client status he will charge 1.2% of the total assets in the portfolio to manage it.

So what was your take on it?

1.2% is kinda high cost. What other operating cost are included?
 

jaxbusa

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I spoke to him and he recommended lowering my roth 457K to what my employer matches and open up a roth IRA through him with the rest I use to match. He also recommended opening up an investment account purchasing S&P ETF through him. I asked about fees and he charges 40 bucks per ETF trade and whenever I get into the long term client status he will charge 1.2% of the total assets in the portfolio to manage it.

Now you can look into handling your own Roth. What is your employer match?


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Crimson2v

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So what was your take on it?

1.2% is kinda high cost. What other operating cost are included?
I don’t feel comfortable with it, I feel like we would be losing money due to fees. He is commissioned based and charges 40 bucks per trade on the ETF’s. I feel like we may be better off opening our own vanguard account and doing it ourselves.

Now you can look into handling your own Roth. What is your employer match?
My employee match is only 1.5, I am putting in 6. He said the Roth 401k is different than a regular Roth. He recommended lowering my percentage to 1.5 and opening a Roth IRA with him.
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jbuenavides

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They often have a broader, deeper knowledge of money management than you do so I guess it is a good idea to hire one. You will need to shop around to find an advisor who charges reasonable fees, you can try to hire an online advisor, as they offer good services for a small fee.
 

me32

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I don’t feel comfortable with it, I feel like we would be losing money due to fees. He is commissioned based and charges 40 bucks per trade on the ETF’s. I feel like we may be better off opening our own vanguard account and doing it ourselves.

In this market i feel the same way, there always tends to be other cost associated that arent normally upfront cost that you dont notice till later on which i dont like. Keep looking around.
 

nxhappy

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I spoke to him and he recommended lowering my roth 457K to what my employer matches and open up a roth IRA through him with the rest I use to match. He also recommended opening up an investment account purchasing S&P ETF through him. I asked about fees and he charges 40 bucks per ETF trade and whenever I get into the long term client status he will charge 1.2% of the total assets in the portfolio to manage it.
s and p fund can be done thru vanguard ...same with roth ira ....I think brokers are pointless nowadays
 

Crimson2v

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That’s what I have been thinking, I can just open a vanguard account and purchase the funds myself. I just didn’t understand the explanation of why I needed to change my roth 401k to a Roth IRA.
 

JPD5801

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I’ll preface these comments by saying I am a Financial Advisor.

I don’t feel comfortable with it, I feel like we would be losing money due to fees. He is commissioned based and charges 40 bucks per trade on the ETF’s. I feel like we may be better off opening our own vanguard account and doing it ourselves.

If you open an account with Schwab or Fidelity, ETF trades are generally commission free. I wouldn’t pay a broker $40 per trade to buy an index fund. That’s a waste of your money.


s and p fund can be done thru vanguard ...same with roth ira ....I think brokers are pointless nowadays


Agreed. A Professional who does comprehensive financial planning is what most people actually need. A lot of them will do that type of work on an hourly or retainer basis.


That’s what I have been thinking, I can just open a vanguard account and purchase the funds myself. I just didn’t understand the explanation of why I needed to change my roth 401k to a Roth IRA.


So he can charge you to manage it. He can’t bill on your retirement account at work.
 

sleek98

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1.2% is high.

Personally I am not a fan of them, however I understand that some people don't want to even think about dealing with it so they do have a place.

I had my mom fire her "financial advisor" last year when I realized that he for the past 3 years he wasn't even close to making the average S&P 500 return that she was getting in her vanguard account. On top of that he was charging .9% of assets, basically to under perform.
 

FJohnny

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Bad idea to hire a friend to handle your money. My wife and I did that years ago. It was really uncomfortable for everyone when we had to fire him. Pretty much ruined the friendship.
 

Crimson2v

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Once again SVTP comes through! Thank you all for answering my questions, I believe I’ll go with my gut feeling and pass on this. We will just open something with Schwab or vanguard.
 

BigPoppa

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I've used Fidelity for the last 25 years and have been thoroughly satisfied.

Not only do they provide good financial planning, but they manage their own funds which have consistently been excellent performers.
 

ON D BIT

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I spoke to him and he recommended lowering my roth 457K to what my employer matches and open up a roth IRA through him with the rest I use to match. He also recommended opening up an investment account purchasing S&P ETF through him. I asked about fees and he charges 40 bucks per ETF trade and whenever I get into the long term client status he will charge 1.2% of the total assets in the portfolio to manage it.
If you return 5% he would need to return 6.5%

What’s his track record when compared to the s&p?
Does he he still get his cut when the market is down?
 

Crimson2v

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If you return 5% he would need to return 6.5%

What’s his track record when compared to the s&p?
Does he he still get his cut when the market is down?
I didn’t ask those questions. I really just thought we were just going to talk about what stocks I should get into while the market was down. Then I got the pitch that he wanted to manage our funds. Kind of through me for a loop.
 

verbal

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Your current investment situation seems pretty simple. I would not pay an advisor to put your money into an ETF. Other basic investment advice like Roth information is easily accessible online for free.

Look up JL Collins - Simple Path to Wealth. He recommends one or two Vanguard funds for all your money.

I interviewed an advisor last Fall and she wanted to charge me $6000 a year for a monthly call for basic investment advice and “managing” a portion of my investments. It turns out she was just wanted to put my money with Betterment into one of their portfolios.
 

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