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I need help on how to assist my sister-in-law with regard to investing. She is a single 35 year old pharmacist. Aside from her 401k she has not invested anything else. No Roth IRA. No taxable account. When this came to my attention I was alarmed as she has a good income for 10 years now and has most of her savings in cash. She has her house and car paid off.
She has absolutely no interest in DIY investing. She is a very smart individual, but admittedly ignorant about investing and is at high risk for getting taken advantage of by a financial advisor. Here were the first few attempts:
1. chase bank— she met with financial advisor who was going to “cut her a deal” on AUM fees from 2% to 1.5% per annum. I told her to not go back.
2. local advisor she sought out— this person was touted as the best one to help young females starting out with investments. My sister-in-law showed me the proposed initial investment of about $35,000 split up into three funds. One fund was energy sector with frontload of 5%. The second fund was a municipal bond fund also with a front load. The last one was a blended equity and bond fund, again with a front load. This “financial advisor“ stood to make $1500 after that meeting for providing absolutely terrible advice. No financial plan was actually offered.
I am telling her that she needs to either learn her self and do something very simple, or get a financial advisor that actually creates a plan with her before investing. if I can convince her to learn enough and/or help her to DIY it, would it be reasonable to steer her towards a Vanguard life strategy fund? I know the expense ratio is higher and it is not perfect, but for a one stop shop/set it and forget it approach for the situation, I thought it might be a good fit. I have read multiple blog posts about this, but wanted to hear from others about their thoughts. I understand that she still will need an overarching financial plan, but as far as investing strategy goes, I thought this would be a good fit.
She has absolutely no interest in DIY investing. She is a very smart individual, but admittedly ignorant about investing and is at high risk for getting taken advantage of by a financial advisor. Here were the first few attempts:
1. chase bank— she met with financial advisor who was going to “cut her a deal” on AUM fees from 2% to 1.5% per annum. I told her to not go back.
2. local advisor she sought out— this person was touted as the best one to help young females starting out with investments. My sister-in-law showed me the proposed initial investment of about $35,000 split up into three funds. One fund was energy sector with frontload of 5%. The second fund was a municipal bond fund also with a front load. The last one was a blended equity and bond fund, again with a front load. This “financial advisor“ stood to make $1500 after that meeting for providing absolutely terrible advice. No financial plan was actually offered.
I am telling her that she needs to either learn her self and do something very simple, or get a financial advisor that actually creates a plan with her before investing. if I can convince her to learn enough and/or help her to DIY it, would it be reasonable to steer her towards a Vanguard life strategy fund? I know the expense ratio is higher and it is not perfect, but for a one stop shop/set it and forget it approach for the situation, I thought it might be a good fit. I have read multiple blog posts about this, but wanted to hear from others about their thoughts. I understand that she still will need an overarching financial plan, but as far as investing strategy goes, I thought this would be a good fit.
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