A financial advsior as a yearly checkup?

[PenguinMD]

Given the majority of the audience here is likely self-selected DIYers who have interest in learning about finance, wondering for the DIY types do you use a FInancial Advisor as just check-in for let's say a yearly checkup or just for a second opinion to see if you could be doing better?

I'm somewhat in that boat where I'm a financial DIYer and find learning about finance and investing interesting.

While getting ready for our taxes (I do it myself as I want to know how the numbers flow, I will also sometimes go into specific forms to see how the numbers add up and where and what taxes are being paid such as the NIIT - really impossible to get around that one), I have the what-if if I could do better with some help such as a financial advisor.

To get a sense of my current level. I don't consider our tax situation that complicated as it's dual income with straight W2s, we do have k-1s from crowdsourcing investments (startups and real estate) plus a housing deduction with standard 1099s that come in that need to file most annoying is the tax forms coming out of P2P where need to account of charge-offs and recollections. Net it's somewhat complicated but comfortable handling things myself.

On investing side, I do completely self-directed with bulk in retirement accounts in vanguard funds when possible or low cost index funds. I do have a speculative brokerage account where I get to place my bets on individual stocks, plus branch out to P2P investing plus dabbling in Crowdfunding equity deals.

But want to know if getting a Financial Advisor would take my game to the next level.

I looked on the FA recommended page and majority seem to want to do AUM where they would make the bulk of the money (I understand people need to eat).

But for the DIYers is there a place for Financial Advisor to just be a sounding board for ideas and second opinions if I can do better? It'll be like a specialist that you just consult once or twice a year.

We're essentially at the point where it's more of a game on how to keep more vs earn more.

Any primary DIYers out there that use a Financial Advsior and how does it fit with your plan on how you manage your finances?

Thanks!

[WallStreetPhysician]

PenguinMD wrote:

Given the majority of the audience here is likely self-selected DIYers who have interest in learning about finance, wondering for the DIY types do you use a FInancial Advisor as just check-in for let’s say a yearly checkup or just for a second opinion to see if you could be doing better?

I’m somewhat in that boat where I’m a financial DIYer and find learning about finance and investing interesting.

While getting ready for our taxes (I do it myself as I want to know how the numbers flow, I will also sometimes go into specific forms to see how the numbers add up and where and what taxes are being paid such as the NIIT – really impossible to get around that one), I have the what-if if I could do better with some help such as a financial advisor.

To get a sense of my current level. I don’t consider our tax situation that complicated as it’s dual income with straight W2s, we do have k-1s from crowdsourcing investments (startups and real estate) plus a housing deduction with standard 1099s that come in that need to file most annoying is the tax forms coming out of P2P where need to account of charge-offs and recollections. Net it’s somewhat complicated but comfortable handling things myself.

On investing side, I do completely self-directed with bulk in retirement accounts in vanguard funds when possible or low cost index funds. I do have a speculative brokerage account where I get to place my bets on individual stocks, plus branch out to P2P investing plus dabbling in Crowdfunding equity deals.

But want to know if getting a Financial Advisor would take my game to the next level.

I looked on the FA recommended page and majority seem to want to do AUM where they would make the bulk of the money (I understand people need to eat).

But for the DIYers is there a place for Financial Advisor to just be a sounding board for ideas and second opinions if I can do better? It’ll be like a specialist that you just consult once or twice a year.

We’re essentially at the point where it’s more of a game on how to keep more vs earn more.

Any primary DIYers out there that use a Financial Advsior and how does it fit with your plan on how you manage your finances?

Thanks!

Click to expand...

People are saying that the annual medical physical is not recommended anymore. Similarly, it will be hard to find a financial advisor who will do a yearly checkup, since their business is based on AUM. One option would be to sign up for Personal Capital and let them do their pitch to you - they might have insights that you may not have appreciated. You could probably do the same with any financial advisor ("free portfolio review"). I assume most financial advisors would be happy to do this, because it gives them a shot to sell their services to you.

[conniebird]

WallStreetPhysician wrote:

PenguinMD wrote:

Given the majority of the audience here is likely self-selected DIYers who have interest in learning about finance, wondering for the DIY types do you use a FInancial Advisor as just check-in for let’s say a yearly checkup or just for a second opinion to see if you could be doing better?

I’m somewhat in that boat where I’m a financial DIYer and find learning about finance and investing interesting.

While getting ready for our taxes (I do it myself as I want to know how the numbers flow, I will also sometimes go into specific forms to see how the numbers add up and where and what taxes are being paid such as the NIIT – really impossible to get around that one), I have the what-if if I could do better with some help such as a financial advisor.

To get a sense of my current level. I don’t consider our tax situation that complicated as it’s dual income with straight W2s, we do have k-1s from crowdsourcing investments (startups and real estate) plus a housing deduction with standard 1099s that come in that need to file most annoying is the tax forms coming out of P2P where need to account of charge-offs and recollections. Net it’s somewhat complicated but comfortable handling things myself.

On investing side, I do completely self-directed with bulk in retirement accounts in vanguard funds when possible or low cost index funds. I do have a speculative brokerage account where I get to place my bets on individual stocks, plus branch out to P2P investing plus dabbling in Crowdfunding equity deals.

But want to know if getting a Financial Advisor would take my game to the next level.

I looked on the FA recommended page and majority seem to want to do AUM where they would make the bulk of the money (I understand people need to eat).

But for the DIYers is there a place for Financial Advisor to just be a sounding board for ideas and second opinions if I can do better? It’ll be like a specialist that you just consult once or twice a year.

We’re essentially at the point where it’s more of a game on how to keep more vs earn more.

Any primary DIYers out there that use a Financial Advsior and how does it fit with your plan on how you manage your finances?

Thanks!

Click to expand…

People are saying that the annual medical physical is not recommended anymore. Similarly, it will be hard to find a financial advisor who will do a yearly checkup, since their business is based on AUM. One option would be to sign up for Personal Capital and let them do their pitch to you – they might have insights that you may not have appreciated. You could probably do the same with any financial advisor (“free portfolio review”). I assume most financial advisors would be happy to do this, because it gives them a shot to sell their services to you.

Click to expand...

Not all FAs are AUM, many are flat fee. Mine is.

But I think yearly is too often. Maybe every 5 years or as significant events come up (divorce, windfall, job changes, etc)?

Once ur asset allocation is set, it's pretty much on auto-pilot... so depends on what you want this yearly check-up to actually do for you.

[jhwkr542]

I don't, and I won't.  Anybody who guarantees they can beat a 3 fund portfolio is lying.  They might be able to, but it'd be more luck than skill.  If you want a second look, you can post your portfolio over at bogleheads.  Lots of people do, the advice is free, and that community isn't trying to sell you anything.

[PenguinMD]

Good idea, I guess I could always do the "complimentary" route. I have access to Fidelity Premium Services, Vanguard Advisory (via 401k plan), recently Chase Private Client, using Personal Capital but never took their call. I was real interested is shifting toward robo-advisors with their auto tax loss harvesting but they found out about wash rules which killed that idea.

My sense is they are all going to try to upsell me something I really don't need and tell me things I already know like I'm overweighted in certain asset classes. So don't want to waste time but maybe I could learn something and get some ideas.

It's somewhat like I know I need to exercise more and eat better but still go to the doctor to see if there's a "shortcut" to better health.

I wonder if FA feel a DIYer/bogglehead is similar to the pt that comes in with all this "knowledge" they accumulated by reading the web and surfing some blogs and know what's best? Which essentially I did to learn about investing and money management.

I'm leaning toward finding a fee-only advisor and doing an in depth review to see if I could be doing better but I somewhat feel that's almost like the healthy pt who's on HMO who decides to go out of network to some wellness spa to get full physical and health review (full work up) with a concierge doc.

The only reason I started on this train of thought was because I'm starting to look at our taxes and how I can keep more, we're nearly hitting the highest tax bracket (marginal) so hate writting that huge tax bill I need to do every time this year . Although, we now are eligible for deferred comp so able to deploying that tax deferment strategy (taking more off the "top" layer of the cake).

Maybe it's more a tax planner I need, this again is something I feel I'm going hear what I already know. Try to get off W2, become self-employed for all the write-offs/deductions that seems to the holy grail.

The other thinking of course is paying high tax is just an indication of success --- so be happy .

[VagabondMD]

I have used financial advisors in the past and have found them useful. They have experience and perspective that can be valuable. I currently do not have a relationship with one but would not rule out the possibility of one in the future. I also would not take out my own gallbladder, but, no doubt, some of the participants here would take theirs.

[Complete_newbie]

W2 income vs business income. Really two tax system in USA. Favors the business owners by a mile. Own business to reduce taxes; can't hide behind W2 income.

[conniebird]

Seems to be a lot of misconceptions as to what an FA does and doesn't do......mainly the negative comments refer to as Jim says, commissioned salesmen that call themselves FAs, vs a true full service FA. Portfolio mgt is a small portion of their job.

[artemis]

conniebird wrote:

Seems to be a lot of misconceptions as to what an FA does and doesn’t do……mainly the negative comments refer to as Jim says, commissioned salesmen that call themselves FAs, vs a true full service FA. Portfolio mgt is a small portion of their job.

Click to expand...

Exactly.  A true FA's main worth is devising strategies to efficiently minimize taxes down the road, devising strategies to protect assets in the event of a calamity (big lawsuit, divorce), and general estate planning.  All that stuff is much harder than setting up a 3-fund lazy portfolio, and paying for good advice on those matters is money well spent.  But I can't see why you'd need such advice on a yearly basis.  Once every 5 years or so ought to be enough for most of us.

[Zaphod]

My issue isnt that there arent some reasonable people that could do it for you every now and then. Its really that once you're a DIY type of person it is really on auto pilot and what is there to do? I'd reassess goals and progress yearly and see if your allocation is what you want and enough to achieve those goals, otherwise you know exactly whats going on, and by the time you do a FA isnt going to tell you anything you dont already know.

Are you getting the market return for your asset allocation mix? If so, the only thing you can do is take on more risk, that is the only way to increase your returns above your current allocation (usually by changing that mix).

So I'd just ask what are you trying to achieve and is your current AA matched to that goal?

[RadDoc6876]

After following WCI for several years and being a Bogle-head, if I were to hire anyone at this point it would be 1) a CPA to scrutinize my taxes and give me feedback and advice, though maybe not every year, and/or 2) an attorney to help with asset protection and estate planning.  In both cases I view it as hiring them to look at discrete events and issues, not to take over my personal finances on an on-going basis.  I would not hire a "financial advisor" just to look over my finances in general and think up something to sell me, any more than I would pay a contractor to walk around my house and find something to fix and charge me for.

[conniebird]

Rex wrote:

I don’t find those things that difficult and every single FA I’ve met tried the permanent insurance angle to “solve” those issues.

Click to expand...

Well those aren't really FAs..those  are the salesmen I mentioned.