DFWag84 said:

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Nice, what's the name of the company?

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do you think I'm stupid?

Square1 -- I was kidding with the fee %. However I am curious what is considered competitive for active advisors? Of course it depends on total assets managed, but is 0.5-1.0% reasonable?

HoustonAg_2009 said:

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Square1 -- I was kidding with the fee %. However I am curious what is considered competitive for active advisors? Of course it depends on total assets managed, but is 0.5-1.0% reasonable?

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Cop out answer, but…it depends.

1% is a pretty good jumping off point, but that doesn't really factor on the total assets under management and the complexity (or lack thereof) of a plan.

txaggieacct85 said:

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Stive said:

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txaggieacct85 said:

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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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Based on your comments on the "Is it time to sell" thread maybe you should reconsider.

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I beat the market every year.

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I find this hard to believe since your claim was blatantly false on your own thread. This makes me think you do not follow my patented advice of buying low and selling high.

I apologize for my comment, a little drunk yesterday. Not an excuse

I think .5-1.0 is very normal if your assets are below 7-10 million.

North of 10 million I would expect to pay more like .25 or less.

QBCade said:

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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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great advice I will ask- thanks

starting to come to believe it may be better to

1) up my investing in the corporate 401K to the maximum allowable

(aside from the "corporate match maximum" which I have always done so I have always had around a 7-8% corporate 401K withholding rate)

rather than

2) using my after tax income to then buy equities on my own through my Fidelity brokerage.

My thought has always been that the return will be greater on my sector ETFs and broad market tracking (DIA/ONEQ/QQQ/SPY) in my Fidelity over the much more conservative corporate 401K holdings.

anyone know the percentage difference in rate of return from after tax profits to make it worthwhile over pre-tax corporate 401K investments?

basically I have always thought that I could outperform a corporate 401K by buying my own sector funds in parallel.

Better yet, ask why your corporate 401k doesn't have low cost index funds (if it doesn't).

Depends on if Roth is also available in the 401k, plus your tax bracket now and in the future, which is a function of your lifestyle/withdrawal rate. 15% (or 20) cap gains/dividends vs income rates. Also you can borrow against brokerage assets, or pledge for house down payments...much more flexible and not forced income like an RMD. Step up in basis, on and on.

This is what advisors help with. The advice could likely be different for every person, and change every year. Hence "personal" finance.

txaggieacct85 said:

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DFWag84 said:

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What type of business?

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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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Do you do any ERP systems for manufacturing or distribution companies?

We are in the market for one.

Imo, I am a commoner. I have no financial background, education or training.

Ignorance is expensive - that's true across life. FAs don't have possess "opportunities and strategies" that a DIYer can't learn with a bit of Google and effort. Everyone should TVM themselves and see if they should own it or hire it out. For our use case, it overwhelmingly made sense to DIY.

This is all great information and thanks for posting. I've done most of this myself as previously stated.

For me, it just got to the point that I simply didn't have the time to manage it at the level I wanted to. Wife and I were DINKs and were working our asses off. Free time became prioritized.

Things a bit different these days - I'm still working and it's about to get even busier for me but wife is retiring. However, she knows next to nothing about any of this stuff and wants no part of it.

So advisor it is.

LMCane said:

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starting to come to believe it may be better to

1) up my investing in the corporate 401K to the maximum allowable

(aside from the "corporate match maximum" which I have always done so I have always had around a 7-8% corporate 401K withholding rate)

rather than

2) using my after tax income to then buy equities on my own through my Fidelity brokerage.

My thought has always been that the return will be greater on my sector ETFs and broad market tracking (DIA/ONEQ/QQQ/SPY) in my Fidelity over the much more conservative corporate 401K holdings.

anyone know the percentage difference in rate of return from after tax profits to make it worthwhile over pre-tax corporate 401K investments?

basically I have always thought that I could outperform a corporate 401K by buying my own sector funds in parallel.

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you should still be able to contribute $6K/yr to backdoor Roth IRA even if mega backdoor isn't avail, after tax contributions but tax free growth which is gold

at your tax bracket you should be able to easily max the 401K to get significant tax benefit, sending all that into the lowest cost fund that's closest to SPY/total stock index, then would allow your after tax account to be slightly more aggressive to balance out if desired

htxag09 said:

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RangerRick9211 said:

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Imo, I am a commoner. I have no financial background, education or training.

Ignorance is expensive - that's true across life. FAs don't have possess "opportunities and strategies" that a DIYer can't learn with a bit of Google and effort. Everyone should TVM themselves and see if they should own it or hire it out. For our use case, it overwhelmingly made sense to DIY.

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You're overestimating people.

I recently found out my brother hasn't been contributing money to his 401K for the first 5 years of his career because he didn't really know what it was. Returns aside, that's 4% free contribution from his employer he's been missing out on.

I'd wager the number of people who don't know what a 401K is greatly exceeds those who can google a financial model and understand what it is and how to apply it.....

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Considering literally half the population has $0 in retirement and those that do have an average nest egg somewhere between $40K and $80K (this is according to multiple reports and studies by Fidelity, Vanguard, and the Government), then the vast majority of the population are negligent dumbasses. To your point.

ea1060 said:

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LMCane said:

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ea1060 said:

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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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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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Backdoor Roth IRA.

https://www.nerdwallet.com/article/investing/backdoor-roth-ira

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Ironically, a backdoor Roth IRA, and the subsequent tax implications might make me consider a financial advisor. Or should i be looking at a tax professional instead?
We use a CPA for our taxes already. They aren't complicated, but peace of mind and the stress of not doing your own taxes makes it worth it.

deddog said:

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ea1060 said:

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LMCane said:

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ea1060 said:

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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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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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Backdoor Roth IRA.

https://www.nerdwallet.com/article/investing/backdoor-roth-ira

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Ironically, a backdoor Roth IRA, and the subsequent tax implications might make me consider a financial advisor. Or should i be looking at a tax professional instead?
We use a CPA for our taxes already. They aren't complicated, but peace of mind and the stress of not doing your own taxes makes it worth it.

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A decent CPA should be able to cover you on this one use case. My CPA was the one who first told me about them and I did them for years before I ever had an FA. They aren't that complicated, really.

the regular backdoor Roth is literally just putting $6K of after tax money into a Traditional IRA then converting to Roth and getting tax free growth, nothing that warrants a FA/CPA/tax person

EliteZags said:

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the regular backdoor Roth is literally just putting $6K of after tax money into a Traditional IRA then converting to Roth and getting tax free growth, nothing that warrants a FA/CPA/tax person

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Spouse and i have been working for over 25 years so our traditional IRAs are pretty hefty.

Admittedly, i haven't looked into this much so it might not be too complicated, This is the part I was concerned about:

Quote:

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Here's how it works: When determining your tax bill on a conversion from a traditional IRA to a Roth IRA, the IRS is going to look at all of your traditional IRA accounts combined (to determine your tax bill)

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SquareOne07 said:

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RangerRick9211 said:

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Imo, I am a commoner. I have no financial background, education or training.

Ignorance is expensive - that's true across life. FAs don't have possess "opportunities and strategies" that a DIYer can't learn with a bit of Google and effort. Everyone should TVM themselves and see if they should own it or hire it out. For our use case, it overwhelmingly made sense to DIY.

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I guess you could say the same about lawyers, landscapers. Accountants, chefs, you name it…

People put a value on their own time and the efforts and expertise of others. You've clearly done a lot of research on it all, good for you. If you're confident in that information and have the time to execute the plan as you see best, then go for it. A lot of others choose to do other things with their time and want that second set of eyes as confirmation.

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I disagree, but it's not worth our time to debate. Lawyers and CPAs have a skill set that's hard to obtain. FAs don't. The barrier to learn personal finance is very low: Google.

I even more disagree on time! There is an upfront lift to learning and setting up your financial strategy. I've been coasting for 10 years now. I log in once a month to check balances and rebalance once a quarter. I'm only active daily on writing puts (5 min.). All in, maybe 10 hours over the year to steer the ship. Core to my being is minimizing maintenance, maximizing my hobby time. I do not spend time on this. If I did, it would have been hired out yesterday (like my groceries are, or cleaning my house, or mowing my yard).

Again, TVM for me overwhelmingly supports DIY. My cost is nothing and my time to maintain is minimal, but outcomes are what I want. But that's for my situation. No judgement on those that go FA. I do take issue with the industry at large placing a mythical barrier that leans people a certain direction; especially, especially, for those that charge % of AUM and also offer product.

OldArmyCT said:

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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……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…..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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I couldn't agree more. Peace of mind! I've worked with a Vguard Flagship advisor for the last 6 years. Just turned 70 and it's all about protecting the nest egg. Hard to put a value on peace of mind, especially these days!

SuhrThang said:

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OldArmyCT said:

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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……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…..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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I couldn't agree more. Peace of mind! I've worked with a Vguard Flagship advisor for the last 6 years. Just turned 70 and it's all about protecting the nest egg. Hard to put a value on peace of mind, especially these days!

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I guess, can you quantify this piece of mind? Even roughly, that would be of immense benefit to many of us.

The Chicken Ranch said:

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Better yet, ask why your corporate 401k doesn't have low cost index funds (if it doesn't).

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it does and I am probably even TOO much diversified

loads of like .03% for 15 different index funds

mosdefn14 said:

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Depends on if Roth is also available in the 401k, plus your tax bracket now and in the future, which is a function of your lifestyle/withdrawal rate. 15% (or 20) cap gains/dividends vs income rates. Also you can borrow against brokerage assets, or pledge for house down payments...much more flexible and not forced income like an RMD. Step up in basis, on and on.

This is what advisors help with. The advice could likely be different for every person, and change every year. Hence "personal" finance.

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that's some good advice there

definitely would never pay anyone 1% to control my assets-

but a fixed fee per hour to speak to a tax and retirement planning professional seems like a good idea.

what would be the best expert to try to find when doing a search for someone like the above?

I know it has to be a "fiduciary" to me and not to their own firm.

EliteZags said:

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LMCane said:

---

starting to come to believe it may be better to

1) up my investing in the corporate 401K to the maximum allowable

(aside from the "corporate match maximum" which I have always done so I have always had around a 7-8% corporate 401K withholding rate)

rather than

2) using my after tax income to then buy equities on my own through my Fidelity brokerage.

My thought has always been that the return will be greater on my sector ETFs and broad market tracking (DIA/ONEQ/QQQ/SPY) in my Fidelity over the much more conservative corporate 401K holdings.

anyone know the percentage difference in rate of return from after tax profits to make it worthwhile over pre-tax corporate 401K investments?

basically I have always thought that I could outperform a corporate 401K by buying my own sector funds in parallel.

---

you should still be able to contribute $6K/yr to backdoor Roth IRA even if mega backdoor isn't avail, after tax contributions but tax free growth which is gold

at your tax bracket you should be able to easily max the 401K to get significant tax benefit, sending all that into the lowest cost fund that's closest to SPY/total stock index, then would allow your after tax account to be slightly more aggressive to balance out if desired

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many thanks- that is what I have been doing (the last part of your statement) where my corporate 401Ks are pretty SWAN and conservative and my self-directed Fidelity is a bit more aggressive with individual company stocks

however in general I am more conservative in my investments as my greatest holdings are ONEQ, DIA, SPY and DIV.

but I also have bitcoin, cash and Goldman Sachs bonds as a diversification hedge.

HoustonAg_2009 said:

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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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I use Merrill, most FA's there start at 1.5% if you're investing the ML minimum which its $250K. The more you invest the less you pay. And the fee is negotiable..."I have another $500K with EJ, what will you do to my fee if I bring it over?"

I would start by going to the Garrett planning network website and trying to find someone near you that charges an hourly fee for as needed planning.

RangerRick9211 said:

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SquareOne07 said:

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RangerRick9211 said:

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Imo, I am a commoner. I have no financial background, education or training.

Ignorance is expensive - that's true across life. FAs don't have possess "opportunities and strategies" that a DIYer can't learn with a bit of Google and effort. Everyone should TVM themselves and see if they should own it or hire it out. For our use case, it overwhelmingly made sense to DIY.

---

I guess you could say the same about lawyers, landscapers. Accountants, chefs, you name it…

People put a value on their own time and the efforts and expertise of others. You've clearly done a lot of research on it all, good for you. If you're confident in that information and have the time to execute the plan as you see best, then go for it. A lot of others choose to do other things with their time and want that second set of eyes as confirmation.

---

I disagree, but it's not worth our time to debate. Lawyers and CPAs have a skill set that's hard to obtain. FAs don't. The barrier to learn personal finance is very low: Google.

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I have a friend who is a FA. He once told me, "We are relationship builders, not finance guys." I always remember that whenever a FA tries to pitch me on his services. I probably know as much about investing as the FA does.