Here's the disclaimer, I don't know nothing about using a financial advisor, I don't know what to look for in one, besides getting one that is a fiduciary. Is there a site that rates them, on their performance, fees, et? I want them to maybe manage my 401K. I have been listening to one called American Wealth Advisors. Her fee is 1.2% of the total amount of 401K at the end of the year, I think. What do you you investors say?
Thinking about getting a financial advisor...
- Thread starter daves66nova
- Start date
- Joined
- Jun 22, 2022
- Messages
- 1,011
For 401k... most 401k administrators will have a target fund for your retirement date. Let's say you plan to retire in 2040, they will have a fund like that. It starts with a high equity mix and then slowly morphs into high bond mix.
Imagine you have $100k 401k balance. You will pay $1,200 in fees that year. Then the balance drops to $80k. You will pay $960 in fees that year. There are already many hands in your 401k pocket drawing fees. You don't need one more.
Imagine you have $100k 401k balance. You will pay $1,200 in fees that year. Then the balance drops to $80k. You will pay $960 in fees that year. There are already many hands in your 401k pocket drawing fees. You don't need one more.
I can tell you that you're going to be disappointed after about 3 years. You'll see that after 3-4 years, they money you've turned over to them to manage has grown about 5-6% at most.
We made the decision to turn our 401k roll-overs/IRA money over to a FA / Fiduciary to manage to take the stress off of us and hopefully grow the money into much more than we could ever do by ourselves. After 3 years, I decided to take a quick look and see that we had about 9% more in our account than what we gave him 3-1/2 years prior. Mind you, this was after a 19% gain in 2020, not sure about 2021, but the stock market was basically off the charts good in 2021, yes, I know it was down 20-22% in 2022, but the first six months of 2023 were up about 25% in most sectors.
His fee is 1.7%.
I started making appointments at other locally-owned/managed firms, no store-front chain/franchises you see ads for on Sunday football and golf matches. I went to three appointments, made it extremely clear that I was one P***ED off individual and I don't accept 5-7% growth when I'm paying someone to manage it. Here's what I learned:
1. All of these money-managers, Financial Advisors, fiduciaries are used to dealing with fairly wealthy people, much, much older than my wife and I and not used to having demanding clients with high expectations.
2. All of them spend a lot of time baby-sitting wealthy individual's money, baby-sitting their kids and grandkids, doling out money to them from trust funds or accounts on a monthly basis and managing how much of their parents and grandparents money they are allowed to get each month.
3. All of them seem to be perfectly good with making 5-6% average over 36 months for their clients, while taking that 1.3-1.7% commission (per year, divided monthly based on account balance). You'd think these people would want to grow your account like crazy because it benefits them even more.
That's not what they are after. They are more satisfied with 2-3 new clients coming in the door each month with $2-5M to manage, which brings them in another $4-5k per month in revenue without basically lifting a finger.
Most all of these people put everyone's money into the same stocks, funds, bonds, that they either have algorithms for or they buy lists from others.
I have kept an old 401k in my previous employer's group the last year. The first 6 months of 2023, I was up 20.4% on my account there, with my money in 9 mutual funds. The worst yield was 9%, the best were 5 funds doing 26-30% during the 1st two quarters of 2023. Our money at the fiduciary did about 4%....
Here's my advice - look over the last 20 years of the growth stock mutual funds at American Century. You'll see that they have done about 12-15% over a 20 year period. That's huge. You're not getting that at a FA/ Fiduciary.
If you're looking for advice on how you can invest and do other things with money other than stocks/mutual funds/bonds, just start paying attention to other things. There's a ton of stuff out there. Don't jump in immediately. There's crowd funding for real estate, there's a ton of things.
We made the decision to turn our 401k roll-overs/IRA money over to a FA / Fiduciary to manage to take the stress off of us and hopefully grow the money into much more than we could ever do by ourselves. After 3 years, I decided to take a quick look and see that we had about 9% more in our account than what we gave him 3-1/2 years prior. Mind you, this was after a 19% gain in 2020, not sure about 2021, but the stock market was basically off the charts good in 2021, yes, I know it was down 20-22% in 2022, but the first six months of 2023 were up about 25% in most sectors.
His fee is 1.7%.
I started making appointments at other locally-owned/managed firms, no store-front chain/franchises you see ads for on Sunday football and golf matches. I went to three appointments, made it extremely clear that I was one P***ED off individual and I don't accept 5-7% growth when I'm paying someone to manage it. Here's what I learned:
1. All of these money-managers, Financial Advisors, fiduciaries are used to dealing with fairly wealthy people, much, much older than my wife and I and not used to having demanding clients with high expectations.
2. All of them spend a lot of time baby-sitting wealthy individual's money, baby-sitting their kids and grandkids, doling out money to them from trust funds or accounts on a monthly basis and managing how much of their parents and grandparents money they are allowed to get each month.
3. All of them seem to be perfectly good with making 5-6% average over 36 months for their clients, while taking that 1.3-1.7% commission (per year, divided monthly based on account balance). You'd think these people would want to grow your account like crazy because it benefits them even more.
That's not what they are after. They are more satisfied with 2-3 new clients coming in the door each month with $2-5M to manage, which brings them in another $4-5k per month in revenue without basically lifting a finger.
Most all of these people put everyone's money into the same stocks, funds, bonds, that they either have algorithms for or they buy lists from others.
I have kept an old 401k in my previous employer's group the last year. The first 6 months of 2023, I was up 20.4% on my account there, with my money in 9 mutual funds. The worst yield was 9%, the best were 5 funds doing 26-30% during the 1st two quarters of 2023. Our money at the fiduciary did about 4%....
Here's my advice - look over the last 20 years of the growth stock mutual funds at American Century. You'll see that they have done about 12-15% over a 20 year period. That's huge. You're not getting that at a FA/ Fiduciary.
If you're looking for advice on how you can invest and do other things with money other than stocks/mutual funds/bonds, just start paying attention to other things. There's a ton of stuff out there. Don't jump in immediately. There's crowd funding for real estate, there's a ton of things.
I have a friend who just got licensed to be one after taking the courses and writing the exams. Their main purpose is to keep you focused and make sure you understand what you need to comfortably retire, especially in the face of inflation. Do not depend on them to pick financial instruments, as they will will guide you towards the class of instruments, but generally cannot ever beat the market. And yes, they prefer talking with wealthy folks.
Been down this road over the past two years for my Wife.
Advisor fees are generally too high relative to returns.
You might get some advice here for 5 funds to invest in and set it and forget it. I just dumped EJ as they were not doing anything better than I was doing and I am only a VERY minor player.
Financial guys are not tax advisors. I would rather invest in a good accountant and use their advice.
The Fiduciary claim doesn't protect you from the firm taking advantage of your investment
You can kill yourself with tax in retirement if not careful. Fed and State Taxation is more critical than a point or two of annualized gain.
- If you are not retired yet, open a Roth and toss some money in there to get the 5Y clock ticking.
Advisor fees are generally too high relative to returns.
You might get some advice here for 5 funds to invest in and set it and forget it. I just dumped EJ as they were not doing anything better than I was doing and I am only a VERY minor player.
Financial guys are not tax advisors. I would rather invest in a good accountant and use their advice.
The Fiduciary claim doesn't protect you from the firm taking advantage of your investment
You can kill yourself with tax in retirement if not careful. Fed and State Taxation is more critical than a point or two of annualized gain.
- If you are not retired yet, open a Roth and toss some money in there to get the 5Y clock ticking.
Last edited:
I've been more tempted lately to get some sort of advisor, but still I can lose money just as well as they can!
My brother has LPL Financial. I have spoken with his advisor. Guy is sharp and conservative. Fee is 0.5%
Ima hold off
My brother has LPL Financial. I have spoken with his advisor. Guy is sharp and conservative. Fee is 0.5%
Ima hold off
- Joined
- Jul 28, 2023
- Messages
- 339
As my grandfather, father, and as I tell my kids, the best financial advisor will only ever be yourself if you put in the work to understand the system's of money and what you can do to prevent losing it. Its how my family has survived for centuries through various things like the communist revolution in russia, the polish ukranian wars, and 2 world wars, and still make it out alive and well. Granted many may call it luck, or divine intervention.
What I will say is that in the end, I never touched a 401k. My previous company provided a pension, which I can almost guarantee will not exist by the time I retire, as they are all insolvent. Same with 401ks and how many of my own family lost hundreds of thousands in 2008 through them, where as my money sat tight in things that are significantly more eternal (such as gold, silver, and so on).
Few things I learned over time is 1) Diversify 2) Do not trust banks 3) Do not trust the stock market 4) don't trust either side of an argument, and finally, 5) inverse Cramer law is real.
I trade the stock market STRICTLY on research and very predictable events and trends (for example, oil futures when you hear of a war coming). Certain things are almost a guarantee, but a gain, almost, and I take the responsibility when I lose. I trade crypto strictly as a very small long term investment (something like 20$ a month on average since the beginning of BTC so its not much, but its there).
I think the biggest reason I see people seeking advice on finance is because they too want to have those double digit % returns. Let me break it to you, they only exist if you either A) Get lucky or B) You truly believe stocks only go up. But you know what does exist? Cash money in times of crisis when you can gobble up everyone's stuff that they bought using credit. Happens every cycle. Everything goes down, people go broke, but you were smart and saved your money, and not in a bank, but under your mattress. Most wealth is made during a crisis and not when things are "going up" right at the peak of the bubble.
As my grandfather once said, I would rather have my money rot under my mattress than in a bank. Its going to rot anyway.
I have been lucky though. I started this little strategy where I would trade against everything Jim Cramer would say on TV and it works almost 100% of the time. Sometimes you just have to wait. Every time Cramer says BUY you short, if he says sell you buy. But again, YMMV.
TLDR: Stocks don't always go up, and double digit percentage returns are made when things are going really well for a long enough period of time. But you can't predict it and so you should do your due diligence and manage your own money. Depending on ANYONE is the greatest exposure in your life. Depending on BANKS to give you your money is delusion.
PS: anyone who tells you to buy an index fund today other than something like SQQQ is also...delusional, no offense, but we are at the peak of a bubble within another bubble...its that obvious. Heck, everyone was saying crypto is over and then BTC goes up 20% in a day. You tell me who is right.
What I will say is that in the end, I never touched a 401k. My previous company provided a pension, which I can almost guarantee will not exist by the time I retire, as they are all insolvent. Same with 401ks and how many of my own family lost hundreds of thousands in 2008 through them, where as my money sat tight in things that are significantly more eternal (such as gold, silver, and so on).
Few things I learned over time is 1) Diversify 2) Do not trust banks 3) Do not trust the stock market 4) don't trust either side of an argument, and finally, 5) inverse Cramer law is real.
I trade the stock market STRICTLY on research and very predictable events and trends (for example, oil futures when you hear of a war coming). Certain things are almost a guarantee, but a gain, almost, and I take the responsibility when I lose. I trade crypto strictly as a very small long term investment (something like 20$ a month on average since the beginning of BTC so its not much, but its there).
I think the biggest reason I see people seeking advice on finance is because they too want to have those double digit % returns. Let me break it to you, they only exist if you either A) Get lucky or B) You truly believe stocks only go up. But you know what does exist? Cash money in times of crisis when you can gobble up everyone's stuff that they bought using credit. Happens every cycle. Everything goes down, people go broke, but you were smart and saved your money, and not in a bank, but under your mattress. Most wealth is made during a crisis and not when things are "going up" right at the peak of the bubble.
As my grandfather once said, I would rather have my money rot under my mattress than in a bank. Its going to rot anyway.
I have been lucky though. I started this little strategy where I would trade against everything Jim Cramer would say on TV and it works almost 100% of the time. Sometimes you just have to wait. Every time Cramer says BUY you short, if he says sell you buy. But again, YMMV.
TLDR: Stocks don't always go up, and double digit percentage returns are made when things are going really well for a long enough period of time. But you can't predict it and so you should do your due diligence and manage your own money. Depending on ANYONE is the greatest exposure in your life. Depending on BANKS to give you your money is delusion.
PS: anyone who tells you to buy an index fund today other than something like SQQQ is also...delusional, no offense, but we are at the peak of a bubble within another bubble...its that obvious. Heck, everyone was saying crypto is over and then BTC goes up 20% in a day. You tell me who is right.
Company 401. Company matches up to 4%
I agree we are in a bubble but it likely won't pop until next year so i would still invest until the end of the year before withdrawing from the spectacle to likely come or shorting. I would not go into a 3x leveraged short nasdaq etf right now. You can expect indexes to still rise for the rest of this year from today. Sure we had a drawdown last week but that's typical. I wouldn't take that as trend yet.
I'm 54 1/2
This man right here speaks with so much knowledge.
TLDR above - do your own research and do NOT get snookered into sales pitch crap and stuff that is too good to be true. It's overwhelming, start putting 30 minutes a day into studying this stuff, in a month you will be so much more educated and it will be much easier to understand.
What it's also going to do is make you pay attention to things - things that "can't be discussed on this forum" because there's too many sissies today.
When he says to diversify, he means across investing. Stocks, funds, real estate, etc. All sorts of ways to make money.
Who is your 401K with? You can likely talk to someone in that firm. You are limited in a 401k but you DO NOT want to loose the company match. Are the 401K funds invested or just in a cash position? Most cash positions in this financial climate are doing O.K with good returns, near 5%
Again if you can it would be advantageous to direct at least a modest percentage of earning into a Roth 401K. Now is the time,
Again if you can it would be advantageous to direct at least a modest percentage of earning into a Roth 401K. Now is the time,
Why would you say that? Plenty of them are invested predominately in Index funds which is what most people should be investing in anyways.
I have to agree with the hillbilly on this one. Those target date funds have NO responsibility to make you money, nor to say you can retire at the date proposed. Further, no accountability if they don't fulfill that "promise".
Example of a good one?
ex 1: Fid Low Priced Stock outperformed Fid Freedom 2030 by about 4X in ave annual ret
Those fees are pretty high.
I'd first check with your bank. A lot of them will offer "free" financial services. I'm sure they make their money on the "backend" as part of the fund's actual fees, but there's no sense in paying fees twice.
Most Financial advisors work through a bank anyway, so there's that. Mine works through Wells Fargo, and refunds all fees if you maintain a certain level of investments. Wells is not my primary bank, so I also keep a small self directed account with Chase. No fees associated with that, and something like $5.00 trades.
I don't know if banks offer 401Ks, I've only heard of IRA's and self directed accounts at Chase.
I made a lot of money investing 401K money into Fid Low Priced stock Fund, but that was 25 years ago!
