Originally posted by Gone to Texas
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Who uses a financial advisor?
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Originally posted by shollandatx View PostPoint taken - Didn't even realize that was public - Simply thought the forum administrator was interested in your "industry" upon registration.
You claim I'm "soft selling" - all I did was offer to analyze a TBH's statements for fees. This is what I do day in and day out, among other things.
Gotta say, it's threads like this that make me want to ditch my membership. I have quite a few really good friends on here, but hell, I never thought I'd catch so much flack for bringing awareness to a subject.
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Yes we do and of course they charge a fee. Fair work deserves fair pay. Great work deserves better pay.
We pay 1% base with an escalator based on quarterly results. Their effort is not limited to just mutual fund and stock advise. Based on the services provided and what they have helped our family to achieve, we'll always spend money on an excellent financial advisor.Last edited by tigerscowboy; 01-27-2017, 01:37 PM.
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Well, darn! I thought I was moving on...but I have one more comment to make!
Originally posted by ntxshooter View PostGot out of using one when I realized how easy it is to do on my own. Outside of my 401k, I Buy low cost index funds. Easy as can be and what money I was losing in fees is now working
for me. No market timing, no trying to beat the market (you won't over the longrun), no trying to guess which stocks to buy...just low cost index funds.
Some people do their own taxes; others use a professional. Some folks do their own estate documents; others hire an attorney. Some folks do their own electrical work, plumbing, whatever; others call a professional. Some work out on their own; others hire a personal trainer. Etc., etc., etc.
Your last sentence is such a tired cop out. Regularly we read/hear easy advice about investing in index funds because they beat 75% of all the actively managed funds. Those index funds work for many, but why not buy those 25% of the funds that DO beat the indexes regularly??? Why is that so hard to figure out? Yes, there are many funds that have beaten the indexes over a long periods of time, in spite of their higher fees.
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Originally posted by nchunter View PostSo if the historical returns of the market are on average 6%, your advisor effectively keeps 25% of your profits each year. If you have $200,000 under management and you get a 6% return you should have about $212,000. Instead he takes $3,392 so you actually have $208,608.That makes your effective change only 4.2%. Are you telling me he consistently beat a total market fund by greater then 40% every year to make up for his fees. if he is and isn't named madoff I would love to see the true comparisons.
Financial advisors aren't just there to beat the market. They provide insights to cut your tax bill, and also help accommodate any changes in your life (buying a house, kid, etc) that could cause an issue. Disclaimer: I did it on my own for 20yrs and then gave it all to an advisor - this is best for me b/c he puts me into investment funds that I can't access otherwise, and also helps me avoid big tax bills. In the end it's what you feel best about but it's not right to simply look at the investment return. Good luck!
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Originally posted by ATXBowhunter View PostFinancial advisors aren't just there to beat the market. They provide insights to cut your tax bill, and also help accommodate any changes in your life (buying a house, kid, etc) that could cause an issue. Disclaimer: I did it on my own for 20yrs and then gave it all to an advisor - this is best for me b/c he puts me into investment funds that I can't access otherwise, and also helps me avoid big tax bills. In the end it's what you feel best about but it's not right to simply look at the investment return. Good luck!
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Originally posted by Burnadell View PostWell, darn! I thought I was moving on...but I have one more comment to make!
As I have always told clients, if you understand investments, know how to analyze them, have the time to manage them, have the necessary resources and have the desire to do all of that, then they do not need an advisor; otherwise, that is where we are beneficial.
Some people do their own taxes; others use a professional. Some folks do their own estate documents; others hire an attorney. Some folks do their own electrical work, plumbing, whatever; others call a professional. Some work out on their own; others hire a personal trainer. Etc., etc., etc.
Your last sentence is such a tired cop out. Regularly we read/hear easy advice about investing in index funds because they beat 75% of all the actively managed funds. Those index funds work for many, but why not buy those 25% of the funds that DO beat the indexes regularly??? Why is that so hard to figure out? Yes, there are many funds that have beaten the indexes over a long periods of time, in spite of their higher fees.
Lets just say that the number is 25% of funds beat the index after fees and taxes. So if 1 in 4 active managers beat their index after fees and taxes and you choose to hold say 8 funds in a portfolio, then the advisor has to pick the one winner out of four, and replicate that seven more times to build the portfolio. (1/4)^8 is a .0015% probability that you would choose all funds that would beat their index if 1 in 4 funds did and you choose an 8 fund portfolio. And then you'd have to repeat that process every year for an individual's investment time horizon. Or you could buy the index, plain and simple. Running through that probability is the reason many folks choose passive index investing.
I'm not saying its one size fits all for everyone so don't shoot the messenger however there is an entire industry operating out there who's entire business model depends on individuals thinking that active management and using financial advisors wins out over DIY passive index investing.
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To be thorough, I posted this in the Dow thread as well.
Let me be clear and cut through the BS, as Burnadell mentioned above. I am NOT a licensed securities advisor. I AM however a strategist working behind the scenes building financial plans for an extremely successful wealth management group. For those that aren't in the industry that simply means I'm the guy crunching numbers on performance for new and existing clients and evaluating performance. I do NOT sit down with clients and SELL securities. Yes, when I registered for the forum, I plugged (or selected - not sure) in financial advisor not realizing it was viewable. Looking back, I should have explained this from the get go.
With that said, a fair analogy would simply be a finance guy at a car dealership explaining GOOD questions to ask your car salesman. I'd highly doubt he or she would catch so much flack, except from car salesman. It appears there are a few licensed advisors on here who consider their license to be the gold standard for being allowed to discuss the subject. Granted they are the only ones legally allowed to recommend product, I was careful not to do so. In my opinion, there's quite a few advantages to hearing thoughts from someone who's paycheck is not derived on selling one product over another. It's my experience many advisors do NOT see the performance of portfolios in as great of detail as someone in my position. I was very careful not to discuss products as that's not my purview, and the law doesn't allow me to (at least on the front lines). All I merely said was it was a great time to get with your advisor. I sincerely apologize if this offended anyone. Moving on.
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Originally posted by Gone to Texas View PostI personally don't like financial advisors. I am sure there are several qualified ones out there. However, typical training is about 30 days then its off to getting clients. Remember, they get paid if you make money or lose money, they could care less what happens they just want you to invest.
I really like Watermark Real Estate for investments. They do commercial Real Estate and they only take commission on what is earned, not what you invest so they are really motivated to make money. Also, it's run by a couple of Christian boys originally from Texas.
Just my opinion.
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