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  • Financial advisor recommendation

    Hi

    I just spoke with a financial advisor (fiduciary and fee based).  I am 44, new to the USA, first time using 401 k and she recommends I start putting my contributions into the following :
    59% Vanguard Total Stock Market Index

    30% Vanguard Total International Stock Market Index

    11% Vanguard Total Bond Market Index 


    I just want to check what you folks think ...


    Thank you

  • #2
    Not something I would be excited about paying for. Note that fee-based is not fee-only.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3




      Hi

      I just spoke with a financial advisor (fiduciary and fee based).  I am 44, new to the USA, first time using 401 k and she recommends I start putting my contributions into the following :
      59% Vanguard Total Stock Market Index

      30% Vanguard Total International Stock Market Index

      11% Vanguard Total Bond Market Index 


      I just want to check what you folks think …


      Thank you

      Click to expand...


      You paid a financial advisor to tell you what literally almost every person on this forum would have told you for free...though I suppose it is good that she gave you low-cost options.

      What is she charging you?  Per session, or assets under management?  Paying AUM fees for what basically equates to DIY bro-investing is even more of a waste than AUM fees usually are.

      Comment


      • #4
        Just curious why 11% bond and not ten or fifteen? Was it your age?

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        • #5
          charges 2000-3000 for a plan then 200 an hour after that , I think it was useful for a once off at least as new to the country and want speed up my plans a bit,  but it does seem that once you learn about finance you can pretty much DIY yourself

          not sure why 11%,  I assume it is to do with my risk score  (I completed a questionnaire) and age which is 44.

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          • #6


            not sure why 11%, I assume it is to do with my risk score (I completed a questionnaire) and age which is 44.
            Click to expand...


            The tried-and-true "age - 33" bond allocation.

            There're nothing wrong with 11%, but 60 /30 / 10 looks cleaner than 59 / 30 / 11.

            It's a fine recommendation (the three fund portfolio) and if I could get $2,000 to $3,000 for everyone I turn on to the idea, I'd be retired by now.

            Cheers!

            -PoF

             

             

             

            Comment


            • #7
              since you posted twice...

              "while the choice of funds are great/perfect even, the % is strange.

              why 89:11? why is that better than 90:10 or 85:15? that makes no sense to me.

              also why 33.7% in international stocks? Vanguard rec between 20-40% and they have chosen 40%. Used to be 30% as the sweet spot. Some argue 0 all the way to market cap (55% now i think?).

              this advice is not worth 2-3k. that is a rip off.

              edit to add: also do you have previous retirement accounts (401k, IRA, SEP, etc). these need to be taken into account as well and the whole pot should be looked at as one.

              also per the comments above, it might be a little risky. if you are 89% stock, expect to lose half, or 44.5% of your portfolio in the next downturn (seriously….why 89??   :|  ). might be fine for your income at 44, might not be. only you can answer that.

              why not this:

              – 80:20 stocks to bonds

              – 30% of stock in international

              – so final of: 56% US: 24% Intl : 20% Bond/FI

              – adjust as desired or as want/need/willingness for risk changes

               

              thank you in advance for my check in the mail    "

              Comment


              • #8
                Very basic, plain-vanilla asset allocation recommendation. Would need to know more about cost of advisor and services provided to give you an informed opinion.

                Comment


                • #9
                  What the heck are you guys complaining about? The advisor charges a fair fee and gives good advice. A "simple, vanilla" portfolio is just fine if adequately funded and behaviorally managed.

                  If you want financial advice, I think you're doing just fine with this advisor. That said, one of the easiest things to take over yourself is the asset management, and now you can see why.
                  Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                  • #10
                    thanks folks for all the advice ... Im happy that overall it seems the recommendation is pretty good

                    I did get a financial plan and some projections alright for the initial fee , it most improtantly made me actually get everything together

                    there is a lot to learn alright about finance , just read the WCI book and plan to read physicians on fire and WCI websites

                    Comment


                    • #11




                      What the heck are you guys complaining about? The advisor charges a fair fee and gives good advice. A “simple, vanilla” portfolio is just fine if adequately funded and behaviorally managed.

                      If you want financial advice, I think you’re doing just fine with this advisor. That said, one of the easiest things to take over yourself is the asset management, and now you can see why.
                      Click to expand...


                      Most of the "complaints" came before we knew that there was a plan attached. The original post seemed to indicate that he was paying for investment management only.
                      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                      Comment


                      • #12
                        True. I think most of us get past that initial hurdle quickly and looking back 3K sounds steep.
                        But definitely worthwhile if it pushes you towards the correct direction.

                        Comment


                        • #13
                          Above discussion/recommendation for Vanguard
                          59% Vanguard Total Stock Market Index 

                          30% Vanguard Total International Stock Market Index 

                          11% Vanguard Total Bond Market Index 

                          is it Mutual Funds or ETFs? Which product?

                          I would like to follow this advice?

                           

                          Someone mentioned that there are promotion too when opening Vanguard accounts where you can get miles etc

                          Comment


                          • #14
                            Mutual index fund

                            Comment


                            • #15




                              Above discussion/recommendation for Vanguard
                              59% Vanguard Total Stock Market Index 

                              30% Vanguard Total International Stock Market Index 

                              11% Vanguard Total Bond Market Index 

                              is it Mutual Funds or ETFs? Which product?
                              I would like to follow this advice?
                              Someone mentioned that there are promotion too when opening Vanguard accounts where you can get miles etc
                              Click to expand...


                              Doesn't really make much difference. Might be some intra-day highs/lows or bid/ask spread, but in the end NAV is the same and composition is the same.  It's just different-type shares of the same fund.  ETFs have the admiral-shares ER which has a $10,000 minimum buy-in for mutual funds, but the amount you would lose by having the "investor" shares is like $10/yr max.

                              • Total stock mkt = VTSAX or VTI

                              • Total int'l stock mkt = VTIAX or VXUS

                              • Total bond mkt = VBTLX or BND


                              ...are you referring to a bonus just by opening the brokerage account, or with a credit card associated with it?

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