Picking financial advisor

[bszerlip]

Just read book and new to site.... first off thank you to Dr. Dahle! Was incredibly helpful to gain better understanding with concepts I struggled with and more importantly exposed me to concepts I wasnt even aware of!!

My question comes from looking at financial advisor that was NOT on list but was given positive reviews for his book... Peter Mallouk. see White coat investor link below

https://www.whitecoatinvestor.com/the-5-mistakes-every-investor-makes-and-how-to-avoid-them-a-review/

I am considering his company creative planning and wanted to know if anyone has had experience with their team and how they compare with other advisors on the list given on the white coat site.

https://www.whitecoatinvestor.com/financial-advisors/

Thanks again to everyone who makes this site great!

Ben Szerlip

[VagabondMD]

I would be hesitant to choose that firm. They are currently extraordinarily popular, on everyone's list of #1 investment advisor in the country and recently endorsed by everyone's guru, Tony Robbins, in their co-written book, Unshakeable.

https://riabiz.com/a/2017/3/1/peter-mallouk-tony-robbins-partnership-set-to-soar-on-new-book-but-quid-pro-quo-details-of-pact-between-23-billion-ria-and-super-salesman-are-still-murky

I would just be concerned that there might be too much growth at that firm to provide consistent, personalized service, which is what you would be paying for. I have no evidence that this is the case, but it would appear that everyone is piling into the firm. Perhaps you can get some references from current clients to help dispel this concern.

There are a lot of great advisors out there, and the relationship between you and the advisor is critical. Anyone can put you in a 60:40 allocation of index funds (or whatever), but it is the hand holding through rough times, the availability in financial emergencies, and the ability of the advisor to understand you and how you tick that will make it worth the money that you will pay over the years (which may be substantial).

[Miss Bonnie MD]

In case you find this helpful - I wrote a 4 part series on Everything you want to know about Financial Advisors.

[The White Coat Investor]

Question # 1- Do you need an advisor or can you competently do it yourself?

Question # 2- If you need an advisor, does the advisor you are evaluating offer good advice?

Question # 3- If you need an advisor, and the advisor you are evaluating offers good advice, does he do so at the lowest possible (or at least a fair) price?

Do you know what good advice looks like yet?

[Hatton]

My advice would be to look for an advisor who uses Schwab, vanguard, or fidelity funds or etfs. You might even use the advisor through a correction or bear market then strike out on your own.

[LizFK]

Piggybacking here; it seems very difficult to find someone who is truly hourly or fee-based, and not percentage of percentage of assets managed.  I don't want to pay someone several thousand dollars a year to manage all of my assets, I just want some good advice of where to allocate funds and which investments to reallocate. Besides spending hours scouring forums and trying to figure out which index funds or whether to put extra money towards paying loans or towards additional savings, are there financial professionals that just offer advice that I can pay and meet with once or twice every year just to ensure that I'm on the right track?

[DMFA]

The White Coat Investor wrote:

Do you know what good advice looks like yet?

Click to expand...

Probably the best question anyone could ask, really.

[VagabondMD]

LizFK wrote:

Piggybacking here; it seems very difficult to find someone who is truly hourly or fee-based, and not percentage of percentage of assets managed.  I don’t want to pay someone several thousand dollars a year to manage all of my assets, I just want some good advice of where to allocate funds and which investments to reallocate.  I have met with a group claiming to be fee-based in my area, and during the sales pitch meeting, he advised most of the funds and accounts that I already have (Schwab, Barclays Savings, etc).  Besides spending hours scouring forums and trying to figure out which index funds or whether to put extra money towards paying loans or towards additional savings, are there financial professionals that just offer advice that I can pay and meet with once or twice every year just to ensure that I’m on the right track?

Click to expand...

Why, yes!

i just tonight had a (virtual) meeting with Mark Zoril (PlanVisionmn.com). For a basic financial planning consult, he charges $96. It's hard to beat that.

Here's Mark interviewed on Doughroller, where I learned about him:

http://www.doughroller.net/financial-planning/the-96-dollar-financial-plan-from-mark-zoril/

[bszerlip]

To Vegabond

Agreed on apprehension. Creative planning may struggle to sustain growth AND maintain quality service to clients. But this doesn’t completely rule them out for me. Is they’re #1 rating and popularity due to performance or hype? Maybe both? Bringing to next response

 

To White Coat investor

Question # 1- Do you need an advisor or can you competently do it yourself?

Answer: I want an advisor for now, long term goal is myself.

I’m an orthopedic surgeon 2 years out of fellowship in Texas still living on resident salary. I want someone who can teach me about investing (protect me from beginner mistakes) as well as decrease my effective tax rate! Based on the everything I’ve read it will be easier to pay less in tax than beat market. I know this will be up to CPA and not CFP but open to advisors who provide comprehensive planning.

Question # 2- If you need an advisor, does the advisor you are evaluating offer good advice?

I’ve used your book and link below for selection criteria but honestly I cant say I know what good advice looks like yet. Thoughts?

https://www.whitecoatinvestor.com/the-perfect-financial-advisor/

Question # 3- If you need an advisor, and the advisor you are evaluating offers good advice, does he do so at the lowest possible (or at least a fair) price?

I like the AUM fee at this point in financial career because they agreed to take me on for 1% or less (currently negotiating) even though my assets are much less than a million… making this comparable to fee based structure with potentially more service/ support.

If and when AUM doesn’t justify cost I hope to be experienced enough to do it myself or renegotiate fees. Only tricky part is I don’t know how hard advisors make it to “back out” 5 years or so down the road… to Dublin

I think a potential solution is for White coat experts to offer service of interviewing advisors being considered by clients (like me) for an hourly fee. In my opinion this would be money well spent!

Thank you,

Ben

[The White Coat Investor]

LizFK wrote:

Piggybacking here; it seems very difficult to find someone who is truly hourly or fee-based, and not percentage of percentage of assets managed.  I don’t want to pay someone several thousand dollars a year to manage all of my assets, I just want some good advice of where to allocate funds and which investments to reallocate.  I have met with a group claiming to be fee-based in my area, and during the sales pitch meeting, he advised most of the funds and accounts that I already have (Schwab, Barclays Savings, etc).  Besides spending hours scouring forums and trying to figure out which index funds or whether to put extra money towards paying loans or towards additional savings, are there financial professionals that just offer advice that I can pay and meet with once or twice every year just to ensure that I’m on the right track?

Click to expand...

If you aren't willing to pay several thousand dollars, you need to learn to do it yourself. That's actually a pretty fair price for financial advice. If paying $5-10K a year seems outrageous to you, you have no business using a financial advisor for anything other than an occasional check-up. Sorry, that's what this stuff costs.

[Hank]

A true fee-only financial advisor (not "fee-based") may be in order.  I'd take a look at NAPFA.org as a starting point.

Probably a bias on my part, but if I heard Tony Robbins was associated with something, I'd probably run the other direction.

[The White Coat Investor]

bszerlip wrote:

To Vegabond

Agreed on apprehension. Creative planning may struggle to sustain growth AND maintain quality service to clients. But this doesn’t completely rule them out for me. Is they’re #1 rating and popularity due to performance or hype? Maybe both? Bringing to next response

 

To White Coat investor

Question # 1- Do you need an advisor or can you competently do it yourself?

Answer: I want an advisor for now, long term goal is myself.

I’m an orthopedic surgeon 2 years out of fellowship in Texas still living on resident salary. I want someone who can teach me about investing (protect me from beginner mistakes) as well as decrease my effective tax rate! Based on the everything I’ve read it will be easier to pay less in tax than beat market. I know this will be up to CPA and not CFP but open to advisors who provide comprehensive planning.

Question # 2- If you need an advisor, does the advisor you are evaluating offer good advice?

I’ve used your book and link below for selection criteria but honestly I cant say I know what good advice looks like yet. Thoughts?

https://www.whitecoatinvestor.com/the-perfect-financial-advisor/

Question # 3- If you need an advisor, and the advisor you are evaluating offers good advice, does he do so at the lowest possible (or at least a fair) price?

I like the AUM fee at this point in financial career because they agreed to take me on for 1% or less (currently negotiating) even though my assets are much less than a million… making this comparable to fee based structure with potentially more service/ support.

If and when AUM doesn’t justify cost I hope to be experienced enough to do it myself or renegotiate fees. Only tricky part is I don’t know how hard advisors make it to “back out” 5 years or so down the road… to Dublin

I think a potential solution is for White coat experts to offer service of interviewing advisors being considered by clients (like me) for an hourly fee. In my opinion this would be money well spent!

Thank you,

Ben

Click to expand...

Backing out isn't too hard as long as you're comfortable saying "thanks for what you've done, but I'm moving on" and as long as the advice was good (i.e. you don't have low basis shares in crappy mutual funds or some cash value life insurance policy you don't want.)

[ajm184]

LizFK wrote:

Piggybacking here; it seems very difficult to find someone who is truly hourly or fee-based, and not percentage of percentage of assets managed.  I don’t want to pay someone several thousand dollars a year to manage all of my assets, I just want some good advice of where to allocate funds and which investments to reallocate. Besides spending hours scouring forums and trying to figure out which index funds or whether to put extra money towards paying loans or towards additional savings, are there financial professionals that just offer advice that I can pay and meet with once or twice every year just to ensure that I’m on the right track?

Click to expand...

Depending upon where you live and the importance you place on meeting with a financial professional in person could limit the pool.  Most financial professionals do some type of skype/VOIP that allows you to talk with, see the person over a computer/phone.  I worked with a financial planner to reassure my wife (a DPM) that our previous choices in estate planning, investing, insurance etc. were appropriate. I worked with Jim MacKay (of Springfield, MO, live in Bentonville, AR) last summer.  I choose the hourly approach, he provided an estimate upfront of time (and met it).  Be prepared to provide alot of information under this scenario in order to get good advice/guidance.

In addition, he offers 'ongoing' planning for a bit over $1k/quarter.  In either case, he is not an AUM person and is a big believe in Vanguard (though he did work for them), both points I really find appealing.

[Physicians Capital Management LLC]

Ben,

Pick an advisor that admits you eventually will not need an advisor.  It is rare that you will find that, because the advisor essentially is admitting that he or she has a job that is not required on an ongoing (think recurrent fee) basis.  This is a lot easier than ortho---after the initial learning curve most find it almost like a joke.  Think of it this way, how hard is it to explain to a physician to "call Vanguard, tell the rep to guide you through putting $3,000 into the total stock market index fund.  The symbol is VTSMX."  What you want is a tutor so that eventually you don't need an advisor.  Think of it like the first time you learned to do a central line.  After a few of them, you did not need the mentor anymore.  Basically, you will get your debt paid down, and gradually get money into 3-5 index funds and then forget about it.  Once you do a backdoor Roth for year one, for the rest of your career you will know how to do it.  It is not hard to pick a fund from the Utah 529 plan and contribute to it each year or monthly.  The goal of the advisor in your situation should be to make it so that you don't need an advisor.  I would not go with an AUM approach, because you are going to want to log in and do it yourself.  Back to the central line example, you cannot learn to put in a line without getting your hands dirty and being in the drivers seat.  Get in that drivers seat from day one.  Good luck!  RG