Post by Admin on Jul 27, 2024 11:28:40 GMT -5
Problem 1: Catch 22: If your investment knowledge is below average, you will not know if your FA (financial adviser) is good. If your investment knowledge is above average, you will not need one.
Problem 2: A FA is jack of all trades and a master of none. Anytime you need a real complicated advice, he/she can't answer it. Anything that related to taxes, you need to see a CPA, anything that relates to trusts, you must see an attorney.
Problem 3: A FA can't promise you any future performance or even risk-adjusted performance.
Problem 4: The highest commission vehicles for a FA are annuities or a guarantee of something. These are usually bad for the clients.
You probably heard a typical FA claim that they are fiduciaries. It is correct that fiduciary is better than not, but it doesn't guarantee much.
In theory, a FA puts their client interests first. In reality, it doesn't work that well.
This is how it should work for a typical person in typical situations. You seek a FA advice, a good FA should collect all your information, analyze it, and come up with exactly what to do in about 2-3 hours. They should charge you maybe $1000-1500. You can implement the plan for years to come, unless you have a major change. This means, you don't need the FA for years to come. In the event you have a major change and need advice, one hour of consultation should be enough; maybe another $300 fee.
Remember, any time your FA wants you to stay with them for years and collect his/her fee as a % of your portfolio, it is a bad choice. You should only pay them by the hour. You can find good fee only FA at www.garrettplanningnetwork.com/
If a FA followed the above, they would starve. This is why it would be very difficult to find a great, reliable, honest, low-fee FA that puts their client's interests first.
The best idea is to learn and get better. You spent at least 12 years in school; why can you not spend just 100 hours learning the basics?
Most people need to handle and manage their money for decades, why not educate yourself? It's not a brain surgery.
I also read many times I'm worried how my spouse can handle it. First, discuss everything with her. Second, encourage her to learn; after all, managing money is a lifelong process and commitment we all need. Third, leave detailed instructions about passwords, accounts, what funds to own, and more. See an example at fd1000.freeforums.net/thread/18/funds-wife-own-when
Problem 2: A FA is jack of all trades and a master of none. Anytime you need a real complicated advice, he/she can't answer it. Anything that related to taxes, you need to see a CPA, anything that relates to trusts, you must see an attorney.
Problem 3: A FA can't promise you any future performance or even risk-adjusted performance.
Problem 4: The highest commission vehicles for a FA are annuities or a guarantee of something. These are usually bad for the clients.
You probably heard a typical FA claim that they are fiduciaries. It is correct that fiduciary is better than not, but it doesn't guarantee much.
In theory, a FA puts their client interests first. In reality, it doesn't work that well.
This is how it should work for a typical person in typical situations. You seek a FA advice, a good FA should collect all your information, analyze it, and come up with exactly what to do in about 2-3 hours. They should charge you maybe $1000-1500. You can implement the plan for years to come, unless you have a major change. This means, you don't need the FA for years to come. In the event you have a major change and need advice, one hour of consultation should be enough; maybe another $300 fee.
Remember, any time your FA wants you to stay with them for years and collect his/her fee as a % of your portfolio, it is a bad choice. You should only pay them by the hour. You can find good fee only FA at www.garrettplanningnetwork.com/
If a FA followed the above, they would starve. This is why it would be very difficult to find a great, reliable, honest, low-fee FA that puts their client's interests first.
The best idea is to learn and get better. You spent at least 12 years in school; why can you not spend just 100 hours learning the basics?
Most people need to handle and manage their money for decades, why not educate yourself? It's not a brain surgery.
I also read many times I'm worried how my spouse can handle it. First, discuss everything with her. Second, encourage her to learn; after all, managing money is a lifelong process and commitment we all need. Third, leave detailed instructions about passwords, accounts, what funds to own, and more. See an example at fd1000.freeforums.net/thread/18/funds-wife-own-when