I'm considering getting a financial adviser to help me hit the retirement I want. Has anyone gone this route and if so what did you do/look for?

For me I look for someone who is also a teacher to help you learn. If you have someone who just talks over you and isn’t interested in having you learn then it’s the wrong person.

I’ve had a financial advisor for about ten years. I interviewed several, starting with one recommended by a knowledgeable friend. I spoke with them (face to face) to get an idea of their competence and their fees. And I asked each for a list of their current clients willing to speak with me.

Of course they’ll only give you folks that are likely to provide positive references, but the fact that they have such clients is a positive. Then you have to speak with those references, and judge their credibility. Besides performance, ask about the advisor’s client communication.

I have the impression the standard fee is 1% of assets invested annually. Is that what others are seeing? Is that generally negotiable?

^^^^^^^^
Fees are sometimes negotiable. In general, larger accounts will have lower rates.

My guy charge me a bit more than 1% for funds under management. I also have a self-managed account with him, and no fee for that, even though he gives me some advice about it.

If you have clients, employers, friends who you know reasonably well and believe to be very demanding of clear communication and planning coupled with expected results (within reason) that's a decent way to narrow down or find options IMHO.

That's exactly what I did recently. Three of owners in my employer, moderately wealthy guys by most standards, had been using this fellow and his firm for 8-18 years. If he's kept them happy, that was good enough for me. Well, we did meet with him to explore strategy and his view of approach to and through retirement first as well, but a solid decision I think.

Only been a little less than a year, so we'll see. I did call him in late March and ask what date in late Feb/early March he had moved me to all cash as we'd planned in advance of a pandemic. Looonnnnnng silence......

One type of bias to keep in mind is the "In-group" bias when you're making a decision such as this. If it's only your own network, y'all could wind up in the same boat. In other words, be sure to talk with other clients not in your network and ask them if they've know anyone who left the advisor.

I mention this because a work friend ended up with an advisor based on the advice of people who had retired prior to him from the same employer. The advisor talked all of them from moving their assets out of the 401k and pension, and investing under his management. Everything was roses for years, and then reality reared its ugly head. It was smaller scale version of Bernie Madoff. My friend became a plaintiff instead of a guy with a healthy retirement account.

CFP after their names. Doesn't feel like a used car salesman. 15+ years in the business.

Do not trust your neighbor or friend who got a guy.

In reality it's a crap shoot and you won't know until after years. After 10 years if he hasn't beat the S&P index you hired the wrong guy.

Licensed, bonded, and insured

quote:

Originally posted by r0gue:
I have the impression the standard fee is 1% of assets invested annually. Is that what others are seeing? Is that generally negotiable?

Generally people charge what they're worth. Someone that charges a discount, tends to make a lot of un-necessary trades to make commissions on the trades themselves to make up for the lower management fee.

I would be looking for someone who's been at it a while, has a good following and good track record of results.

Not looking for one is what has worked for me. Invest your money in one that you can do your own choosing of funds to invest in. And then usually they have a fee-based advisor service. Where you can talk to aFinancial person about your situation and time frames Etc. Financial advisors are great at making them self money at your expense.

I may not be talking about the right thing. I was more looking at someone who could look at all my accounts and simply advise me on here's where you can do X to make better use of your cash or ask the occasional financial question.

quote:

Originally posted by Skins2881:

In reality it's a crap shoot and you won't know until after years. After 10 years if he hasn't beat the S&P index you hired the wrong guy.

Very few financial advisors beat the S&P 500.

The quoted article deals with active fund managers, but I think the average financial advisor does worse.

"This is not a one-year phenomenon. S&P has been doing this study for 16 years, and the long-term results only strengthen the claims for index investing. Indeed, while a fund manager may outperform for a year or two, the outperformance does not persist. After 10 years, 85 percent of large cap funds underperformed the S&P 500, and after 15 years, nearly 92 percent are trailing the index."

https://www.cnbc.com/2019/03/1...ph-for-indexing.html

The 1% of assets fee is really very high. To understate it for simplicity, after 10 years, you gave your advisor 10% of your retirement fund. After 33 years, you gave up a third of your hard earned retirement savings, principal and interest. Saving is HARD, while giving mediocre advice is not.

What you want is a fee based, FIDUCIARY financial planner. A fiduciary is required to put the client's interest first, and will not act in his own interest with respect to sales commission or security pricing. The fee is based on an hourly rate, not assets under management.

Insurance and Annuity salesmen are NOT fiduciaries. If your advisor has a class 7 license, he (she) is a salesman, not an advisor.

Using the S&P 500 as a benchmark means you are taking too much risk with your retirement savings, since some of your savings should be in bonds, cash and safer liquid assets. I am not as concerned with the return on my money, as I am with the return OF my money.

quote:

Originally posted by 1KPerDay:
Licensed, bonded, and insured

Like the guy that installs gutters?

quote:

Originally posted by Skins2881:
CFP after their names. Doesn't feel like a used car salesman. 15+ years in the business.

Do not trust your neighbor or friend who got a guy.

In reality it's a crap shoot and you won't know until after years. After 10 years if he hasn't beat the S&P index you hired the wrong guy.

While I generally agree with these comments depending on your particular circumstances having a managed account beat the S&P 500 index may not be the best. Given what we’ve recently gone through maybe having a portfolio with a beta less than 1.0 might allow the client to sleep better at night.

I am with the Fidelity Private Client Group and most of our portfolio is managed by me and about 1/3 is managed by them. Every time we meet face to face they try to convince me to let them take the hassle out of it. I politely ask them to compare their performance to mine...there is usually a brief silence ;-). A good portion of my investments is with their 500 index fund which is about as hassle free as you can get (although I do have a strong stomach for volatility...) and a longer time horizon.

quote:

Originally posted by Hay2bale:

quote:

Originally posted by Skins2881:

In reality it's a crap shoot and you won't know until after years. After 10 years if he hasn't beat the S&P index you hired the wrong guy.

Very few financial advisors beat the S&P 500.

....

I'm quite aware of all this, it's my former profession.

It's all stuff that anyone can do on their own too. I would suggest paying for a financial plan. ~$2,000-$2,500 in my area. Then follow the plan, that's the hard part, no one actually does it. You mean I have to pay for DI and life insurance then put away 15% of my income? But there's this new BMW I really want and my kid needs braces, plus the 30% of my income is going to my bazillion sqft home.

Not a single one of my clients followed my recommendations. I told them I didn't care if they used me to do the insurance or investments, I had already been paid for my time. If they felt comfortable with using me they could. I'd follow up at 6 months and 12 months. More than half didn't make one single change to what they were doing.

Best way is pay for plan, then follow plan. Pay to update it every five years or at major life changes. You don't actually need a money manager in the vast majority of cases.

What financial advice can someone give you that isn't widely known or available on the internet with some reading?

Money coming in:

1) Max out your employer 401(k) match.
2) Max out your IRA annual contribution limit.
3) Max out the remainder of your 401(k).
4) Max out your ability to save by cutting back all unnecessary expenses.

Money going out:
1) Pay down revolving debt first. Pick a method, either snowball with smallest balances first or pay down highest interest first.
2) Stand in the truth of what you can "afford". Don't buy things you can't afford.
3) Never pay full price for anything. Negotiate and update all your expenses on regular basis (homeowners insurance, auto insurance, cable bills, the pool guy, house keeper, etc).
4) Maintain everything in good working order, including your health. Upkeep is almost always cheaper than repair or replacement.

Money Saved:
1) Over a long enough time line, low fees will almost always outweigh any benefits that active management will give. Put your money in low fee mutual funds or exchange traded index funds, such as those offered by Vanguard.
2) Alternatively, you can use a robo-investing service such as Betterment or Wealthfront to invest in exchange traded funds for you, while adjusting your stock to bond ratio as you get closer to retirement.
3) Keep a liquid/cash/high yield savings account with an emergency fund. 3 months minimally, 6 months better.
4) Buy a life insurance policy if you have people who are dependent on your income and will be destitute without it--children and non-working spouses. Life insurance is a hedge against losing your income. It is NOT an investment vehicle. Anyone who tells you otherwise is either a) trying to sell you something or b) was tricked into buying and needs to feel better.
5) Build wealth by making your money work in ways you understand. If you understand real estate and home repair, become a landlord. If you suck at understanding people's needs and home repair, don't be a landlord.

Lastly, if you must hire someone, for the love of God hire someone who doesn't make money selling you products. Literally, if they so much as make a penny by selling you a life insurance policy while calling it an investment, just facepalm and walk away.

Consider asking an experienced respected CPA for a recommendation. They will see the tax returns and will know how clients have been doing with investments. Get 2 recs at least, and interview them both. Be sure your advisor is a fiduciary. Legally they must put your interests first.

Your employer/HR might be able to recommend a financial planner/advisor. It's never to early to plan for retirement.

We've had the same financial planner for over 30 years. We were referred by friends that my wife worked with. We're very conservative with our portfolio investments (no stock market) and his advice has done very well for us.

YMMV...I'm not as savvy with these things so I hired a Financial Advisor. He does simple stuff for me. After a year or so, I'm wondering if I need him, but for now I'm going to stay as his advisement (not % based wealth management) fee is not too high IMHO.

He was a referral from a co-worker who retired in her 50's. Grown kids, married, built a brand new house in Denver and relocated there from Los Angeles.

I chose him after interviewing him, the CFP at my Credit Union, and a guy who's investment course I took at a local community college. Felt best with him.