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  • Am I firing my financial advisor too soon?

    Hey all. This didn't seem to fit in the "Financial Advisor" subforum but please let me know if it would be better suited in a different subforum.
    I was going to fire my financial advisor in about a year or so, but I've been playing with the idea of just doing it now...but I'm afraid I'm not yet ready to take it all over. What are your thoughts?

    Backstory:
    My wife and I are soon-to-be graduating residents in line for combined $400-500k gross income next year. $300k in student loans, about to refinance to 3% variable and pay off in ≤5 years.
    I knew absolutely nothing about finance before the past 2 months. I've been studying finance over the past 1-2 months like we did in medical school – drinking through a fire hose. Reading a finance book every 5 days, multiple daily emails, WCI blog posts, Bogleheads forum posts, hours of WCI podcast per day. It's been great and I have learned an absurd amount of information. I decided after reading all this that I was going to fire my financial advisor in the next year. I wanted to really get to understand this stuff super well and start playing a bit with it before taking total control from him. He charges 1-2% commission on AUM (and realistically I have very little assets for now), so the $800-1200 per year that he gets from that is not huge skin off my back. Plus he did get us good term life and disability insurance and somewhat help with a financial plan. BUT, he sold both my wife and I whole life insurance as well which I am still salty about. I talked to him today about dumping our WLI policies (which we've had for 13 months and already lost total $6k on between my wife and I) and he brought another partner on the phone and the two of them just went back and forth explaining why they thought it was good, they didn't want me to make a rash move, they didn't want me to just rely on information I read on WCI (yes, he specifically mentioned WCI multiple times). It was just...really uncomfortable. It just felt like one giant sales pitch where they were playing off each other to wear me down eventually. He ended the conversation with, "How about this, I'll send you some articles to look over and I'll send you this book (Cash Is King) to read over and we'll talk next week." And then he sent me some biased articles in favor of WLI, but I can find an equal number against WLI. My next payment is still two weeks away so I decided to humor him and read all those things, but I am 100% going to cancel my WLI (just wanted to see how it plays out with him after I read stuff). But after that conversation, I just felt such a scummy vibe. I started playing with the idea of just firing him now and taking over my finances now. But, realistically I don't know if I'm ready.

    Where We're At:
    My wife has done a bit of investing on Fidelity in the past, I've never dabbled on these websites or bought stocks/bonds (just signed up for a Vanguard brokerage account yesterday). Realistically I know it probably isn't THAT hard to just search the index fund name, put in number of shares and hit OK. She has a Roth IRA with $54k, we have a joint brokerage account with $26k (got from parents at around $23k and haven't added to it), and a joint savings account with $4k (plus $5k in bank checking/savings). I have no Roth IRA, we have no 401k's, no HSA, etc. We have only a 1 y/o so not interested in 529 just yet. We have our financial plan set for next year when we make attending money and I'm very clear on how that goes. Thanks to WCI for how to set that up, I'm eager to start putting all my money into that plan. But as of right now I would be at a loss with the actual nitty gritty "how to" of using these accounts to invest once I take it over. Here are some questions:

    1) My accounts are invested in BlackRock and are managed via Park Avenue Securities. If I leave this advisor, how do I get my money over to Vanguard (or Fidelity or TD/Ameritrade)? Do I have to sell all my shares, converting them to "cash," then transfer that cash to a new account and then buy stocks again with Vanguard? I know some stocks can be purchased at multiple different companies, but I was thinking of just doing Vanguard index funds and maybe REITs.

    2) Same with the Roth IRA...can I just change who is holding my Roth from BlackRock/PAS to Vanguard without doing anything else?

    3) Assuming this is all easy, my distribution right now is 60/40 stocks/bonds. As I said above, I'm not entirely sure which (index) funds I'm even invested in yet but I'm eager to learn. I want an 80/20 stocks/bonds ratio, so would I have to rebalance the whole portfolio?

    4) Since I want to get to 80/20, I'll have to rebalance my portfolio. This might mean selling several stocks and just buying a few index funds, REITs, and bonds, and forgetting about it for a year. In light of the market going down with coronavirus (I'm happy to buy in this market), is it a horrific time to rebalance since I might be selling off many things?

    TL;DR: My plan was to learn as much as possible about my portfolio and finances in general over the next 6-12 months, then fire my advisor. After a weird/negative conversation today with my advisor, I'm toying with the idea of moving the timetable up and firing him now, but I don't think I know enough yet. Is this reasonable/doable at all?

    Thank you so much for your thoughts.
    Doing dumb things with my money since (at least) 2011.

  • #2
    should have done it yesterday.
    at the very least you need a real advisor, not a salesman.

    Comment


    • #3
      You've done more learning already than most folks, so congrats on that. You should definitely bag the WLI - and that advisor - and take the 6k loss - they only want you to continue that for ongoing commissions. I'm not sure about Park Ave securities, but generally if you just open Vanguard accounts, they will do the transfers for you. Then perhaps just leave what you have there (i.e. the 60/40 allocation) and add to the stocks, over time, to get to 80/20; with your large looming income, that won't take long. Would check out the WCI blog on 150 portfolios: https://www.whitecoatinvestor.com/15...er-than-yours/ and pick something fairly simple.

      Comment


      • #4
        TLDR (most of it). These sales tactics bring me to a slow boil. But that is REALLY COOL and THOUGHTFUL that he sent you some self-serving and biased articles about life insurance! I bet he searched the web for hours on his personal time to find just the right information to help you make decisions that will help you improve your finances and reach FI as soon as possible! How sweet.

        You know, don’t you, that any decent FA will help you find an appropriate insurance advisor and a fee-only advisor will get nothing in return from the agent? Do you think your “advisor” helped you find insurance just because he’s a nice guy? Or that perhaps this was one of the steps leading you to buy WL? That doesn’t mean you don’t need an FA, just not this one.

        Yes, fire the guy. These folks are hired more for personality and sales skills than any other attribute. No wonder he has reeled you in to the point that you, as a WCI reader, are still questioning whether he‘s the right guy for you and your family. It’s like a spell you doctors fall under in residency - truly blows my mind.

        Ok, I know this sounds hard on you, but that’s not my intent - I’m a tough love mama. And it simply astounds me how many doctors tell me the same darn story. Be glad you found the medicine long before you got to stage 4 and hospice care.

        Wow, that felt good!
        Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

        Comment


        • #5
          If I got homework from a financial advisor I’d probably drive to his (or her, I don’t discriminate) office so I could personally shove it up their ******************.

          Comment


          • #6
            He was double-dipping with the AUM charge + selling you a glorified savings account with a mediocre death benefit aka whole life.

            If you are already second-guessing your FA's motivations you know what the answer is.


            Comment


            • #7
              Guess I'll be firing my advisor now instead of in a few months. Definitely wasn't expecting to do it this quickly but sounds like everything is falling into place and no better time than yesterday.

              I'll try to do an update post in the next 1-2 weeks once the dust settles. Plus I'm sure I'll have a few more questions, especially if some of my stocks aren't available at Vanguard and I have to sell before transferring.

              Thank you all for your thoughts. This has certainly been a whirlwind of a month!
              Doing dumb things with my money since (at least) 2011.

              Comment


              • #8
                The IRAs are easy. Just call Vanguard or Fidelity or Schwab or E*TRADE and tell them you want to rollover IRAs. The investments can liquidate to cash and transfer cash to the new IRAs with no tax consequence.

                the brokerage requires some more analysis. Depends on the holdings and the short or long term gains or losses and your income and tax rate.

                you could try to post the holdings and gains and maybe we can help figure that out

                it might make sense to cash out so that you can make 2019 IRA contributions now before it’s too late

                it may also make sense to cash out to help cash flow, so that you can contribute to workplace retirement accounts.

                that’s the type of stuff a real fiduciary advisor should have been helping with

                I would cancel the WLI and eat the loss. At least you learned your lesson early and at 4 figures instead of 5 or 6

                Comment


                • #9
                  Originally posted by CordMcNally View Post
                  If I got homework from a financial advisor I’d probably drive to his (or her, I don’t discriminate) office so I could personally shove it up their ******************.
                  Homework?
                  Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                  Comment


                  • #10
                    Originally posted by jfoxcpacfp View Post

                    Homework?
                    The biased articles to look over and the book to read. Homework probably wasn’t a technically accurate description.

                    Comment


                    • #11
                      Originally posted by CordMcNally View Post

                      The biased articles to look over and the book to read. Homework probably wasn’t a technically accurate description.
                      Got it. All of our planning clients get a copy of Simple Wealth, Inevitable Wealth. You’d have quite a drive to shove it up my a$$.
                      Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                      Comment


                      • #12
                        Originally posted by jfoxcpacfp View Post

                        Got it. All of our planning clients get a copy of Simple Wealth, Inevitable Wealth. You’d have quite a drive to shove it up my a$$.
                        I hope it is not in hardcover.

                        Comment


                        • #13
                          Originally posted by Lordosis View Post

                          I hope it is not in hardcover.
                          Very much so. That could be rather awkward.
                          Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                          Comment


                          • #14
                            Originally posted by jfoxcpacfp View Post

                            Very much so. That could be rather awkward.
                            Maybe you should start sending the PDF. Especially if you send anything to CordMcNally

                            Comment


                            • #15
                              You are most definitely not overreacting. Also, there was great feedback I saw along the way. Like it’s been said, find a fiduciary if you feel like you’re being sold to it’s because you are. And hearing you say that he “somewhat helped with a financial plan” is what really makes that clear. Jumping into insurance pitches and managed money without great planning is the equivalent of writing you financial prescriptions without any proper diagnosis.. it’s reckless and moving makes sense.
                              Founder, Coastal Wealth Planners- Fiduciary Tax-Sensitive Retirement Planning & Wealth Management www.coastal-wp.com email: [email protected]

                              Comment

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