all good financial advisors do what you’re saying greenman. they talk to the lawyer and the accountant and other professionals directly and walk the client through anything and everything basically. i work for a BD so i don’t know how much they differ from a wirehouse (i never really understood the distinction).
i think it just comes down to: are you an idiot salesman or do you actually work for your clients?
^In my opinion, most “financial advisors” know very little about finance. And they don’t give good advice.
They are product salesmen. Any knowledge of finance is limited to their products. Any advice they give is incidental to selling their products.
They may tell somebody “You need to put money in an IRA instead of a non-qualified investment”, but that hardly rises to the level of “financial advice”.
I really agree with this. If you know anything about retail advisory, it is very, very difficult to track down a person that actually services their clients on a personal level. But gee, Greenie, everyone here is an expert and great financial advisors seem to be a dime a dozen, so wtf do we know?
Idiot financial advisors are numerous at the retail level - infinity doesn’t sound like he’s there, probably cracking into high net worth or already there. at that level the herd thins out and you’ll see the advisors vs relationship managers.
Having worked on UHNW teams, there is a reason you won’t see the tax or estate specialists unless absolutely necessary. Clients don’t have unlimited time to come to the office and meet nor do they want to be micro managing the whole process. They want a packaged solution. Solid clients are the ones who aren’t in finance and aren’t going to question every move you make about a specialty they do not possess. The advisor meets with them to present your case and synthesizes the information for you into a plan, if 50bps is all it costs - you’re getting a steal IMO, not to mention dibs on IPO blocks and BB closed hedge funds. Your job as a client is to find a good advisor and let him take care of your affairs. The tricky part will be meeting AUM hurdles they may have (most good ones have them) or getting introduced. Obviously having a CPA or LLB would be a massive boost to that advisor’s attractiveness too.
Education wise, these financial advisors at large banks - BOA (US Trust), JPM Private Bank, Goldman Private, Citi, etc - who lead their own team are actually very well educated…Most come from very good undergrad and almost all have either MBA or JD from top tier schools. Same can be applied to our guy at US Trust. Just look at their LinkedIn pages or private bank site bios - most have spectacular resumes.
When we met, they wanted to jam my money into their SMAs or mutual funds where they will get fat ass annual fees. In the end majority of my assets sit in index funds and small portion in separately managed fixed income accounts, MLP, real estate…
just give your money to pa
or skip over pa and just invest in a 3x levered CSI 300 ETF and wait for the US ponzi scheme to implode. all of us FAs are just sucking at the teat of the US corporatist government machine anyway.
IMO… i would assume you’ll likely need the Insurance agent to take care of this if you don’t want to do it yourself or have US Trust do it.
Term Insurance has a very low YTB (yield to broker) and is more of a pain in the ass for a Financial Advisor with a good practice to do. I think of it as something you do for good clients as a service and not to get compensated. Most 529’s can be managed in aged based product. Why not just contact whomever manages the NY plan?
Without committing more $$$$ to the Advisor it would likely be a bad business move for that Advisor to take you on unless they were shifting for your US Trist account to be transferred in future years
I guess I missed part of this in my excitement to promote the “CPA Advisor”…
If you’re looking to “connect”, then “connect” with somebody with connections. I would get insurance from an insurance guy and buy a 529 from an independent B/D. You should be able to figure out who the big independent guys are pretty quick.
I wouldn’t worry much about 529 plans and their complexity. First, you’re paying somebody else to worry about it. Second, even if you do get sub-par performance, we’re not talking much in real dollar amounts. I did the math once, and if you funded a 529 with $1,000 per month every month for 18 years, the difference between an 8% return and a 9% return was about $30/month. That is, $1,030 per month at 8% was the same as $1000 per month at 9%.
Now, if you’re doing it for other reasons, EG - you really need life insurance and a 529 and want the best possible solution, I’d do it yourself.
A quick google search can tell you which direct-sold 529 is best for you. Savingforcollege.com is a good resource.
And you can probably get really cheap term insurance through one of your trade associations or through your employer. (EG - being a CPA, I get dirt cheap term insurance from the AICPA.)
I get the whole networking thing, but LBriscoe’s point shouldn’t get lost in the clutter. There’s no reason to go to a financial advisor for a 529 plan. Go directly to the state’s provider’s site and start a plan yourself. You’ll save yourself at least 25 bps a year in fees.
Not too sure about your calculations there…I just quickly did the calculations on excel…Like you said:
18 Years
$1000 a month
The performance difference between an 8% return and a 9% return on 18 year or 216 month period is $57,087.61 or $264.29/month…
57k is crap ton of money to me…
How much is $1000/month at 9%?
How much is $1030/month at 8%?
(I don’t have the trusty 10bii in front of me, so I can’t tell you off the top of my head)
n/m
Well…you didn’t answer the question.
$12,000 per year for 18 years at 9% interest equals what?
$12,360 per year for 18 years at 8% interest equals what?
oh asking for an actual answer? ok easy…still got this excel in my desktop lol
$1,000/month at 9% for 18 years = $540,374.31
$1,030/month at 8% for 18 years = $497,785.30
Difference is $42,589.01 or $197.17/month
Now let me ask you this…going back to your original statement about $1000 at 8% vs 9%…do you think you should go back to your clients and tell them that actually the difference in an 8% return and a 9% return is bigger - almost 9 folds bigger - than ~$30/month when you, client, invest $1,000 a month for 18 years?
Hmmm…maybe I’m forgetting the actual dollar figures. ( did this about a year ago, so maybe I’m remembering wrong.
I imagine it’s a little closer if you compound yearly rather than monthly.
Now that I think about it, I don’t think it was a 1% advisory fee we were discussing.
We were talking about American Funds 529 platform vs. Oppenheimer’s. Oppenheimer expense ratios tend to be about 25 bps higher. So the difference between an Oppenheimer 529 vs. an American Funds 529 is about $30 per month.
Even if the difference in performance is 25 bps, the net difference is $14,987 or $69.39/month…
In order for the difference to be $30 a month given your initial assumptions - $1,000 a month for 18 years - one plan must return 9% and the other return 8.92923% - trusty Excel and excel goalseek.
But to put this thread to sleep…I have decided to just stay with US Trust for bulk of our assets and trust account and get my umbrella insurance policy and 529 plan with a local “financial advisor” at New York Life.
The “advisor” has series 7 and 66 and 24 or something and CFP and CPA really killing it!!..He was an ex-auditor for 9 years at some medium sized regional tax/audit firm in Long Island before making the jump to “finance” 10 years ago and “never looked back since”
$12,000 per year for 18 years at 9% = 495,616.
$12,300 per year for 18 years at 8.75% = 495,672.
So it’s actually more like $25 per month.