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  • Financial Advisor

    My father, (a physician, now deceased) and his partners, used “Company x” as their Fiduciary planner. This company was a fee only Fiduciary planner. After graduate school, (when I began to make my own income) my husband and I also used this company for financial planning. Over the years, this company has merged into “company Y”.

     

    It seems that so many members here on the White Coat Team are using Vanguard for their investing needs. I sometimes worry  that my planner is too small of an outfit. Our returns are okay but of course we pay fees. I was always taught that you should use a company that makes their money from a flat rate (percentage) fee.

     

    How do I know if I should stay with my current outfit, or move on? Before you state the obvious....check my annaul rate of return, I do and my planner is always there to answer my questions. When I read the Vanguard asset allocations here for individuals who have with a similar situation as mine and I think that their strategies assume more risk. But I can’t always translate that to my planner. Is it apples and oranges? I mean can you find options in your company’s assets that are similar to those (funds) of Vanguard?

     

    So, my questions are:

    1.How do I know if I should stay with my current outfit, or move on?

    2. Are the majority of folks here using a fee only fiduciary planner?

    3. Would it be alright to list my asset allocation here for review? (I’ve seen others do it before, but it was only for Vanguard funds...) So may I list my assets allocation (ie stocks/bonds/REIT/cash) as well as our ages and incomes?

    4. Is it okay to name my fiduciary planner? Or can I check them out some other way?

    5. Do most people who have Vanguard work with one of their planners, or do they do the asset allocations themselves?

    6. How do specific Vanguard funds (ie the Vanguard Wellington Fund) translate in other companies?

     

    I apologize for the length of this post, but recently there have been a few other lengthy threads, so it must be that time of year!

    Thank you in advance...and I apologize my ignorance.

     

  • #2
    1. Ask yourself if the FA is providing you good advice, value, and service. Only you will be able to judge.

    2. Based on my observation, the majority here are DIYers, but those that use an advisor probably use fee only.

    3. Yes, lots do it. I personally find these tedious, but other regulars engage on these posts.

    4. Yes and probably.

    5. A majority of the people who use Vanguard are probably DIYers, but perhaps some use an advisor or even Vanguard’s own advisory service.

    6. They compare, generally, by providing a similar function at a lower cost.

    Comment


    • #3
      post it!

      you need to have confidence in your FA.  if you don’t it’s not going to work.  you can certainly check their work, so to speak.

      i have a AUM advisor, and we disagree occasionally on points, but ultimately he does what i tell him to do.  this is in the context of a plan made decades ago, and yes i have revised it a few times over the years as i came to understand my goals better.  i am for sure in the minority here

      i also have vanguard funds and manage these myself.  i have an actively managed section as well.  i’m generally trying to figure out whether the advisor is able to beat the returns, during either good or bad times.  but i try to think about money as absolutely little as possible and i don’t have any idea where the stock market is going, which is another reason i keep the advisor.   they tell me when to consider tax lost harvest opportunities.  it does make the actively managed part interesting, but i have a super long term view of these things so in my mind at least, i’m still safe.  i have automatic sells in place.

      vanguard has offered planner to review things.  i think they have platinum service or something.  if you exceed a certain amount with them, they offer you this.  i believe they also have internal planners that you can hire if you so choose.

      glad you are starting to ask questions!

      hopefully, you can settle the many swirling issues (that I perceive) around you.  my 5cent suggestion is that if the returns have been reasonable, you focus on your job first.  my thoughts are that you are severely underpaid.  the best financial option for you would be to fix that situation first, you will really make significant progress on your road to FI.  assuming that your FA is doing an adequate job, the returns on tweaking investment strategies are likely to take some time to be realized.

      good luck!

       

      Comment


      • #4
        When I joined my group 2 decades ago, each doc had his own financial advisor to manage their 401k. Some were commission based and others were aum. I dropped my FA after 6 months when he bought a stock and then sold it within 2 months inspite of my telling him I want to buy and hold. Since then I have managed my own tax deferred and taxable accounts. Most of the money is invested in SPY, DIA and QQQ, BND and VWITX. It’s worked well for me. At today’s rate, I would be paying the FA close to 100k a year in AUM fees. For what?

        But they are very smart and it’s tough to get out once you’re in their grasp. They will buy instruments that ‘need to be held for 3 years’ and stuff like that. When I wanted to give my farmland to a different guy to farm, the current guy came up with ‘I just spent a ton of money on lime last year and it’s good for 3 years’. When you want to get a renter out of your rented house, they come up with ‘I just painted the inside of the house last year’. That’s how the FA will try to hold on to your account. Even when you know you could be doing better with just 2-3 funds.

        Comment


        • #5
          Well, thank you all very much for the your guidance and for your assistance.

          -Vagabond, thanks for your replies. I’m actually grateful that my FA knows when to listen to me, and when to ignore me. A few years back I had my heart set in investing in Theranos....???? good grief.

          Thanks for all that you wrote. I will put together my asset allocation and post that info with the name of the FA that we use.

          -Q-school, what you wrote is exactly how I feel...

          “i also have vanguard funds and manage these myself. i have an actively managed section as well. i’m generally trying to figure out whether the advisor is able to beat the returns, during either good or bad times. but i try to think about money as absolutely little as possible and i don’t have any idea where the stock market is going, which is another reason i keep the advisor. they tell me when to consider tax lost harvest opportunities. it does make the actively managed part interesting, but i have a super long term view of these things so in my mind at least, i’m still safe. i have automatic sells in place.”

          But you’re saying a lot of money by the DIY with the Vanguard funds.

          yes, you’re right, my husband and I have so much on the front burner right now. I just want for him to be happy and not to burn out or a few more years...

          -Wisco-

          It’s amazing how much money you’ve saved by not paying those AUM fees. My FP takes a flat percent rate.

          I need to gather my data and I’ll be back to get your input.

          Thank you all...

          Comment


          • #6
            OP,

            Though I get no commission for saying so, consider buying the WCI course or some introductory texts on investing like the ones by the bogleheads folks. This will help you to see the investing rationale of many on this forum.

            Then, even if you decide to continue with a financial planner, you will be a better informed investor which will be invaluable as you progress throughout your financial career.

            Participants on this forum are generally willing to help with specific financial questions, but having a firm understanding for the why behind these recommendations will be every bit if not more valuable than the recommendations themselves.

             

            Comment


            • #7
              Great idea. I had been thinking about buying the course for the last six months or so.

              PS...”OP”?

              Comment


              • #8
                original poster

                Comment


                • #9




                  Well, thank you all very much for the your guidance and for your assistance.

                  -Vagabond, thanks for your replies. I’m actually grateful that my FA knows when to listen to me, and when to ignore me. A few years back I had my heart set in investing in Theranos….???? good grief.

                  Thanks for all that you wrote. I will put together my asset allocation and post that info with the name of the FA that we use.

                  -Q-school, what you wrote is exactly how I feel…

                  “i also have vanguard funds and manage these myself. i have an actively managed section as well. i’m generally trying to figure out whether the advisor is able to beat the returns, during either good or bad times. but i try to think about money as absolutely little as possible and i don’t have any idea where the stock market is going, which is another reason i keep the advisor. they tell me when to consider tax lost harvest opportunities. it does make the actively managed part interesting, but i have a super long term view of these things so in my mind at least, i’m still safe. i have automatic sells in place.”

                  But you’re saying a lot of money by the DIY with the Vanguard funds.

                  yes, you’re right, my husband and I have so much on the front burner right now. I just want for him to be happy and not to burn out or a few more years…

                  -Wisco-

                  It’s amazing how much money you’ve saved by not paying those AUM fees. My FP takes a flat percent rate.

                  I need to gather my data and I’ll be back to get your input.

                  Thank you all…
                  Click to expand...


                  i want to expand on one part of your response to my comment.  i may be saving money with DIY but it is possible i am losing by missing other opportunities.  i may not be rebalancing optimally.  i get lazy sometimes and don't check on things for a couple months.  i think you are contemplating how to be most efficient with your money.  ultimately we are unfair in that we judge the results by the outcome.   i have not found that the kind of 'best practice' you are looking for is going to 100% return the best results regardless of the interval chosen.  iow, the system is not perfect.  i think you have to commit to trusting that you picked the best system you could.  i would also comment that i'm way older than you and believe i have more mistakes under my belt.

                   

                  even though i limit my commitment to my FA, he is still my most expensive 'cost' annually (except taxes and charity if you count that).  but i trust him and i don't want to spend more time monitoring the system we have in place.  if anything happens to me, my wife who doesn't care to know anything at all, will likely wind up giving him more and more, but the insurance money will ensure that the family is okay financially regardless.   we don't know what we don't know, and sometimes having someone else monitor what will eventually if not already be 8 figure estates may not be 'cost' as much as benefit.  i get that it is hard for you to imagine having an 8 figure estate right now.

                  having said that, i am 100% confident that you still are in full control of your financial destiny.  you get to pick the path you want.  you can stay the same.  you can renegotiate with current employer (nighttime ED doc is in demand in virtually any hospital in the country) you can change jobs.   i'm fairly confident you know that there are plenty of jobs where income could be doubled working the same number of nighttime shifts.  so you can be <10 years from true FI.  then he can cut back or retire as he chooses.  100% confident that you can manage your investments successfully if you choose to ditch the FA.  you guys are smart.  control/choose your destiny, don't feel that you don't have control.  you do.  apologies if i'm reading too much despair in your posts.  feel free to disregard anything that doesn't apply 

                  best of luck.

                  sometimes you just have to decide and move forwards and make adjustments over time. 

                  i promise if you separate from your FA and want to go back, they will still take you.

                  Comment


                  • #10


                    you can renegotiate with current employer (nighttime ED doc is in demand in virtually any hospital in the country) you can change jobs.   i’m fairly confident you know that there are plenty of jobs where income could be doubled working the same number of nighttime shifts.
                    Click to expand...


                    Thank you so much for your supportive and sage comments. I wish you knew how meaningful there are, especially to a spouse. I feel like life is flying by, and we’re miserable and spinning our wheels.

                    It’s such a daunting task to begin to research new positions, but no matter what, we have to change something.

                    Again, thank you.

                    Comment


                    • #11
                      In terms of a fee schedule we were grandfathered into this financial investment firm at a rate of a 1% fee of the first $500,000 and then 0.75% for the rest of the money.  Normally their fee schedule is 1% for the first three million.

                       

                      All of the money is these four accounts is allocated the same way: 35% bonds and 65% stocks.

                       

                      Beneficiary IRA, Joint Account, SEP IRA, Traditional IRA

                      our risk is considered to be moderate.

                      Rate of return for last year was 8.3%

                      I’d love to know if we are assuming enough risk at ages 48.

                      Thanks

                      Comment


                      • #12
                        Rate of return for 2017 was 8.3%?  That's pretty lousy.  A 65% TSM and 35% bond portfolio should have earned about 15% last year.  I think 65/35 is fine, though I would consider adding international if you don't have it already.
                        “Work” is a four letter word for good reason.

                        Comment


                        • #13


                          I was always taught that you should use a company that makes their money from a flat rate (percentage) fee.
                          Click to expand...


                          I am a little confused here.

                          A flat fee is a flat fee - say $200/ hour or $1000 to meet / review twice a year or $5000 to guide throughout the year. Does not matter if it is $1M or $10M in investments.

                          I am not sure what percentage in a flat rate fee setting means. That automatically becomes % of AUM, which is not what I would advise.

                          Comment


                          • #14




                            My father, (a physician, now deceased) and his partners, used “Company x” as their Fiduciary planner. This company was a fee only Fiduciary planner. After graduate school, (when I began to make my own income) my husband and I also used this company for financial planning. Over the years, this company has merged into “company Y”.

                             

                            It seems that so many members here on the White Coat Team are using Vanguard for their investing needs. I sometimes worry  that my planner is too small of an outfit. Our returns are okay but of course we pay fees. I was always taught that you should use a company that makes their money from a flat rate (percentage) fee.

                             

                            How do I know if I should stay with my current outfit, or move on? Before you state the obvious….check my annaul rate of return, I do and my planner is always there to answer my questions. When I read the Vanguard asset allocations here for individuals who have with a similar situation as mine and I think that their strategies assume more risk. But I can’t always translate that to my planner. Is it apples and oranges? I mean can you find options in your company’s assets that are similar to those (funds) of Vanguard?

                             

                            So, my questions are:

                            1.How do I know if I should stay with my current outfit, or move on?

                            2. Are the majority of folks here using a fee only fiduciary planner?

                            3. Would it be alright to list my asset allocation here for review? (I’ve seen others do it before, but it was only for Vanguard funds…) So may I list my assets allocation (ie stocks/bonds/REIT/cash) as well as our ages and incomes?

                            4. Is it okay to name my fiduciary planner? Or can I check them out some other way?

                            5. Do most people who have Vanguard work with one of their planners, or do they do the asset allocations themselves?

                            6. How do specific Vanguard funds (ie the Vanguard Wellington Fund) translate in other companies?

                             

                            I apologize for the length of this post, but recently there have been a few other lengthy threads, so it must be that time of year!

                            Thank you in advance…and I apologize my ignorance.

                             
                            Click to expand...


                            1. Do you need and want an advisor? If so, then your question is this advisor or another one. If not, then your question is when and how do you manage it yourself. All three options are fine and it depends mostly on you and your interest and ability. I hate to be selling, but you seem a good candidate for the online course. And if it isn't worth your money, it has a 7 day money back guarantee. It's a whole lot cheaper than your advisor.

                            2. No. Most forum posters are DIY investors. But most docs use an advisor.

                            3. Yes. This is a great place to get a second opinion. By posting what your advisor is recommending you do, it may become very obvious very quickly that your advisor is a doofus. And if not, at least you know you're getting good advice for what you're paying (which is slightly less than the going rate, but nowhere near the cheapest option out there.).

                            4. Yes. But when discussing specific individuals and firms it is critical to avoid libel- stick to facts and clearly identify your opinions.

                            5. Most are DIYers.

                            6. You can compare one fund to another using the Morningstar x-ray tool.

                            https://www.whitecoatinvestor.com/understand-what-you-own/

                            No reason to apologize for ignorance. If you stick around here for long, you'll quickly be far less ignorant than most docs.
                            Helping those who wear the white coat get a fair shake on Wall Street since 2011

                            Comment


                            • #15







                              I was always taught that you should use a company that makes their money from a flat rate (percentage) fee.
                              Click to expand…


                              I am a little confused here.

                              A flat fee is a flat fee – say $200/ hour or $1000 to meet / review twice a year or $5000 to guide throughout the year. Does not matter if it is $1M or $10M in investments.

                              I am not sure what percentage in a flat rate fee setting means. That automatically becomes % of AUM, which is not what I would advise.
                              Click to expand...


                              I have heard several advisors say it like that knowing that people latch onto the buzzwords. It was really interesting after a talk I gave at my society meeting that an insurance "wealth advisor" type got up and someone asked if they were a flat fee and they skirted around with a yes our fee is x% type rate, "fee only"...ugh, just awful, I wanted to run back up on stage and give the audience an "actually,".

                              Comment

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