Financial planners

I do not.

I've tried two financial planners. Both were "certified" by one of the national organizations.

I was dissatisfied, in the one case with personal follow-up; in the other with a lack of information about performance and expectations.

So I chose to educate myself and do it myself.

This may not be appropriate for everyone.

--ron

The only financial planner I would consider is a flat fee one. I haven't found one I like yet, but it's on the to do list for 2007.

No more than a Realtor is structured by compensation to truly have the client's best interest in mind, no financial planner working on commission is really interested in or educated to put the needs of the client first. The financial incentive is to sell product, regardless of its appropriateness.

The other thing is that the licensed financial planners I've met all seem to be the folks in the "get rich quick" camp who have failed at other ventures, and don't seem to have their own financial house in order. I've posted on this issue before...it's really odd that of the

3 CFP's I know, none of them seem to be "live within ones means" types and all have significant credit card debt. Maybe I'm running with the wrong crowd, I dunno.

I'm sure there are some excellent professionals out there who could help my situation, but until I have occasion to meet one, I'm my own financial planner!

Best Regards,

-- Todd H.

I'm too cheap to buy one. However my brokerage gives me one for free. I used all their extensive on-line planning packages, buit the in-person still had a couple of useful ideas.

In the area where I live, the number of financial planners advertising their services in the local papers rises and falls along with the stock market itself. Many get into the action when the money is flowing freely and get out when investors become scarce. For an inexperienced person, this pattern should raise questions as to where the advice is going to be at the times it is most needed.

Interestingly, my firm draws in more investors when the market is falling. Many people think they are investing geniuses when the market is climbing and every stock out there is doing well (i.e. internet startups before 2000). Its only after the crash that people realize what their lack of investment knowledge has cost them.

We gain fewer clients when they are making 20% on their own. Its when they lost 50% and we only lost 10% that they come pounding on the door. But that's just our personal experience, not a difinitive answer to the OP.

____ "Everybody talks about returns, but its the risk that will break ya."

That is interesting. Apparently your firm is stable and stays in business through good times and bad. One thing special about the area where I live is the relatively large percentage of retired seniors in the population. When the market is climbing, more fly-by-night firms seem to be around offering advice, but when the market crashes fear sets in, and the seniors tend to move to conservative investments.

"kastnna" wrote

Is that your firm's motto? It's very good.

No. Lots of professions certainly, but not all. Believe me, I've spent a lot of time career planning such that I don't have to be in the position of advocating crap my customers don't need just to make a living.

The temptation for impropriety is built into commission based systems, and I don't want to have to be worrying whether my advisor is recommending something to me because it's good for me above all other options 100%, or because 80% it's a pretty good fit for me, and 20% it'll put food on his table.

I feel the same way about Realtors. Buyer's agency is a misnomer of course because we all know that a buyer's agent doesn't get paid unless you purchase something, and their return on their time is best if they get you to buy sooner rather than later.

Mortgage brokers-- that's also commission based. The higher rate they can get someone to accept, or the more junk fees they can sneak into the respa, the more money they make. The ethical ones don't do this of course, but the frequency of finding unethical ones is alarming.

Home inspectors and attorneys though, at least in teh real estate process are the only ones I like, honestly because they get paid whether I close on a given purchase or not, so they're most likely to keep my interests at heart because there's no financial element swaying them to do otherwise.

The smart and ethical ones do this, I think. They have teh "long haul" model that says if you don't screw your customers they'll be customers for life and you won't have to find new ones.

The churn and burn model is held by others though. "I can make enough screwing clients that I can afford to find others, and the dumb clients may never find out."

Good advice!

Anyone working on commission raises my suspicion level I guess is all I'm saying, and that's why I choose to do my own investment decisions right now, but I'm on the cusp of getting flat fee help looking at where I am and what I may need to be doing differently.

Then again, it probably is no surprise I'm also a "changes his own oil because the quick lube flunkies have managed to screw it up one too many times" type, as well as an engineer. Engineers can't stand dealing with anyone on commission!

Best Regards,

-- Todd H.

That's what I thought about good planners. After oil prices tanked in April or may here in Canada too many silly people who invested at the high panicked and went running to planners. I was visiting mine over income tax discussions and he mentioned he was busy cause individual investors lost alot of money in resources in the spring. Apparently he was relieved I had complicated tax problems instead of lost money in foolish market hype.

I do give a portion of my income to a financial planner each and every month but only a portion. Unfortunately the person I picked is retiring due to health reasons and I don't like his replacement.

I used to use a 'financial executive'. I 'acquired' him when the amount of money I had to invest reached a certain level. I then promptly was transferred to the brokerage side of my banking institution, and found myself aligned with a banking representative who had a VP after his name, and who had no shortage of investments for me to try. After a none too satisfactory result, I decided to do things the Right way.. First, I discovered Paul Merriman and the fabulous website: fundadvice.com. Next I discovered Morningstar, and I learned why Index Funds, used with a 'buy and hold' type of philosophy, made the most sense for me. I started lurking around the Vanguard Diehards forum, and other forums found on Morningstar. I bought the Nolo book entitled 'Plan your Estate', and a couple of others like 'The Boglehead's Guide to Investing', and you know what I found? I could do perfectly well in the market WITHOUT a financial planner!! If you follow a similar path to mine, I bet youll find you can do fine also! But first, I strongly suggest you get on over to fundadvice.com and just start reading... read, read, and read some more. Take all the financial planners you want; you will usually do better than they do just by investing in about

8 Vanguard Index funds covering the key asset categories. He lists several buy and hold portfolios including one I use for my IRA. Figure what percentage in stocks and what percentage in bonds is appropriate for you and then use the following percentages. Buy it and forget about it. In the end, youll find you will outperform the vast majority of socalled financial planners, and you will have done it all by yourself, saving yourself hefty percentages and fund fees in the process!! Good luck, have fun...

% Equity Vanguard FUND

12.5 500 Index 12.5 Value Index 12.5 Small Cap Index 12.5 Small Cap Value Index 20.0 Developed Markets Index 20.0 International Value 10.0 Emerging Mkt. Stock Index

bond % Bond Vanguard Fund

50.0 Short-term Investment Grade 50.0 Total Bond Index

Paul

Todd, I beg your pardon. I messed up, missing your qualifier "working on commission."

I tend to agree with your original post on this matter.

:-) I hate commissions.

-- Todd H.