Independent... really?

[jfoxcpacfp]

I obviously also "waste" too much time learning about this stuff. But I agree with The White Coat Investor that learning this stuff may actually pay more per hour than doctoring. Especially considering I may have been paying someone, with the equivalent of 2.5 weeks of training, $1000/h to do it for me. Doh! Plus, it would have likely gotten way more expensive from here. Good to nip this in the bud/cut my losses. Better late than never.

Fyi, if your advisor has a CFP, he has far more training than that and has been required to work under a CFP for 3 years before becoming licensed. Should also have a Series 65 license that may be what you were talking about re: 2.5 wks of training. The CFP has a very difficult and comprehensive test that most don’t pass on first try, either. But I agree with others - either give DIY a go with a little help from your friends here or get a financial checkup or some hourly advice for the areas you are weak on.

Emotions are your worst enemy when it comes to finance. The support of either this forum or the appropriate financial advisor will make a world of difference.

[GasFIRE]

My wife is tired of hearing about investing and personal finance. Nice to meet other finance nerds who can teach me/discuss!

Great to find the forum, so thank you!

You’ve done a great job of educating yourself on the issues. Is she OK with a DIY approach or does she want someone to handle “OUR” finances? A lot of great suggestions here but this question does need an answer.

[Tortoise]

Fyi, if your advisor has a CFP, he has far more training than that and has been required to work under a CFP for 3 years before becoming licensed. Should also have a Series 65 license that may be what you were talking about re: 2.5 wks of training. The CFP has a very difficult and comprehensive test that most don’t pass on first try, either. But I agree with others - either give DIY a go with a little help from your friends here or get a financial checkup or some hourly advice for the areas you are weak on.

Emotions are your worst enemy when it comes to finance. The support of either this forum or the appropriate financial advisor will make a world of difference.

jfoxcpacfp, thank you for this clarification. I certainly do not mean to discount the amount of training required to become a CFP and I count CFP among the few most important qualifications to look for in an advisor. My comment about "the equivalent of 2.5 weeks of training" was taken from the math of The White Coat Investor, whom I believe said it takes about 200 hours of study to pass the CFP exam (I've seen ranges 150-250, with the CFP Board apparently recommending 250), which The White Coat Investor equated to 2.5 weeks of residency training at 80 hours per week. I believe his intention was to give doctors hope and encouragement by pointing out that we spend many hours studying medicine and with a relatively small number of hours studying financial planning, we too can gain some proficiency (so that "MD" is less likely to stand for "Money Dumb"), with a relatively good return on investment of our time (no offense meant by him or me, certainly! My advisor passed the Series 65 and started his solo business straight out of undergraduate. I'm not sure which CFP he worked under for 3 years.

Thank you and others on this forum. With your encouragement, today I transferred the remainder of my AUM accounts to Schwab. It felt like a weight lifted. I believe I will sleep well tonight, knowing I'm moving to a good brokerage, with plenty of help available from forum members and my fee-only hourly fiduciary advisor if needed.

My advisor noted how even-keeled my emotions have been during ups/downs 2004 to present. I anticipate that I can keep them so without his guidance, along with the help of the forum and my fee-only hourly fiduciary.

[Tortoise]

You’ve done a great job of educating yourself on the issues. Is she OK with a DIY approach or does she want someone to handle “OUR” finances? A lot of great suggestions here but this question does need an answer.

GasFIRE, thank you for your encouragement. Great question. Yes, my wife has full (maybe too much?) confidence in me being able to handle a DIY approach. She's seen the hundreds of hours I've spent tracking the performance of our accounts in Excel (they do better when I stop draining them of fees, investing in such a high percentage of bonds and rebalancing so often, at least during this bull market), listening to podcasts, reading, interviewing potential advisors, etc. (Of course, this isn't entirely DIY, as the portfolio was created by a fee-based CFP and I simply plan to rebalance less often (every 1-3 years), and gradually steer it to a more simple allocation, with less redundancy and over-diversification, periodically double-checked by a fee-only fiduciary hourly advisor and this forum if/when I have specific questions and/or otherwise need guidance. Mainly, my wife has seen the fruits of decades of saving, investing, compounding and a record bull market during our marriage, so perhaps gives me too much credit. My main virtues are patience, persistence, hard work, having low spending needs, living below my means, being a good saver, consistent investor, seeking sound advice then taking action. My wife is a fun but no-nonsense business professional. She was aggravated by the lack of decisive action, clear recommendations and follow-through at my old advisor's office. She encouraged me to leave my advisor, invest more aggressively, etc. I try to encourage her to participate in "OUR" financial management, as we live in a community property state and these decisions affect her as much as me. This is OUR money and I try to help her take ownership. I benefit greatly from her confidence, gut instinct, sales experience and business sense if nothing else, having very little patience for BS and time-wasting.

[Tim]

TLDR
Dude, you don’t need to learn how to “do this stuff”., you pay experts to fill in the blanks.
You have spent way more time on vetting rather than defining your objectives (goals) and how to achieve them.

• A financial plan on how to achieve your goals
• How much you make has been your focus. Mistake. It is how much you keep.
• Keep the portfolio as simple as possible, tax efficient and low cost.
• Risk management appropriate. Both for portfolio, insurance and asset protection.
• Estate planning.
• Taxes

What outside services do you need. The value is in the services, not the cost. Your FA is not adding value., only cost. Portfolio questions, ask away. Hint, complexity doesn’t accomplish diversification, usually it is a tilt or search for alpha.
Insurance: You brought up LTDI coverage for a two income unit. That in itself gets complicated. How much does each actually need and when to cut it. Ask away. Many blog articles and threads.
Umbrella, home owners, car, health , term life, anything else?
Wills, estate plans, trusts ask away.
Taxes feel free.
No one relies on advice here. But it educates you to seek professional advice and ask the right questions. Your CPA can be a valuable resource in planning for tax efficiency. Professional advice is expensive, knowledgeable questions is a cost reduction.
The goal is to keep your money, not make the most.
By the way, what is your retirement savings rate and wealth accumulation rate? That is probably the most critical question. .
From your responses, you have the capability to research, just asking the wrong questions and should focus on keeping the most money.

No one cares about your advisor, you don’t need to pay anything. You can get a low cost portfolio review, or pay for a financial plan or services you need.
Welcome to the Forum.

[Tortoise]

My old fee-based advisor says execution is everything. And fee-only advisors can’t implement nearly as many of the action items of a financial plan on the behalf of clients.

What action items of a financial plan might a fee-only advisor be unable to execute (that a fee-based advisor could)?

[White.Beard.Doc]

I looked at Ameriprise and how they choose the mutual funds they invest in. Here is one of their key criteria:

• Cost reimbursement payments paid to our affiliate AEIS to support cost reimbursement services

So you are not getting low cost funds, and you are paying the CFP fees. If you do this yourself, the fees saved can be huge over a 3 decade investing career, as in a large 6-figure amount.

But just the same, you have to be able to control your emotions and stick to a plan when the financial markets are in turmoil. That is a common place where DIY investors can get in trouble. Having a written financial plan that you will commit to through thick and thin can help with this.

[Kamban]

My old fee-based advisor says execution is everything. And fee-only advisors can’t implement nearly as many of the action items of a financial plan on the behalf of clients.

What action items of a financial plan might a fee-only advisor be unable to execute (that a fee-based advisor could)?

Fee based - HE invests YOUR money in the mutual funds he has vested interest in and probably gets kickbacks.

Fee only - He/She makes recommendations of funds. You do independent verification of the funds. Since the FA does not get a commission or kickback it is more likely to be a no load, low expense ration mutual fund or ETF. YOU invest YOUR MONEY then via Fidelity or Schwab or Vanguard.

What could be more simple than that. What lies is the fee based advisor feeding you to keep you in his fold and why are you still believing what he says.

[Tortoise]

I looked at Ameriprise and how they choose the mutual funds they invest in. Here is one of their key criteria:

• Cost reimbursement payments paid to our affiliate AEIS to support cost reimbursement services

So you are not getting low cost funds, and you are paying the CFP fees. If you do this yourself, the fees saved can be huge over a 3 decade investing career, as in a large 6-figure amount.

But just the same, you have to be able to control your emotions and stick to a plan when the financial markets are in turmoil. That is a common place where DIY investors can get in trouble. Having a written financial plan that you will commit to through thick and thin can help with this.

White.Beard.Doc, thank you!

Do these mutual fund selection criteria apply even for Independent Ameriprise advisors?

He says he's not forced to sell Ameriprise products. And doesn't receive commissions from the A, B, C, shares, IUL, etc. Or any compensation beyond AUM and financial planning fee.

"Our asset management strategies aren’t based on.... what will make a.... brokerage house the most money (we are one of the few firms where Financial Advisors don’t receive commission); they are based on the latest academic research, strict fundamental analysis, and the timeless principles in Behavioral Finance. Investment Management is what most big Wall Street banks companies promote, because they have proprietary products they are trying to sell (e.g. mutual funds, ETFs, annuities, insurance, mortgages, credit cards, etc). The financial advisors at these firms are almost always employees of the bank or insurance company, and are incentivized to sell these proprietary products to clients- they have sales quotas. From the very beginning, clients have told us they want something different- something better- and this has driven us to design the investment management process we have today, which is fee based. Perhaps best of all, because we're independent- meaning we're not employed by a big Wall Street bank or insurance company- we don't have to push certain products over others."

[Tortoise]

White.Beard.Doc, thank you!

Do these mutual fund selection criteria apply even for Independent Ameriprise advisors?

He says he's not forced to sell Ameriprise products. And doesn't receive commissions from the A, B, C, shares, IUL, etc. Or any compensation beyond AUM and financial planning fee.

"Our asset management strategies aren’t based on.... what will make a.... brokerage house the most money (we are one of the few firms where Financial Advisors don’t receive commission); they are based on the latest academic research, strict fundamental analysis, and the timeless principles in Behavioral Finance. Investment Management is what most big Wall Street banks companies promote, because they have proprietary products they are trying to sell (e.g. mutual funds, ETFs, annuities, insurance, mortgages, credit cards, etc). The financial advisors at these firms are almost always employees of the bank or insurance company, and are incentivized to sell these proprietary products to clients- they have sales quotas. From the very beginning, clients have told us they want something different- something better- and this has driven us to design the investment management process we have today, which is fee based. Perhaps best of all, because we're independent- meaning we're not employed by a big Wall Street bank or insurance company- we don't have to push certain products over others."

Kamban, he denies (in writing with signature) vested interest or kickbacks. This is what has me confused.

[jfoxcpacfp]

My old fee-based advisor says execution is everything. And fee-only advisors can’t implement nearly as many of the action items of a financial plan on the behalf of clients.

What action items of a financial plan might a fee-only advisor be unable to execute (that a fee-based advisor could)?

An “advisor” is not a “financial planner”. Your “advisor” is almost certainly not qualified to handle the following, all of which you can expect from a fee-only financial planner:

• Budget analysis and ongoing review
• Risk analysis and advice
• Estate planning
• Tax planning
• Education planning
• Debt analysis (student loan, mortgage, etc)
• Preparation of financial plan with recommendations and ongoing monitoring, advice, and scenarios for ongoing changes

The only thing I suspect your “advisor” is capable of doing is investing your money in a portfolio, which is the easiest and least challenging part of what we do. I don’t believe you are working with a “fee-only” financial planner but a “fee-based” investment advisor. World of difference and extremely confusing since these “advisors” muddied the water with their creation of the description “fee-based” (hogwash).

[Kamban]

Kamban, he denies (in writing with signature) vested interest or kickbacks. This is what has me confused.

Who cares if he denies it or not or if he has his signature on it or not. Are you going to take legal action if you find our otherwise. He has Ameriprise legal might behind him. You have to shell out money to hire your attorney and still won't win the case.

You have countered our arguments with vague "he said so" statements. Why really can't you do a fee only approach. You still have not answered it. Otherwise this thread will meander with no end in sight.

[Tim]

Who cares if he denies it or not or if he has his signature on it or not. Are you going to take legal action if you find our otherwise. He has Ameriprise legal might behind him. You have to shell out money to hire your attorney and still won't win the case.

You have countered our arguments with vague "he said so" statements. Why really can't you do a fee based approach. You still have not answered it. Otherwise this thread will meander with no end in sight.

Independent can mean many things. Like "W-2" vs 1099.
Not a kickback, bonus income based on incentives achieved.
What could go wrong? Legal word salad.

[Antares]

Dude, your story sounds very much like the CFP I worked with from 2005 to 2012. I can assure you of one thing: on fees alone my portfolio is worth a lot more because I stopped paying him. It’s hard to do. You have an emotional investment in him. You are loyal. You are concerned for his feelings. You are going to have to put all that aside and recognize that only you can optimize your financial future. I am so glad I broke free of a guy I liked but was unwise to continue with.

[Tortoise]

Who cares if he denies it or not or if he has his signature on it or not. Are you going to take legal action if you find our otherwise. He has Ameriprise legal might behind him. You have to shell out money to hire your attorney and still won't win the case.

You have countered our arguments with vague "he said so" statements. Why really can't you do a fee only approach. You still have not answered it. Otherwise this thread will meander with no end in sight.

Kamban I transferred my accounts to Schwab 2 days ago. End in sight! After 3 years of debate and dissatisfaction, trying to make sense of contradictory statements/ actions, I've made much progress in 4 days on this thread. Thank you. Now fee only.