Finity Group: experiences? Debating second opinion

[mianesmd]

I apologize if this has been asked before but I couldn’t seem to get into the previous posts about this group. We’ve been working with Finity Group remotely (they’re across the country) for around 6 years after we got “persuaded” with their free advice during training (we were very financially illiterate at the time). It seems like from some people that they are viewed as commissioned salesmen and not real advisors. Having said that, they helped my wife and I get disability and life insurance (I think pretty good policies now that I know a lot more), encouraged us to start our Roth IRAs, walked us through all our retirement accounts and encouraged us to max them out, helped me refinance my loans and also recently told me to start a taxable account. They also helped us with our investment allocations which seem pretty reasonable. When I started reading WCI a couple months ago I realized we were doing everything we were “supposed to be doing” and it was because of this group. I think we’d be a lot more behind and confused if we didn’t use them. So that’s the good stuff.

My reservation is that the new advisor I’ve been working with for the last year seems young (like in his 20’s), and he told me a couple things that I wasn’t sure were correct based on WCI reading. Our investment assets are between $200-300k right now and they are charging $1800 for this year, which includes a quarterly meeting and unlimited email/phone contact. I currently manage all of my assets myself (which is how I want it). If I want a similar level of advice and a “financial check up” of sorts by a more seasoned advisor, is it worth pursuing? It seems like we might pay a lot more for a “real advisor” based on those recommended by WCI...

 

[VagabondMD]

I know nothing about the firm. $1800/year for that level of service seems reasonable, assuming that you are indeed getting good advice and service. If you do not feel like you are a good match for your assigned advisor, you could request another one.

Paraphrasing Phil DeMuth:

”A financial advisor is a guy (usually) that ends up in your lap, and once he is there, it is often difficult to get him off your lap.”

[ajm184]

The amount you are paying appears reasonable at between 60 and 90 bps.  The pricing is known which imo is a huge issue for the financial advisory industry in general.

Please articulate what this financial adviser stated that you feel contradicts WCI?  There is a big difference between a difference of opinion/approach for your situation and downright 'bad' advice.

Your point about your new financial adviser being young I found somewhat amusing.  Being young should not be a dis-qualifier though.  You were also young.  Though not disqualifying question, it would be useful to understand if your adviser has or is in pursuit of their CFP or CFA.

I recall when my wife started in practice, patients would be like 'you look as old as my son/daughter/grandson/granddaughter', didn't mean she was not a competent physician and she had a piece of lambskin saying she was qualified.  IMO, if I had a financial adviser, I would greatly prefer having one who was 8 to 12 years younger as they would be in position to provide you and your family service potentially into retirement.  There are reasons that you and this adviser may not be a good match.  If you feel that is the case; be upfront with them (person/company) and ask for someone else that would be a more appropriate match.  The company will want to retain your business, and they appear to have a number of choices, especially given it is remote.

 

[mianesmd]

Thanks for the replies. I don't think my adviser gave "bad" advice at all, but he was encouraging me to contribute less to my 457b and move that money into starting a taxable account. I had just finished listening to a WCI podcast about maxing out all tax-advantaged accounts before ever doing that (we're in the highest tax bracket) so it just seemed like the wrong advice. I have since started a taxable account while still maxing everything out btw

As far as him being young, it doesn't necessarily bother me and he might even be more willing to help and be up to speed with changes given this fact. In the WCI podcast he just recommends having whoever helps manage your money be someone with a little "grey hair on their head"; someone who has money and has invested a little invested themselves. I like the idea of staying with the same person for years though, once they get to know your family and life situation it becomes somewhat personal.

[djohnflatfeecfp]

I think your reaction to contributing less to your 457b to put it into a taxable account is correct.

 

The question I think you need to answer is along the lines of since you like to manage your own stuff, is paying $1,800 a year worth it for a quarterly meeting and for them to "be on call?"  It sounds to me like you have the foundation set up and I am not sure what all you would be covering quarterly.  However, there could be a great deal of value they are providing with that check-in every three months.

 

I will say Finity Group is one of my best referral sources, they just don't know it.  A few of my physician clients have come my way after some experiences with this group that left them wanting.

[cgossage]

If their fees are priced as a % of AUM, they could be encouraging you to stay away from investing in your 457(b) so that they will be able to manage more assets.  Hopefully that isn't the case.  457(b) plans can be less attractive since the assets are still subject to your employer's creditors and you can't roll a 457(b) into an IRA after you leave, so perhaps your advisor may be concerned about the financial well-being of your employer.  If so, he probably should have expressed his reasoning behind this recommendation to you.  Perhaps you can ask what his thinking was.

I'm a little hesitant to say someone looks too young.  As a 38 year old with a baby face, others often mistake my age for much younger.  I would verify your advisor's experience, credentials and certifications and make sure it matches your expectations.  If he is in his 20's, that is probably too green without a more experienced advisor supervising him.