What kind of service/assistance do you recieve from your financial planner?
How did you find him/her?
What are your expectations of the service?
What is the fee structure? Is it worthwhile to use the service?

Any experience you would like to share will be very appreciated.

What kind of service/assistance do you recieve from your financial planner?

We (I was married at the time) were interviewed to determine our goals and financial preferences. The planner then came up with a (written) plan which recapped our current situation and made recommendations for how to achieve our financial goals. Her recommendations were somewhat generic (for instance, instead of saying "Invest in Acme's Pork Belly Futures Index Fund", she'd say "Consider investing in a mutual fund that concentrates on commodity futures"). She then followed up with us six months and a year later to see if we had questions or wanted additional advice.

How did you find him/her?

Given that this was B.C. (Before Computers and the Internet), we simply searched for fee-paid financial advisors and decided to go with what was Investor's Diversified Services (IDS) at the time (now Ameriprise).

What are your expectations of the service?

My expectations were that our goals would be evaluated in light of reality (that is, we were not going to double our money in ten years with absolutely no risk); that recommendations would not be specific to a financial firm (that is, no commission was paid by any firm to the advisor); and that the advisor would have sufficient knowledge of what-all was out there to determine appropriate investment vehicles for us (not to simply give us a graph telling us how to invest in the stock market if it made more sense for us to include some real estate, annuities, or whatever).

What is the fee structure? Is it worthwhile to use the service?

IIRC, the generic consultation and advice was a one-time fee. Additional advice (either to select investment vehicles or to address changing goals or life conditions) was charged for hourly.

Was it worthwhile? I think so. Many people simply do not understand investment principles -- or don't care to. Many people may not be aware of the breadth of opportunities out there. I happened to be interested in investing, so I pursued it myself. I mostly wanted confirmation that I was on the right track (and I got that). It was, for me, a "tune-up", if you will. It's a bit like having a professional housepainter review your DIY technique and assure you that you're not doing anything wrong and, in fact, are doing (most of) it right.

What kind of service/assistance do you recieve from your financial planner?
We receive advice/recommendations on asset allocation, how to structure our assets so as to maximize the odds of reaching our financial goals and periodic "checks" to see how we are progressing toward our goal (retirement).

How did you find him/her?
I asked around (friends and former co-workers) for recommendations. Also looked around on our own. Interviewed several until we found one we "clicked" with.

What are your expectations of the service?
First of all, I'm very involved with our financial planning. I have the time, inclination, and interest. However, DH seems more comfortable taking advice from a professional, so I've been able to get him to take a number of steps that he should have taken years ago (but he wouldn't listen to me) by asking the financial planner about it. For example, DH had a number of accounts (he wasn't even sure what they were worth) started 20+ years ago. He had stocks in different accounts. He had no idea of our net worth. Now everything is with one institution - IRA accounts and non IRA accounts. We get a summary statement as well as detailed individual statements so we know where we stand.
Anytime I feel we need to make a major financial decision, I can call him up and discuss it or arrange a meeting. He often asks questions we hadn't considered.

What is the fee structure?
His fee is 1% (annualy) of our account

Is it worthwhile to use the service?
For us it is. Your mileage may vary.

Any experience you would like to share will be very appreciated.
One small incident recently boosted my confidence in our guy. I asked him whether DH should take his retirment in a lump sum or in a lifetime pension (I fully expected him to say "take the lump sum - I can invest it for you"). He asked several questions and strongly suggested he take the lifetime pension.

Anyone uses a financial planner?

You bet... I've surrounded myself with them (but it's my industry anyway... and I have an "immersive" nature as well....)

What kind of service/assistance do you recieve from your financial planner?

There are many angles to financial planning... and although I know of firms that CAN offer something from every perspective, I have RARELY FOUND* a single individual who can effectively "step back" and look at the entire big picture and actually apply the various critical knowledge details to map out a full, comprehensive plan.

(*The ONLY exception being "fee only" professionals who are not compensated on transaction frequency or account sizes... but either hourly fees (no incentive against your best interests... but really no incentive FOR your best interests either,) or an annual percentage of your total Net Worth GROWTH (which means they win when/if you win, and get less, or nothing, if you do not win... little or no compensation for financially 'treading water.')

From a very HIGH LEVEL, GENERAL perspective, the areas that need to be coordinated and planned are;
A) Assets (this is what much of the industry solely focuses on,)

B) Risk Coverage (mostly done with insurance... which, unfortunately, is too rarely "planned" and too frequently "pushed." Everyone who is beyond being single, renting a shared room and earning minimum wage, needs SOME degree of protective coverage... The more you have (income, assets, dependents, etc.,) the more you need further levels of properly fit coverage... however, as with food "more is not necessarily better." Being properly custom FIT with coverage is the critical piece a planner needs to be able to do... and that changes (just like human bodies being fit for clothes) over time.

C) Safe Savings (and the avoidance of 'deadening' the family portfolio by putting TOO MUCH in 'safe' savings when it may be neither safe, nor properly earning what the family needs it to earn.)

D) LEVERAGE/DEBT Management. Eliminating 'naked debt' is critical... but too often confused with the use of 'tax-preferenced asset leverage.' Debts such as consumer credit generally reduce the family net worth and safety, while properly used tax-preferenced asset leverage (mortgages and business credit) generally increase family net worth and safety. The critical issue is how to know which is which, and how to treat them (which are polar opposites.)

E) Tax Planning. Waiting until it's time to do your tax returns before you pay attention to your tax details is analogous to going to a single aerobics class once a year and wondering why you can't catch your breath. Some people are comfortable (or willing to struggle) with the basic forms of tax returns once a year... but MOST people are confused & overwhelmed by the moving-target details of structuring your financial life so that you are "least bitten" by the tax wolves. Just the difference of keeping 10% more of what is yours every year (and having it work in compounding returns) is a HUGE piece in the puzzle of what you are left with at retirement... and having someone who lives, eats, and breathes (and stays sane) in the world of taxes and the IRS code changes is a critical support.

How did you find him/her?

A) I lurk (and participate) at various financial communities online (like this one... though I don't know any other planners here...)
B) I ask those I know (and am impressed by) for introductions to others THEY know in ancillary expertise fields.

What are your expectations of the service?

Someone who LOVES the corner of the industry they specialize in, and just devours the concepts on an ongoing basis. I seek "no b.s." sincerety and integrity... someone I COULD trust to toss my house-keys to if they were in town while I was away on vacation. Someone who has the same perspective on comprehensive and balanced planning... same ideas about life, and what "retirement" does and does not mean... and the ability to truly LISTEN, and if they do not understand, to ASK....

What is the fee structure? Is it worthwhile to use the service?

Above are my perspectives on BEST fee structures. Since I have no single "captain" (but reserve that hat for myself) I have different incremental arrangements with the players on my 'financial support board.' For anyone desiring to NOT wear the "captain's hat" I would recommend SELECTING a 'captain' (or "lead advisor") with the idea that they will NOT be relied on to be the "one size fits all specialist" (which is simply unrealistic) but rather the "quarterback" for the professional team YOU OWN who are all facing the same goalposts that you are, and win when you win.

Is it worthwhile?
If you choose your professionals carefully, and stay in regular contact so THEY know they are taking you where you want to go... DEFINITELY!

Cheers,
Dave Donhoff
Strategic Equity & Mortgage Planner

If you deal with a person who's really a salesperson, expect that person's recommendations to be slanted toward the stuff that s/he sells, usually a limited number of items, among a wide variety of financial goods available.

Many say that they'd like unbiased advice, but are reluctant to pay for it.

If you buy mutual funds, the Management Expense Ratio will eat up a fair percentage of the annual growth (if there is any - but even if there isn't, the fund manager gets his/her regular percentage of the asset, in any case).

Few of them can outproduce the market averages, over the long term. Part of the reason being that annual percentage that they get paid.

Learn how to invest and buy stocks on your own - that way, you can pocket the management fee (if you become smart enough to have your asset grow as well as the fund manager did).

Learning how money works - an interesting hobby, if it interests you. That pays well.

In Canada, the money management magazine that I figure to be the best carries no ads, is totally subscriber-driven. When they asked for advice, subscribers asked for seminars with the people who write the articles, and for subscribers in an area to get together.

Such a group in our city has been meeting monthly (year-round, as money works 24/7/12) for over 10 years, I've been attending for six or seven, and have learned a lot, as there are a variety of approaches taken by the 20 or so usual attendees.

A quotation heard there is, "Losses in investing is the tuition fee for learning how money works".

Good wishes as you pursue your financial (and other worthwhile) goals.

ole joyful ... over 20 years a personal financial advisor, most of them selling no financial stuff

P.S. If you check back through the "Money Saving Tips" and "Household Finance" forums, you'll find a number of messages that I've posted on the subject, which you might find of interest.

o j

After the free year, the tab was 1% of the portfolio managed.

I think this can be a good idea, but it wasn't cost effective for us, with a very conservative portfolio and little "balancing" needed. Once you've built your bridge of T-notes, CDs or whatever and have a few mutual funds of various ilks, exactly what is the advisor doing besides sending you a statement every month and telling you how wisely you and he are handling things? It just wasn't appropriate in our case -- although I think it can be excellent for younger, more aggressive portfolios.

Thank goodness we did liquidate what we did, when we did. Saved losing a third on the crash five years ago. Just lucky. The remaining portfolio has only caught up in the last two years, whereas the portion we invested in the house and the condo has skyrocketed. And, we are *enjoying* them!

Chisue where all is your place in Maui, we bought a big lot up on a hill but I'm not quite sure where it is?

His fee is under 1% of the portfolio he oversees. We meet with him quarterly now. In the time we've worked with him he has come to understand that we are informed and politically aware. We are patient, dedicated investors, not interested in huge returns. We live below our means and don't carry debt.

We are "worker bees", the helpmeet and I. When we're finished at work our idea of a pleasant leisure time activity is not poring over financials or hunting up value stocks. I'd rather take the dog outdoors, work in the garden, strip furniture, or go sailing.

He has been very helpful for us; for precisely the same reason that Zone 8grandma gave. The helpmeet and I have very different feelings about money; he is much more secure about having it and spending it than I am. But I am the patient, methodical investor who tends to regard contributions to investment funds as "bills", something that MUST be paid. Our planner was instrumental in directing us to pull into the "yoke" together and then patiently explaining how our diligence has paid off over time.

We've been visiting Hawaii for years and had stayed the prior February at MK, so knew it was good for us. Bought sight-unseen. The seller was willing to do all the grunt work of gutting and refurbishing for us. Closed Feb. 1 and "moved in" for the month.

It's in a rental pool with an agency, but I do most of the bookings via vrbo.com. Look us up! We're #8049. The condo has more than doubled in price, although who knows what 2007 will bring. It carries itself with the rentals and has been much easier to manage than any SFH we owned and rented out. We no longer fret over where we can rent in the winter; have a "free" Maui home; tax benefits are good, too.

I'd love to know where on Maui your "hill" is located. Do you get out there often? Plan to build? South Maui or West?

chelone -- Glad you are both happy building up your security. We did the same, but it got to a point when I said, "Why aren't we enjoying some of this portfolio in our daily lives?" Not that we *squandered* anything, but we were living far below our means, and for what? Our retirement is as secure as we can make it, so enough already! Maybe it's a Senior thing...time's a-wastin'! LOL

Our day will come... and we'll have everything... we'll share the joys...

;)

For now I think I'm doing okay on my own - no debt other than a second home, plenty of short term liquid funds, and investing alot in aggressive investments for retirement time horizon which is about 17 years away. As I get closer to retirement I think I will need a little more advice on asset allocation - but maybe by then I'll take the time to learn more about this and figure it out myself.

At the investment time-wise of just a few hours - per year.

The mutual fund managers get paid, whether you make anything or not.

Good wishes for developing into a skilled manager of income and assets - and for correlating your family's attitudes about money, if they are somewhat divergent currently.

ole joyful

Both DH and I are not experts, but we are financial literate and understand risks associated with different kind of investments. We have been saving and investing since our first jobs and have built two portfolios that reflect our own investing styles. Our problem is lacking of time. For several years, not spending enough time on the investments has resulted lackluster returns, a pile of idle cash, poor tax and estate planning, thus we are considering enlisting the help from a financial planner.

Your feedbacks opened our eyes and gave us options to consider. In the meantime, we are examining our own financial situation to determine such as what level of assistance we need in which areas, how much control we would feel comfortable to delinquent, and how we want to integrate portfolios that fit big picture but also satisfy our individual investing style.

Again, thank you so much for the inputs.