Is it worth hiring a financial advisor?

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infinity ag
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4:11p, 6/18/23
I never have, I even do my own taxes, but many of my friends have "advisors". I feel that I don't need these guys as their job is to do what is right for their employer, not me. I don't blame them either.

#FOMO

So what is the value of an advisor? Am I missing something? Investments wise I am doing very well every year (except 2022). I have more than doubled my money this year.
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YouBet
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6:00p, 6/18/23
AG
Did all of our stuff until early 40s when things got complicated with estates and taxes. It became more than I wanted to (or could) keep up with. That's when we got one.
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TXAGBQ76
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In reply to infinity ag • 6:26p, 6/18/23
AG
My advisor is a private company and receives a management fee only, they are not beholden to any companies product(s).
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Petrino1
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7:11p, 6/18/23
Just do it yourself. It will save you a ton of money in fees in the long run. Most likely an advisor will just put you in mutual funds or stocks that you can buy yourself for a lot cheaper.

Now maybe if you have a few million in the bank, then it makes sense to use a financial advisor.
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mosdefn14
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7:53p, 6/18/23
AG
If all the advisor you hire does is manage money, they're not doing enough. They frequently help smart people not do dumb things, and also do smart things smarter. Good ones will give guidance (education) on a multitude of money related things and also let you keep some of your money/accounts self directed. Also nice to have someone lined up when you no longer can or want to manage the money.
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infinity ag
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In reply to Petrino1 • 9:49p, 6/18/23
ea1060 said:
Just do it yourself. It will save you a ton of money in fees in the long run. Most likely an advisor will just put you in mutual funds or stocks that you can buy yourself for a lot cheaper.

Now maybe if you have a few million in the bank, then it makes sense to use a financial advisor.

Well, I do have a few million if you take my IRA and other trading accounts. But I am doing well currently on my own, I wonder what value a financial advisor will add to it? Or do they have value only during down markets?
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infinity ag
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In reply to mosdefn14 • 9:54p, 6/18/23
mosdefn14 said:
If all the advisor you hire does is manage money, they're not doing enough. They frequently help smart people not do dumb things, and also do smart things smarter. Good ones will give guidance (education) on a multitude of money related things and also let you keep some of your money/accounts self directed. Also nice to have someone lined up when you no longer can or want to manage the money.

OK, I can see the use as a future thing and for estate purposes. However I am planning on managing my own money as I get older even after I retire as a way to keep busy. Unless I run into something I cannot handle. But then I can still hire one at that time if I need one...

I wonder if they help out with things like "you have $x sitting in that account, you can put it in y asset for this reason". Now I have to figure that out myself.
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SquareOne07
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In reply to infinity ag • 11:11p, 6/18/23
AG
infinity ag said:
mosdefn14 said:
If all the advisor you hire does is manage money, they're not doing enough. They frequently help smart people not do dumb things, and also do smart things smarter. Good ones will give guidance (education) on a multitude of money related things and also let you keep some of your money/accounts self directed. Also nice to have someone lined up when you no longer can or want to manage the money.

OK, I can see the use as a future thing and for estate purposes. However I am planning on managing my own money as I get older even after I retire as a way to keep busy. Unless I run into something I cannot handle. But then I can still hire one at that time if I need one...

I wonder if they help out with things like "you have $x sitting in that account, you can put it in y asset for this reason". Now I have to figure that out myself.


Yes, they can do that. I encourage you to come up with a list of such questions specific to yourself, ask for referrals, and interview those folks referred to you. Keep in mind, a good advisor will also help shed light (and application) on the things you don't know about currently. A lot of DIYers missing out on opportunities and strategies they didn't now know existed or were available to them.
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QBCade
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In reply to infinity ag • 2:27a, 6/19/23
AG
infinity ag said:
I never have, I even do my own taxes, but many of my friends have "advisors". I feel that I don't need these guys as their job is to do what is right for their employer, not me. I don't blame them either.

#FOMO

So what is the value of an advisor? Am I missing something? Investments wise I am doing very well every year (except 2022). I have more than doubled my money this year.


For me, I don't want to spend my time doing it. My advisor consistently beats 'the market' after fees, so I'm good. He also regularly finds opps to save $$$ or make some short term returns.
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LMCane
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In reply to Petrino1 • 4:11a, 6/19/23
ea1060 said:
Just do it yourself. It will save you a ton of money in fees in the long run. Most likely an advisor will just put you in mutual funds or stocks that you can buy yourself for a lot cheaper.

Now maybe if you have a few million in the bank, then it makes sense to use a financial advisor.
I have never used an advisor but when it comes to tax harvesting for retirement it may make sense

My salary has always been higher than allowed for Roth IRAs and I always just max out the match for my corporate 401K but in watching "The Money Guys" on Youtube training videos they talk about three buckets of tax treatment for retirement accounts.

Not sure if there is another type of IRA I should be setting up in addition to the 401K.
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QBCade
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In reply to LMCane • 4:38a, 6/19/23
AG
See if your company offers after tax Mega back door Roth. Huge bene if they do. If they don't, ask them to start.
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OldArmyCT
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4:55a, 6/19/23
AG
I was an FA for 28 years, that qualifies me to do my own investing, regardless of results. My spouse however, she has no clue. And if I keeled over she would be completely lost, might even forget to change a beneficiary or two, wouldn't even know who to appoint as executor. So when I retired I left everything with my partner at work. 90% of my money is in a managed account, ETF's and single stocks (about 180) picked by a manager, the rest in a self-directed account. Then she died, quickly and unexpectedly, and if she was clueless my kids are worse. So what am I getting for my .05% fee? Peace of mind that when I go they have to make one phone call and sign a few papers. And with luck they won't spend it all the first 6 weeks they have it (and there's a bunch there, even split 3 ways). That's why I have an FA. That plus knowing if my mind ever starts to go I won't be able to make dumb decisions easily.
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YouBet
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In reply to OldArmyCT • 6:44a, 6/19/23
AG
OldArmyCT said:
I was an FA for 28 years, that qualifies me to do my own investing, regardless of results. My spouse however, she has no clue. And if I keeled over she would be completely lost, might even forget to change a beneficiary or two, wouldn't even know who to appoint as executor. So when I retired I left everything with my partner at work. 90% of my money is in a managed account, ETF's and single stocks (about 180) picked by a manager, the rest in a self-directed account. Then she died, quickly and unexpectedly, and if she was clueless my kids are worse. So what am I getting for my .05% fee? Peace of mind that when I go they have to make one phone call and sign a few papers. And with luck they won't spend it all the first 6 weeks they have it (and there's a bunch there, even split 3 ways). That's why I have an FA. That plus knowing if my mind ever starts to go I won't be able to make dumb decisions easily.


Good call out. We actually lived through this with my FILs stuff. If he had not had an advisor there is no telling what would have happened. He developed dementia (has now passed away) and he did some stupid **** with his money before we realized what was going on with him.

His advisor called us to tell us so we could ahold of the situation. Otherwise, he would have drained his money and been penniless and homeless.
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mosdefn14
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In reply to LMCane • 7:12a, 6/19/23
AG
LMCane said:


My salary has always been higher than allowed for Roth IRAs and I always just max out the match for my corporate 401K but in watching "The Money Guys" on Youtube training videos they talk about three buckets of tax treatment for retirement accounts.

Not sure if there is another type of IRA I should be setting up in addition to the 401K.


This right here is why I would argue a conversation is worthwhile. If you're making $230k+ and maxing 401k + match for 30 years you're going to have a $10mm 401k and $50-$80k combined social security depending if spouse worked. Assuming a 4% withdrawal rate the account won't get smaller, then figure the tax on the RMDs for you, then for a surviving spouse filing as a single taxpayer, and then the kids having to pull it out over 10 years. Lots of taxes for decades for saving a little today.

Saving is important. Picking good stuff is important. Not being dumb is important.

An advisor earns their fee and more by helping you do it all a little better. This pot instead of that pot. Challenging rules of thumb. Pay these taxes not those taxes. For you, spouse, and the next generation.

Some people like to mow their own lawn. Some like spending Saturdays with their family. Which one enjoys life more? Not sure there is a wrong answer, but the numbers says folks with advisors generally have more wealth than those without.
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Petrino1
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In reply to LMCane • 7:22a, 6/19/23
LMCane said:
ea1060 said:
Just do it yourself. It will save you a ton of money in fees in the long run. Most likely an advisor will just put you in mutual funds or stocks that you can buy yourself for a lot cheaper.

Now maybe if you have a few million in the bank, then it makes sense to use a financial advisor.
I have never used an advisor but when it comes to tax harvesting for retirement it may make sense

My salary has always been higher than allowed for Roth IRAs and I always just max out the match for my corporate 401K but in watching "The Money Guys" on Youtube training videos they talk about three buckets of tax treatment for retirement accounts.

Not sure if there is another type of IRA I should be setting up in addition to the 401K.
Backdoor Roth IRA.

https://www.nerdwallet.com/article/investing/backdoor-roth-ira
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gigemhilo
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In reply to YouBet • 8:32a, 6/19/23
AG
YouBet said:
OldArmyCT said:
I was an FA for 28 years, that qualifies me to do my own investing, regardless of results. My spouse however, she has no clue. And if I keeled over she would be completely lost, might even forget to change a beneficiary or two, wouldn't even know who to appoint as executor. So when I retired I left everything with my partner at work. 90% of my money is in a managed account, ETF's and single stocks (about 180) picked by a manager, the rest in a self-directed account. Then she died, quickly and unexpectedly, and if she was clueless my kids are worse. So what am I getting for my .05% fee? Peace of mind that when I go they have to make one phone call and sign a few papers. And with luck they won't spend it all the first 6 weeks they have it (and there's a bunch there, even split 3 ways). That's why I have an FA. That plus knowing if my mind ever starts to go I won't be able to make dumb decisions easily.


Good call out. We actually lived through this with my FILs stuff. If he had not had an advisor there is no telling what would have happened. He developed dementia (has now passed away) and he did some stupid **** with his money before we realized what was going on with him.

His advisor called us to tell us so we could ahold of the situation. Otherwise, he would have drained his money and been penniless and homeless.

This happens more than people realize. I had a client a couple years ago that did just that - drained the accounts right before he died buying gifts for his heirs that they didnt want. It was sweet of him, but it was dementia driven. His kids were clueless financially and didnt realize what was going on until it was too late.

I think this conversation is too often driven by ROI and not on the added value an advisor would bring. Even if you like to make your own decisions, I would use an advisor to at least HOLD a majority of your assets - especially when you near retirement age. It only takes a couple of mistakes to drastically hurt your portfolio. Protect yourself (and your spouse) from yourself and make sure your heirs have a roadmap to succession (one call away).
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South Platte
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In reply to QBCade • 8:39a, 6/19/23
QBCade said:
infinity ag said:
I never have, I even do my own taxes, but many of my friends have "advisors". I feel that I don't need these guys as their job is to do what is right for their employer, not me. I don't blame them either.

#FOMO

So what is the value of an advisor? Am I missing something? Investments wise I am doing very well every year (except 2022). I have more than doubled my money this year.


For me, I don't want to spend my time doing it. My advisor consistently beats 'the market' after fees, so I'm good. He also regularly finds opps to save $$$ or make some short term returns.
Is your advisor taking new clients? Any idea if there is a minimum investment?
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Ed Carter
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11:29a, 6/19/23
AG
Anyone have a good referral for a fee only advisor in the DFW area? In particular someone that can help with tax strategies during and after accumulation phase?
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htxag09
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1:28p, 6/19/23
AG
For us, ours was invaluable.

We started when we were fairly young and had no idea what we were doing. And I don't just mean what to invest in. I mean no idea what we were saving, what we should be saving, following lifestyle creep, etc.

So, starting really young and mapping out our costs, our goals, and how to get there was extremely helpful. No way we'd be where we are today with out.

Sure, now that we've learned a lot and map a lot out ourselves we could do it on our own. But, as mentioned in this thread, he does a lot more than simply decide what investments to put our money it. So still worth it, to us. But I don't question anyone who may think otherwise.
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Stive
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2:56p, 6/19/23
AG
Didn't Vanguard themselves put out a paper/article stating that an advisor is typically worth around 3% ROR? And if I'm remembering correctly it had pretty close to nothing to do with outperforming the market. Seems like most of it was behavioral, tax, etc.

As someone mentioned above: if all your advisor does is handle the allocation of your accounts then you likely need a new advisor. Sounding board, tax advice (especially leading into and during retirement), projections, some risk management, and estate planning should all be on the table
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Retired Principal
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3:35p, 6/19/23
AG
We went with one when we retired. We use Fidelity, which is who Chevron uses for their 401ks. Rolling over money was seamless. We like our guy. Straight shooter.
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one safe place
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In reply to OldArmyCT • 1:59a, 6/20/23
OldArmyCT said:
I was an FA for 28 years, that qualifies me to do my own investing, regardless of results. My spouse however, she has no clue. And if I keeled over she would be completely lost, might even forget to change a beneficiary or two, wouldn't even know who to appoint as executor. So when I retired I left everything with my partner at work. 90% of my money is in a managed account, ETF's and single stocks (about 180) picked by a manager, the rest in a self-directed account. Then she died, quickly and unexpectedly, and if she was clueless my kids are worse. So what am I getting for my .05% fee? Peace of mind that when I go they have to make one phone call and sign a few papers. And with luck they won't spend it all the first 6 weeks they have it (and there's a bunch there, even split 3 ways). That's why I have an FA. That plus knowing if my mind ever starts to go I won't be able to make dumb decisions easily.
Somewhat similar to some of my thoughts. I did my own investing (I am not a FA) for 40 years or so and was happy with the results. A few years ago, I moved almost all our stuff to one of my sons-in-law who is a FA. Since I was a CPA, I pretty much handled all our money stuff, and my wife was fine not having anything to do with it. The reason I put almost everything with him was so that she had someone to look after her money when I die.

It was hard turning the assets over to someone else, I will admit. But in the overall scheme of things, it was the best move for her benefit.
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aggiebrad94
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9:49a, 6/20/23
AG
  • I am a Financial Advisor. I have been for almost 30 years
  • My firm does its own research, manages its own models, and is of great value to our clients who want or need a second set of eyes.
  • We provide as much estate and wealth planning our clients need.
  • My best argument for having an FA is taking the emotion out of money. For the high net worth, this allows them to travel the world and spoil their grandkids knowing they won't run out of money. For others, it's knowing we take the politics out of data and make portfolio changes when the data dictates, not the headlines.

I'm glad to explain further via phone, email, or Zoom (in person as well near if you're in driving distance of The Woodlands).

blivingston@harmanwealth.com
www.harmanwealth.com
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QBCade
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In reply to South Platte • 10:26a, 6/20/23
AG
I believe so. I think it's $1M investable.
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txaggieacct85
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11:02a, 6/20/23
AG
I quit using an advisor a long time ago. I found no one else cared about my finances as much as me.
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Stive
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In reply to txaggieacct85 • 11:35a, 6/20/23
AG
txaggieacct85 said:
I quit using an advisor a long time ago. I found no one else cared about my finances as much as me.

Based on your comments on the "Is it time to sell" thread maybe you should reconsider.
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txaggieacct85
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In reply to Stive • 11:36a, 6/20/23
AG
Stive said:
txaggieacct85 said:
I quit using an advisor a long time ago. I found no one else cared about my finances as much as me.

Based on your comments on the "Is it time to sell" thread maybe you should reconsider.
I beat the market every year.
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SquareOne07
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In reply to txaggieacct85 • 11:39a, 6/20/23
AG
txaggieacct85 said:
Stive said:
txaggieacct85 said:
I quit using an advisor a long time ago. I found no one else cared about my finances as much as me.

Based on your comments on the "Is it time to sell" thread maybe you should reconsider.
I beat the market every year.


I bet you come back ahead every time you go to Vegas, huh?

I don't understand why the "I beat the market every year" guys aren't bajillionaires. They're so good at what they do, aren't they just wasting their time with a real job?
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Stive
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In reply to txaggieacct85 • 11:44a, 6/20/23
AG
txaggieacct85 said:
Stive said:
txaggieacct85 said:
I quit using an advisor a long time ago. I found no one else cared about my finances as much as me.

Based on your comments on the "Is it time to sell" thread maybe you should reconsider.
I beat the market every year.

We expect nothing less from you Barnes.
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txaggieacct85
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In reply to SquareOne07 • 11:55a, 6/20/23
AG
SquareOne07 said:
txaggieacct85 said:
Stive said:
txaggieacct85 said:
I quit using an advisor a long time ago. I found no one else cared about my finances as much as me.

Based on your comments on the "Is it time to sell" thread maybe you should reconsider.
I beat the market every year.


I bet you come back ahead every time you go to Vegas, huh?

I don't understand why the "I beat the market every year" guys aren't bajillionaires. They're so good at what they do, aren't they just wasting their time with a real job?
I don't go to vegas. I've gambled $100 my entire life and it was in Wendover Nevada in 1986 and I won $50 and I've never gambled since.

And I own my own company that has had great success. I started the company in 2002.

So I havent had a "real job" for a long time
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HoustonAg_2009
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In reply to OldArmyCT • 1:05p, 6/20/23
OldArmy - Great post & appreciate your opinion. 0.05% fee for an active financial advisor? Please let me know where I can get this rate!!
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DFWag84
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In reply to txaggieacct85 • 1:40p, 6/20/23
What type of business?
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SquareOne07
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In reply to HoustonAg_2009 • 2:00p, 6/20/23
AG
HoustonAg_2009 said:
OldArmy - Great post & appreciate your opinion. 0.05% fee for an active financial advisor? Please let me know where I can get this rate!!


He left it to his partner who is essentially doing it for free and out of concern for his family and wife.

No FA is going to do their job for .05%
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txaggieacct85
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In reply to DFWag84 • 2:16p, 6/20/23
AG
DFWag84 said:
What type of business?
we do ERP systems implementations and support for mostly large oil and gas companies. Also have some of our own software products
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DFWag84
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In reply to txaggieacct85 • 2:31p, 6/20/23
Nice, what's the name of the company?
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