FA

hhreddithh

Depending on the firm… lots of places are discouraging smaller accounts/households. The FA may get a smaller payout on accounts under X value. It just isn’t worth the time. Don’t take it personally. Just move the assets. I promise you they don’t care.

dietcokewLime

My thinking is that the allocation they are giving you may be the right one over the long run. You can tweak a few things and ask your FA some questions about how they see this current market/changes to your allocation over time. Part of the value the FA adds is that they will act unemotionally/rationally on your behalf when markets get volatile. If you are a disciplined enough investor on your own you can try do it yourself.

Greenbargo

> You can't even find any sources not related to reddit I never cited any sources, Reddit-based or otherwise. I don't need to cite any sources; I am the one asking for any proof of the theory that FA works. > You keep making claims saying that it doesn't work but fail to provide sources Again, what I said above: I don't need to provide sources since I am not making a claim that FA works. This is called a burden of proof and it is on you. Much like how I don't need to provide sources for the earth being flat. You are the one making a contention here that the earth is flat/FA works, so it is you who needs to provide proof that your theory makes any sense. > A simple google search will tell you how successful it has been used Funny you should mention a simple Google search as that is exactly what brought me to Reddit. I could not find a single source online that even theoretically explained how FA could work. here are the top 3 Google results for proof of FA: [1. https://www.investopedia.com/terms/f/fundamentalanalysis.asp](https://www.investopedia.com/terms/f/fundamentalanalysis.asp) [2. https://www.fool.com/terms/f/fundamental-investing/ ](https://www.fool.com/terms/f/fundamental-investing/) [3. https://www.ig.com/us/ig-academy/fundamental-analysis/the-pros-and-cons-of-fundamental-analysis](https://www.ig.com/us/ig-academy/fundamental-analysis/the-pros-and-cons-of-fundamental-analysis) You will find that none of these three give any justification for why FA would work or how it withstands the scrutiny presented in my previous comments. These articles leave all my questions still standing: What are the criteria for FA? If they are known, how are they not useless (since if everybody known a company is 'undervalued' it will instantly be accurately valued)? If they are unknown, how are they not useless (since you need others to agree with your predictions for them to hold true)? If you think my questioning of FA leads to something that is "plain wrong and flat out misleading" then please give me answers to my above three questions. If you can't/don't want to do that then I can't agree that a smart investor would ever use such an unjustifiable strategy. So far your only proof that FA has worked is that one in a billion investors (Warren Buffet and I'm sure some choice others) have made money off it. I'm afraid that is not very good proof for the reasons stated in my previous comments (probability curve). All the fancy lingo you throw at the end is not an answer to my three fundamental questions and so, I believe, is wholly irrelevant to the conversation. Please correct me if I'm wrong.

nicidee

Just one critique as an exemplar: you have allocations to MSFT and TSLA but they are also constituents of MGK Suggestion: tell the FA your risk appetite (to see if 70/30 is still right at 27) and once you have the split, ladder the bonds to provide the income, that you want to draw annually, tax efficiently and leave the equities in funds (I.e. no more duplication in individual names) but get the FA to be clear what the available themes are : region (US, developed intl, EM) / size of company (Small, mid, large, mega caps) / factor (value, growth, quality, momentum, etc.); and what the costs of each fund are. Choose with the FA based on cost and non-duplication of themes remembering that less is more (I.e with 6 funds you might be done on your equity allocation). The FA should be able to tell you how to benchmark the portfolio.

cbow60

Our FA gets 1% and I sure don’t think he is worth it for no more time than he puts in a year

Beard_fleas

I think FAs are really for people who have zero idea what they are doing and are not capable of using google to figure it out. For those people, a FA is probably going to be a net benefit. They will still underperform a simple mix of VTI/BND but will do better than leaving their money in a bank account. 

CleverCactus

I just want them to have the same level of 2FA I've come to expect from children's videogames. Sure set it and forget it, but I don't want to come back to it all gone because the one of the widest used brokerage uses SMS verification

Pravin_LOL

Fidelity: "would you like me to remember you on this device so you don't have to do 2FA every time?" Fidelity 5 minutes later: \[draws gun\] "who the fuck are you? show me 2FA now"

WarInternal

I had to disable my adblocker to fix this. Why that was relevant to a 2FA login process I don't know.

MaybeYesMayb

I’ve been reading a lot lately some classic Value investing Benjamin Graham, some Peter lynch and the little green book of value investing & yes I’m aware not all people are cut from the same cloth including FA’s

DCFInvesting

As an FA currently, I wish all people who have this understanding. The 1% fee based model isn’t to beat the S&P. It’s to put strategy together based on the goals you have laid out, and the advisor will properly manage the accounts in line with your goals (hopefully).

azian0713

Oof brother. Your IRR or average annual return considering your withdrawals and dividends is 3.762%. Average return of the S&P 500 since 2016 is ~11%. Let’s call that 8% post tax for you (conservative estimate). Average return of a total market bond fund inclusive of dividends since 2016 is about 2% post tax for you (again, conservative). Putting this together, you could have put 72% of your money into S&P500 and 28% into a total market bond etf and made 6.6% average annual return, almost 2x what your FA is getting and you wouldn’t have paid someone something. I think it’s time to ask your FA what he is bringing to the table to charge a 1% fee and why your portfolio is underperforming. If they cannot answer these questions with a reasonable answer, it’s time to leave.

wildcat12321

What did you tell your FA your goals and risk tolerance were? Personally, I am an S&P500 person, I believe in that as the default metric. But while lots of folks on here will tell you that every FA is a crook if they fall below their preferred index, the reality is you need to understand what the goals were you gave that FA. If you said "I am conservative and don't want to risk losing money" then it isn't fair to compare to VTI or a tech fund for example. The real question is, for your 1%, what are you getting? If it is just a managed portfolio, why not buy VOO on your own? If you get other advice, banking benefits, etc. then the question is what should you be talking to your advisor about for goals, risks, rewards, tradeoffs.

stuvida

Compare it to S&P for overall return and compare it to Dow Jones for tracking error None of my business, but paying an FA 1% for putting your money in Dow Jones ETFs sounds like a lot. If he's providing other services then maybe that's OK

DeeDee_Z

Having all your accounts appear under one login is a great convenience, especially when you want to do inter-account transfers; A "Journal Entry" between two accounts at the same firm happens instantly, not overnight like an ACH move. Frankly, I even abandoned the account "consolidator" software that my FA provided me after I reduced everything to one brokerage, in favor of using the bkg software. One login; there's everybody's accounts in the whole house.

International_One110

They’re way overvalued, that’s about it. Decent amount of debt and a lot of speculation, I work in the marketing industry with zero insider info but I feel that they’re desperate. Not FA, position: near itm puts for after earnings

Professional-Age8029

Shut up FA....

3boobsarenice

Very easy, every FA tells you past performance is not indicative of future performance. No mystery, they also lock you out of options and fixtures automatically. You have to ask, to get this medicine.

futurespacecadet

Thanks for explaining. Ok so we should seek to exit MBS when rate cuts are gonna happen. Copy. Yeah this isn’t a windfall. More so around 800k so I don’t even know if an FA is needed given all the info I’ve shared , I wonder if it’s overkill to be honest. Been def been getting some strong mixed opinions in the comments, from an ‘FA may be good to have during bear market’ to ‘this dude is scamming you’ Not sure what to think…. I also don’t think it needs to be super complicated. Is there a chance he’s just doing too much

xyzzy321

My state (MO) allows any/many plans as tax deductible, I think. There's no additional benefit by utilizing the MO 529. I have 2FA enabled on all accounts and I agree that if I'm ever hacked all accounts under that login are compromised... but that's where SPIC protections would come in, right?

futurespacecadet

There an account performance over the last 15 years was an average of 7% per year, that is not including taxes were applicable, and also not including the 1.35% FA fee. As I mentioned before their only income is SS, which is maybe like $7k/year. I would say they are more risk averse but would still like to see their account grow. Basically, this money has to last them the rest of their lives. While I don’t financial advisor, a 7% return (not including fees) doesn’t seem worth it to me. I mean, the advisor has them holding 120 different equities and 12 different mutual funds. If we took their money and put it in VTSAX and another bond fund with a 60-40 split. Would that be just as effective without over complicating it and while avoiding fees?

RandoStonian

I don't know much about Tether's exact process, but their FAQ *does* discuss a KYC process for being able to directly create or redeem Tether for currency. >A new user can begin the registration process by filling in their personal details on the Tether sign up page here. >As part of Tether’s robust security measures, the user must activate Two-Factor Authentication (2FA) for their Tether account. The user must pay a verification fee of 150 USD₮ (the amount is non-refundable but can be part of future redemptions). >The user must then undergo a verification process, either as an individual or corporate, and submit all required documents. >Tether’s compliance team will then review the user’s verification request. As Tether’s robust Know Your Customer (KYC) process includes conducting due diligence on all customers and rating the risks of every customer, this review could take days to weeks to complete. The user will be notified once account verification has been completed. https://tether.to/en/faqs/

MattyJoe87

truth social announces streaming services… netflix tanks against good earnings… coincidence??!emote:t5\_2th52:12787 not a FA

Brushermans

See people like that actually need a FA lol

SirGlass

Well obvously reddit is not a single hive mind but yes lots of users consider 100% VOO a safe conservative portfolio I mean sometimes I cringe when I hear someone being like "My dad died and he took care of the money with an FA, my mom is 75 years old and I am thinking just skipping the FA and putting their retirment it into a safe fund like VOO "

harrison_wintergreen

> There is no difference in the stocks that I buy and the same stocks being bought by anyone else. The only difference is the management fee. but there can be a difference in strategy or advice. a good FA might recommend against trend-chasing the same hot stocks everyone is buying, for example.

joerover34

The only time you need a FA or to inquire their knowledge at least is when you’re retiring/near retirement and making that transition from the boglehead method (acquiring growth) to the dividend /fixed income / bond method.

SirGlass

I think that is a fundemental misundertanding of what most good FA are there to do They are not there to beat the market and make hot stock picks for the most part. They will always most likely build a more conservative portfolio that may have better risk adjusted returns based on your age ; note better returns vs the S&P500

convolve-this

You need to provide a lot more details, as their actions can all be reasonably explained. > 45% in bonds in my IRA What percentage of your entire portfolio is bonds? It isn't unusual to concentrate the allocation for bonds in tax advantaged accounts. If 45% of your entire portfolio is bonds and you emphasized you want aggressive growth, then yea, the FA was either confused or wasn't listening to you. > All mutual funds while I’m paying a professional services fee This is fine assuming they chose reasonable funds. You don't want a FA that does stock picking, because the probability of you finding one that consistently beats the market is exceedingly low. > Morning Star ratings on those funds averaged 2 out of 5 stars Take the ratings with a grain of salt. I invest heavily in a fund that has made me a lot of money over the decades (far more than if I had entirely invested in the S&P 500), and it oscillates between 3-4 stars. > Moving cash (4% high yield savings) into cash in my IRA I suspect there is more context around this that you may be leaving out. To clarify, I'm not arguing you shouldn't take the reins over your own money. The 1% fee bites harder as your net worth increases, and if you are an analytical person and willing to do the research, you should be able to manage your money just as well as a FA.

gizmole

Fidelity Wealth Management is just as bad. Most FA's just prey on the financially uneducated and really don't do anything in your best interest. They only try their best to keep you hooked in and collect their fees. Total AUM fees should be illegal. Should only be allowed to collect percent fees of the performance achieved. But all these companies have Congress in the pockets.

WhoGotDaKeys2MaBeema

Because the point of it is to actually do your due diligence. You can't even find any sources not related to reddit. You keep making claims saying that it doesn't work but fail to provide sources. A simple google search will tell you how successful it has been use, but you forgot that I also said it wasn't the only method. A smart investor should know when to apply a strategy based on certain indicators. To say it doesn't work is just plain wrong and flat out misleading. There are multiple stategies when it comes to investing, but FA is the most elementary style of investing at its roots that anybody with no investing knowledge can do (buy and hold). If we start getting into iron condors, understanding the greeks and covered call strategies it is far more advanced than the average investor can understand and more likely than not they will lose far more money that way than a simple buy and hold process.

MaybeYesMayb

How much did you have invested? I’m dying to leave my FA I’ve had since I was a minor not my choice I have currently 900k invested. I really want to self manage as that 1% fee has already cost me 100k 1% for every year =10k x 10 years is 100k and not to mention the opportunity costs.

Greenbargo

I'm not asking for me. I'm asking for you and for everybody else that keeps throwing their money away thinking they can predict stocks based on some mystery criteria that nobody is able to point to. If you are sure that FA works then why cannot it not withstand an ounce of scrutiny? I'm genuinely confused as to how FA could ever work even as a theory. You are right; it is certainly not for me. The question is how it could ever be for anyone (who doesn't want to gamble away their money) investing in the stock market today.

Dip2Tip

file:///var/mobile/Library/SMS/Attachments/63/03/C909D022-D4EB-4A6D-BF73-2AF266FA343F/IMG_1965.jpeg

consumervigilante

What's the buy in fee? Is that deducted from dividends collected or is that 2% of the initial $500K? I have a dividend portfolio I put together & manage on my own in a brokerage account. It is made up of a mix of REIT stocks, BDC stocks, dividend aristocrat & king stocks (those paying div's over a 25 to 50 year period) as well as ETF's tracking the major indices along with a few covered call ETF's. Looks like the fund your FA is talking about is an annuity. I stay away from annuities. I'd read the fine print on restrictions-how much flexibility you have with accessing your money & so on. Also keep in mind your dividends are taxed as regular income. Part of putting together a portfolio is putting some of your capital into instruments with better tax treatment. Some covered call ETF's offer those like the NEOS funds. Some bond ETF's pay dividends that are exempt from both state and federal income tax. I'd do more research. There are surprisingly some good resources on Youtube to learn about dividend investing. Armchair income is one of them. There are several others. But please read the fine print before you make any decision with your FA.

Interesting-Fuel238

Dave Ramsey made your same argument, that if the long-term return of the S&P 500 is 12% (it's not, that is the average not effective return but won't have that argument) then why should you only withdraw 4% per year? He made an argument to withdraw 8% (which is in line with historical returns and what a licensed FA might normally project). That said, the problem with both is that it only looks at average returns not effective returns. If 2001, or 2008, or 2022 happens early in your retirement and you are selling 8% of your portfolio when your values are down -15% to -20% you are going to have to hope for big returns for several years to catch up. There is a thing called a monte carlo simulation that takes actual returns and shows your performance based on various historical returns. Someone who retired in 1990 retired into a better market than someone who retired in 2001 so the 1990 portfolio might pass a higher rate whereas the 2001 portfolio would fail much sooner. 4% is considered the safe return in all historical scenarios, hence it is what we commonly use in the industry.

SupaMut4nt

Looks like FA Smells like FA Tastes like FA

procheeseburger

Keep X to pay taxes Put Y in a HYSA for an emergency fund Invest Z in $VOO. not FA.

Angels_Rest

You must have overheard us talking, yes, that is exactly the case. Seriously though, she saw my returns at Fidelity and was rather disappointed with her own. She really didn’t pay much attention and trusted too much on her own accounts. It’s a different language and the comfort level with self management was never there. I agree with many comments about expectations and discussions with the FA about risk appetite and so forth. After reviewing all of the investments that were made, she has decided to sell the non transferable investments and have all of the accounts moved over to Fidelity. Her own decision. Yes, we may be in the midst of a needed correction given the run-up that has occurred and she is prepared for that.

Fun-Veterinarian-401

Like I said it probably varies on the advisor. But that goes for any financial advisor. Some are going to be engaged and communicate with you and actively study the market, others are going to follow whatever investment program they subscribe to so they can spend the rest of their time hitting up customers. If you FA is more of a salesman than an advisor by all means find someone new.

ediiisoon

damn reddit is this how you plan to make money [u/ChubbiesShorts](https://www.reddit.com/user/ChubbiesShorts/)•[Promoted](https://alb.reddit.com/cr?za=UCycW4GuUD1frVVKTJAaxreHQdPzMdNy_BIi4R2zxghtVuKPzxiJjVbz-wpcYt5Qmg8wcLDCGhPT9K2LGuipRHDtr-hGzQtXFqPQUUJxRX3cPjFB6kOImQIW8S4IduXROdG9YOlSROEludZBVY1C6wlcgbyI6wdbiz9dfhg4k5_Rkv5aRzHb5phR4-8w4u-Fz3I3yndTnIQoyygWm8X7Dlzeoj_lWtl5XX-Vw6ybSnN_LcxOLpU5BgepvvJkuoKl0RJnoBQLgDfpwy5O8J-WqQCF1xi0RxG3v2Xm3tzkv3li-4PEXEzYfFvCbUrgI3rBkkTT7M_sWYmZ3hWShgFyGvUIfj9mnAJhvWemjeeLn1U10_ppxG7VwOTJR43DUcqZ5SbojBFp5YduJurXrRbvf1cbdy86x77OreezwphezGo4aTgI3BCW8FA3ucqWuVP4knQdsNZ0AZQsCw&zp=XVpJaIXSrwcxoS-WZtkF3-7H5g-BJZ6FlxBcjeznuVfQjMz38Gklyv0ZeKadOjm0SXZjt9mI4vvmBOKSbSPx37knmgBo53aNF-VNx-Zt4kCR8_sXA1d8-3nS5hB3z92j9Z3qVddmKiPbgzaLO3t_NKyTkfsazvwmn6yIhS1rX-7n3mS_NMa1eExtUPKR_Ch5kmyO4WUbxJD9oUZjDs48SddON1bSobK5vNbavZsCKDCv7RXTXl9sjWoLCKcWJEtu52iD5Qbtgv4dAK9yiNQwoCRmVy6nybl97dooeTht7Pg)[Side effects of new Chubbies may include: perpetual smiling, increased high fives, and that Friday at 5pm feeling.](https://alb.reddit.com/cr?za=UCycW4GuUD1frVVKTJAaxreHQdPzMdNy_BIi4R2zxghtVuKPzxiJjVbz-wpcYt5Qmg8wcLDCGhPT9K2LGuipRHDtr-hGzQtXFqPQUUJxRX3cPjFB6kOImQIW8S4IduXROdG9YOlSROEludZBVY1C6wlcgbyI6wdbiz9dfhg4k5_Rkv5aRzHb5phR4-8w4u-Fz3I3yndTnIQoyygWm8X7Dlzeoj_lWtl5XX-Vw6ybSnN_LcxOLpU5BgepvvJkuoKl0RJnoBQLgDfpwy5O8J-WqQCF1xi0RxG3v2Xm3tzkv3li-4PEXEzYfFvCbUrgI3rBkkTT7M_sWYmZ3hWShgFyGvUIfj9mnAJhvWemjeeLn1U10_ppxG7VwOTJR43DUcqZ5SbojBFp5YduJurXrRbvf1cbdy86x77OreezwphezGo4aTgI3BCW8FA3ucqWuVP4knQdsNZ0AZQsCw&zp=XVpJaIXSrwcxoS-WZtkF3-7H5g-BJZ6FlxBcjeznuVfQjMz38Gklyv0ZeKadOjm0SXZjt9mI4vvmBOKSbSPx37knmgBo53aNF-VNx-Zt4kCR8_sXA1d8-3nS5hB3z92j9Z3qVddmKiPbgzaLO3t_NKyTkfsazvwmn6yIhS1rX-7n3mS_NMa1eExtUPKR_Ch5kmyO4WUbxJD9oUZjDs48SddON1bSobK5vNbavZsCKDCv7RXTXl9sjWoLCKcWJEtu52iD5Qbtgv4dAK9yiNQwoCRmVy6nybl97dooeTht7Pg) hahahahahahah pathetic

Traditional-Cup-5366

Do you know how much you are paying to have your money managed? Nobody will care more about your money, and the return on your investment than you. If you have a $1M portfolio, your FA probably collects around $10K per year.   Given that both Fidelity and Vanguard offer investment options in the neighborhood of $500 or less  per year, are you getting your money’s worth for the rest?   The fact that you don’t really know whether you are getting a good return isn’t a great indicator that your FA is doing their job properly from your point of view.

HossBonaventureCEO_

Superstition trading is way more accurate than FA or TA. Voodoo doctors should stop doing witchcraft and trade options instead.

my_name_is_gato

Isn't the S&P 500 a basket of mostly losers? To get in on the Nvidias, you have to own a boat load of companies that are bound to fail. It's an approach that leads to obscene valuations because market cap weighed funds. At its peak, Tesla was soaking up a huge amount of inflows from simple index investors that probably would have thought Tesla to be overvalued or was representing too much of the index. There are many reasons why most retail investors are better off long term with low cost index funds. They aren't willing to do market research, FA, or monitor their positions frequently. For the investor who wants to DCA a portion of their pay each month into the market for decades without needing to worry about it, monitor/rebalance, and wants growth with surprisingly little risk when looking at a timeframe of several decades, any major index is a decent choice. If an investor is willing to analyze companies, check their positions frequently, and has the risk tolerance, selecting individual stocks is better imho. The "cost" of index funds is capped gains because there is such a thing as too much diversity. SPY or even QQQ can be too conservative for some investors. Making about 10% a year on average is ok, but doubling invested money in a year, especially early in an investor's career, is a game changer. That isn't going to happen with a bag of 500+ companies.

pylorih

If your father owns multiple properties then he should work with an FA on how to manage the large cash position.

DeeDee_Z

You need to come to grips with what a Financial Advisor does, *vs.* what an Investment Manager does; and first thing on that list is that IM is ONE PART of the role of a good FA. Most people here think they can do IM just fine; and in the beginning, most of them are correct. But, there's LOTS more to being an FA, which you may or may not need right now. SO: hire the services you need. If you don't need tax planning, estate planning, retirement modelling, and all that stuff ... then No, you don't need a Financial Advisor. If all you need is help with your investments, you can get all the free advice you need from reddit.

rackoblack

If you're close to retirement and just now benefiting from advice on sites like this, then you're probably not really close to retiring at all because you messed up. I assume the masses here are not that but instead are under 40 and can greatly benefit from advice here to either start right or improve early enough to make a difference. And nearly everyone, EVERYONE, in this boat should not be paying for any advice at all and rather just investing in low-fee equity indices. Hence, the anti-FA bent this site gets, and rightly so, IMO. This isn't hard to do in the accumulation phase. Not at all. So why pay for someone to do it?

Zuezema

> Hey, I really appreciate the sincere and detailed response here. Especially since my original comment was more than a little dismissive. Before I really got into the industry I completely agreed with your sentiment in every way. So even though it may have been “dismissive” I feel like I knew exactly what you were talking about. There was no offense taken what so ever. > I think this confirms my hypothesis . . . I would say so. Obviously one needs to get the full picture to give accurate financial advice but I would say you’re in a good place without an FA. There are 3 main reasons I would recommend an FA to someone under 30 or around that age. 1. Your parent is our client so typically we are working with you for free or at a severely discounted rate. Most of our 35 and under children of clients we put into index funds for them for free. They still have access to all our services as well. 2. You have difficulty staying disciplined and you need someone to “coach you” to safe 3. You have an incredibly high income / assets And have more money than you could possibly know what to do with. > My personal experience with Morgan Stanley, Schwab and how sales-ey the experience was put me off from FAs. It really felt like for how simple my situation was, they really really wanted to get a hold to manage my money. There are a lot of people like that in the industry. If that’s the vibe you get I would definitely listen to your gut. > I guess my one final thing is that, I imagine most people on this subreddit are people with a net worth <200k. Based on that guess, I can't imagine their situation being so complicated that an FA becomes so worth it, and that 1% starts the outweigh it's benefits. I imagine that feeds the typical boggle-head+redditor arm-chair investor attitude to dismiss any kinds of positive concepts about FAs. I would tend to agree. In also honesty I would not want most of those people as clients as well. If a prospective client says some variation of “ what’s your average return compared to the market” I know that we are probably not a good fit. As I mentioned before plenty of our younger clients have returns exactly at or right around the market. For our older clients that is rare. We have one client right now that only wants a 25% exposure to equity at 60 and she is not retired yet We give our recommendation but ultimately the client makes the decisions. > Again, thanks for taking the time to engage. It's rare to get this much thought in a reddit response these days, so I really appreciate your insight. Certainly welcome. It’s something I enjoy talking about and we just seemed a little bit too similar for me to read past it.

Valvador

Hey, I really appreciate the sincere and detailed response here. Especially since my original comment was more than a little dismissive. I think this confirms my hypothesis that it becomes a bigger deal once your financial complexities grow. Considering most redditors on the younger side (myself included, I'm in my 30s) chances are your financial complexities are pretty simple. My complexities are more complex than the average redditor, but not enough such that I'm willing to pay 0.8 - 1.0% of my managed amount. I imagine as I get older, have kids, property, potentially a business it will make more sense for me to not handle this kind of stuff myself, but right now it's something I would rather keep fresh in my mind. I've been emotionally resilient, but watching a weird market dip even though the money I need in the next 5 years is safely in Bonds/Treasuries, still gives me some emotional impact. My personal experience with Morgan Stanley, Schwab and how sales-ey the experience was put me off from FAs. It really felt like for how simple my situation was, they really really wanted to get a hold to manage my money. > A bit of a side note. I see a lot of people on this sub (this is not a jab at you, just thought you would find it interesting) that recommend things that would get me flagged by our compliance teams so fast. People don’t realize how regulated of an industry it is until you are in it. You're not wrong. I've only been on this sub for the last year primarily just to learn more after I was disappointed about FAs I've been talking to. It's helped me get exposure to things I wasn't thinking about an vehicles I wasn't aware of, but it's only really been helpful because I'm skeptical enough to consider most comments aid here as bullshit. And you're right, the vehement anti-FA attitude and "just VOO/VTI/Any Other Broad Market Index an chill" comments without context are often not helpful. I guess my one final thing is that, I imagine most people on this subreddit are people with a net worth <200k. Based on that guess, I can't imagine their situation being so complicated that an FA becomes so worth it, and that 1% starts the outweigh it's benefits. I imagine that feeds the typical boggle-head+redditor arm-chair investor attitude to dismiss any kinds of positive concepts about FAs. Again, thanks for taking the time to engage. It's rare to get this much thought in a reddit response these days, so I really appreciate your insight.

Valvador

Right, I agree with you there. People like to act like parrots. They hear and idea they like and then just repeat it without understanding context or application. Unfortunately, the worst thing about this subreddit is whenever someone is asking about their portfolio and it's 100% stocks, there is very rarely someone asking when this person is going to need that money. But again, is the solution for all of those people to get FAs? If all you're doing is getting someone to manage your portfolio because you're an idiot, why not stop being an idiot? I think this is also where that anti-FA advice comes from. So the question becomes "how many people are impossible to teach that an FA is basically their only choice"

Valvador

> But to say that nobody needs one is just insane. The vast majority of people absolutely SUCK with their money. I mean you're right, but chances are if you're on reddit and you're asking questions and wanting to educate yourself you are probably heading in a direction where your situation does not benefit from an FA. So does it really surprise you that a lot of folks on /r/investing tell you that FAs are dumb? It's because people here are mostly hobbyist boggleheads. On the other hand if you go to /r/personalfinance you will see more and more people who mad extremely bad financial decisions, and I would imagine you would get a less hostile response to FAs there. Most people have a hard time seeing humanity beyond their own reflection, so if they don't see the need its hard for them to imagine how someone else does. The tricky problem comes once you have people who are bad with money, but would benefit the most from an education about money and investing, while also being the most susceptible to a bad FA taking advantage of them. Is it correct to say "these people are dumb an emotional and should not be trusted with an FA" or is it better to say "FAs aren't worth it, you should really educate yourself". I honestly don't know... But chances are, if you're on reddit, and you're asking questions, you probably want latter. Just my two cents.

Valvador

Okay so I originally asked "What NetWorth does an FA become useful", this was probably the wrong question because no one could answer it sufficiently. At what level of financial complexity is an FA worth it? Is it: * When you're running your own business? * Have multiple properties? I think the issue is that FAs, when it comes to most people really are just portfolio managers because most people's financial situations are simple. But whenever I ask under what conditions is it useful, no one has a good example or qualification. It all comes off as a "just trust me, bro".

pylorih

Get an FA that has tax accounting under neath its umbrella. It will cost more but you won’t see this issue.

Lazy_Cattle

But not FA, I’m gambling as always 👍

ilikebunnies1

You’re in here saying you don’t know FA about options and are new. Yet you’re saying things like this when someone doesn’t agree with your thesis..

Greenbargo

So you are saying that the reason FA does not work all the time is because people aren't working hard enough? As you have said yourself there are entire hedge funds just devoted to researching companies and like you also said they do worse than the market average over the long term. Why then would anybody do FA knowing that people who invest far more time and effort than you ever could aren't able to beat the system? GME is still worth 10X what it was before the short squeeze so a whole lot of people have made money off of what happened not just one person, and this gain was not just in the short term as the squeeze happened years ago. I know Warren Buffet is one of many FA investors, that is why it makes sense to me that he is just the one that lucked out. If he was the only one then I wouldn't think it was luck. He is the end of a very large bell curve with many more losing money along the way. >Start using screeners and looking up companies under the same guidelines, and I guarantee you over a 20-year period those stocks will outlast trend companies Where is your proof? Why should I believe that there are these objective metrics hidden away in a company that if properly analyzed tells me which company's value will increase in the future? Clearly screening stocks for certain criteria cannot reliably produce positive results or else everyone would do it thus rendering it useless. There are many many companies who were predicted to do well 20 years ago but are now far smaller or bankrupt. There is endless records of 'objective' FA based predictions being way off. Just like you said, only a very small percentage beat the market average. Can you give me a single reason why I should suspect these 1% are anything but the end of the probability bell curve? If FA was real there could be a scientific test to show that it works and that whenever its principles are followed money is made, but we both know that this has never been proven. If something cannot be proven why would I believe it has any value, let alone rely on it for my financial future?

Leungal

Enable 2FA on your accounts and don't allow your device to be remembered/bypass 2FA. Not only is that a good thing to do from a security perspective, the added extra step of having to get an OTP or SMS verification code to login makes it much harder to impulse check.

WhoGotDaKeys2MaBeema

First of all, it is neither simple nor predictable. It can take literally days or weeks to go through a full work up of a company. You can't say anything in the market is predictable. It could be a sound investment at the time, and something can change for the worst. The whole point of doing your due diligence is to mitigate your losses. If a company fails because it has too much debt that it cant pay off then thats your fault for not looking at the companys books to see that it has too much debt and you didnt properly go through the steps. Nobody can predict the future but the whole point of FA is making sure its not a guess at all. You know Warren Buffet isnt the only FA investor right? Its funny you bring up GME because thats the precise stock FA investors wouldn't touch with a 2,000 foot pole. GME is a prime example of trend following the FA goes against. Think of all the people who lost money. Only 1 guy made all of the money by artificially pumping the stock higher and higher by posting it. Technically, he didnt do anything illegal but he created hype and got a lot of people involved so he could make a lot of money. He used the Cramer effect. Its also funny you mention AAPL. Berkshire Hathaway owns a shit ton of AAPL. Look who lasted long term regardless of who moved how much over any time frame. Its all about the long game. Its more common sense than anything if you read his book. Start using screeners and looking up companies under the same guidelines, and I guarantee you over a 20-year period those stocks will outlast trend companies. This is not to say its the only method to making money. Its a strategy where long term is the goal. There are other strategies as well and any good investor should be able to look at any company and come up with their own strategy. This is difficult for most people to do. Look at hedgefunds.. all these guys are managing peoples money and less than 1% actually beats the market. If you are lazy just index fund your money and you're already beating 99% of hedgefunds.

Greenbargo

If this were all true then why wouldn't everyone do it? If fundamental analysis was really as simple and predictable as following along with steps from a book then why isn't there a shred of evidence that FA based investing earns more than investing in the market average? If there was really a way to find out a company's 'true' value then everyone would be using it and so its 'true' value would match its stock price. Assuming this is the situation, there is no benefit to doing FA since the stock's price already reflects the actual value of the company. If Graham or Buffet discover a stock is 'undervalued' based on their FA (even if the methods of their FA are somehow kept secret from the world), it wouldn't matter since to earn money they would need others to invest in the stock to raise the price to the target they believe the stock is really worth. If others believed the stock should be worth more then that would already be the price of the stock thus rendering their FA pointless. My point is this: either there *do* exist criteria for accurately analyzing a company, which means the criteria would be known to all rendering them useless; or such criteria *do not* exist and FA can only be guesswork. This reasoning all stems from a fundamental understanding of the stock market pricing mechanism which is that stock price is not determined by a company's profits, its books, or its board personnel, but rather entirely by market demand for the stock. I have yet to be shown a single piece of evidence that ties a company's success to its stock price. Sure, there are cases where the two are correlated but there are also many cases where the two are not. One example off the top of my head: GME saw more of a rise in its stock than AAPL even though AAPL's profits increased far more than GME's. Many stock prices plummet even when the company is doing just as well as it did last quarter. This leads me to believe that the only way to predict which stock will do well/is undervalued is by knowing what the market will think tomorrow which of course nobody can predict. The only point in defense of FA I have seen is that FA can proxy the future desires of the market but for this I have also seen no evidence. Hence, I do not see how FA could ever produce results better than just guessing.

Aggressive-Donkey-10

1% fee costs 31% of total portfolio return over 40 yrs, regardless of annual % returns of portfolio, so left with 690k not 1 million after 40 yrs etc. 2% fee costs 53% of return, 3% fee costs 68% of your total return. you see a doctor b/c they know more about health than you, a mechanic b/c they know more about cars than you etc. Finance is not like the above, as any deviation from "buy the whole market" will over a long enough time sample always get you a worse return, and much worse if you pay for the privilege of such deviation from a total stock or total bond fund. Your dad needs your help, get him to fire the FA, then you can direct him as to how to invest his funds, given his proximity to retirement, perhaps a 40/60 VTI/BND, there are dozens of ETF solutions, all will be better/simpler than whatever the FA has concocted to bilk your dad out of his remaining life savings. William Bernstein "The four pillars of investing" said something like the financial industry should be best analogized to dealing with a group of hardened criminals. (not harsh enough)

thee_jaay

Nah. There is a couple day holiday period after Ramadan. Probably around at the 12th to 14th. However, Israel will likely strike a few times between now and then, basically daring them to FA and FO.

pinklobser

Fuck that shit and buy MRIN until $1 (not FA)

BroTheGhost

sounds like FA?

UsuallylurknotToday

Bears need financial advisors but there’s no value in getting an FA when your net worth is 120 bucks, a lifesaver mint, and some pocket lint. *It’s a shame really…*

UsuallylurknotToday

I’d tell you to do the same but I don’t think there’s value in getting an FA when your net worth is 200 bucks, a lifesaver, and some pocket lint.

sojithesoulja

I question that heavily. I know a FA my family uses through Bank of America (I don't use them). And they've been defensive since March 2021. God damn conspiracy at this point. Supposedly fiduciary but really does that just mean we go with what the bank tells us to do (their a smaller private client group).

cdude

Your browser doesn't just auto suggest a phishing site out of nowhere. You either clicked on a link or downloaded a bad app. Combined with the fact that you recognized the errors and still called the number and still didn't realize that it's a phishing site means you need mandatory cybersecurity awareness training. Seriously, go turn on 2FA on everything and start changing passwords. And take that training.

ScrewWorldNews

Amazing that those idiots are incapable of using a spell checker, much less asking ChatGPT for help with the message... I hope you have 2FA configured in your account. If not, do it.

TLable

Albeit nice work on DD, love the FA is put to use. That being said. That is in the event that their holdings in their portfolio are the same & not profit taking after years end & while their portfolio holdings were dropping. This is an unknown unless you know currently their portfolio history and current holdings.

ted-clubber-lang

People should short FA. This company is fucking doomed.

Aceofspades968

1. With interest rates so high. Using your $100k for a 15yr mortgages gets you a lower interest rate and higher down payment which can equal lower monthly payments. 2. Depends on what you’re planning to do with the money and when you need it. There are a lot of options. 3. FA’s do a lot more than just manage your retirement accounts. FAs can also do better than you alone. You can easily match a cookie cutter managed account - liked you get from a bank. But a good FA can get you an extra 1-5%. Especially if they have a specific goal in mind. But remember. They aren’t all good. You want wealth management not financial advice. Honestly It sounds like you need an estate plan. In which case a good FA is part of the team. 4. The statistics say the longer the money is in the market the better the return.

Admirable_Nothing

By the time he made that statement the stock price was back below $5 which had pretty much been its natural state. I had a client that was one of McNeely's direct reports and had a million shares that he sold at $60/sh. And he was smart enough that he wouldn't let his FA invest in anything but CDs for the next few years.

Domicile_Exaltation

I am an athlete and like Under Armour's products. Like but not love. Your post makes an interesting case, which is far more than the vast majority of these types of posts. I'm a TA guy, not a FA guy, though, so if the TA turns around, I'll give it a look.

Bowlingnate

There's two forms, or really three forms of maxing. - The IRS limit for normal people, which many have mentioned. Different if you have a Roth 401K (which is about income and taxes, almost....entirely.) - The IRS limit including catch-up contributions, a limit which kicks in, when you're closer to retirement, it's possible you have less debt, and it's possible you may or may not be earning more than you did earlier in life. So, you can save more. - More behavioral, is the employer match. Contributing whatever it takes so the employer will put in the maximum amount, because it doesn't count as income, and once it vests, it's....free money. Not the most tangible for some, for some it's hard to attain, and it's a great goal for folks managing tight budgets. So the common advice, is to max your early contributions/match, and for folks who can save, don't have a ton of risk, balancing the actual IRS limit (if it's a problem, at all, for some it's not and talk to a FA...) compound interest means early dollars.....are almost always....withdrawn. i mean, more impactful. Withdrawn. More impactful.

Successful_Wedding82

Robinhood, Facebook, paypal My passwords have appeared to be a part of a data leak.  I have about an hour left of driving until im home. Think my 2FA will protect everything until im able to change my codes? 

Mitsuka1

Mate. Not FA obvs but you can dollar cost average those down without much extra cash. Up to you to decide if you’re comfortable to DCA or if you wanna put the loss against your taxes. Sunk cost fallacy and all that… But for ex. suuuper simple math (not taking broker fees etc into calc) but if you bought 10 more shares @$8 each that’s just $80 bucks, yeah? And now you own 11 shares at an average cost of approx $44/share. Bit less painful to look at lol. Lost opp cost of that $400 not earning you anything for the past few years and the money you now plonk in to bring your avg down to something potentially workable, is your “lesson learned fee”. You’re in an easier position than some dude who yolo’d their savings in, bag-holding 1000 x $400, where poor bastard not only sunk in all significant cash they had already but would need to come up with an additional $8k just to bring their average down to the same 44 odd bucks you can get yours to for the price of one decent dinner out... throw dinner for two and a bottle of wine at it, and you’ve got your avg down to ~$27/share. Again, simple math here your broker is gonna charge you fees so up to you to figure real costs and decide how you wanna roll with it. 1) skip the daily Starbucks, DCA in @ a few shares a week for the foreseeable future till you’ve got that number down close to the price of the day (broker fee plays into calc for how many a week vs per trade costs). The caffeine withdrawal headaches will be your daily reminder to do proper due diligence next time lol. Or 2) go balls deep the Florida thing ya’ll keep mentioning here is gonna come through sooner than later & drop bigger chunks asap esp if you think it won’t get any worse. Like another $600-800 in, and exit with a small gain if it pops, hopefully at least enough to cover the cost of the 2-3 trade fees and a bottle of cheap vodka to toast your exit 😂 Heck you could even go full regard at this point while you wait and pray for the pop, and start selling covered calls 😂 So yeah, bagholding sucks but getting yourself into a much better position to be able to eventually sell for a small profit if it does go up someday is way cheaper when you only hold so few shares👌

ScheduleSame258

Intel: Here, take your FA and shove it up your ass.

Glittering_Bill9176

Except the IV is being traded off the options prices and FA doesn’t give any direction because the underlying is worth 0, so the actual price is purely speculative. Like it’s not even trading with delta lmao. The IV has barely moved since I bought it 🤪

azmus

It’s never worth trying to be the smartest man in the room unless you are the smartest in the room doing FA. TA wins & Elliot wave theory is #1. Watch for the completion of this bear cycle at $4.15

chromaticShade

I have rarely had issues making good risk-reward swing plays on a longer timeframe using FA and very systematized TA together. In fact, there have been times where it has actually saved my butt when I have been in tough financial situations. However, in my experience the shorter the timeframe the more important it is to make objective and extremely precise decisions; small but quickly reoccurring inefficiencies can destroy your account especially on a day trading timeframe. The epiphany I had recently about the road to consistency is the topic which 99% leave unspoken in this thread and, in my opinion, is the reason most lose their money and why there is any profit to be made at all the lower the timeframe. Everyone always says you have to have an edge. What is an edge really? How do you know you're not just guessing? Did anyone ever beat the casino playing by their rules? If everyone played the game logically there would be no money to be made.

Nice-Zombie356

Thank you. Part of why I've kept an FA (or now two :-) is for times when I am struggling to understand rules around retirement accounts, tax implications, or other questions that go beyond basic diversification and Bogglehead stuff. I appreciate the idea of potentially using the Schwab staff FAs or even paying them for extra support.

LiquefactionAction

Yeah I was trying not to get too lengthy. Definitely DO NOT rely on Google's built in password manager. It's easily hacked and not secure at all. There's also been some.. weird stuff happening around the internet recently to various people that I know, I'm kinda becoming skeptical that there isn't some kind of google password manager breaching or some kind of thing that can get info out of it. But overall secure passwords are less important if you use 2FA/MFA cause at least you should get notification if someone is logging in. I consider the era of *"just have a secure password!*" to be largely el passe wisdom myself, it's one of the least important things to do for personal security compared to everything else.

ptown2018

If assets in different taxable status (pretax vs Roth vs regular taxable accounts, then different assets work best in different accounts to reduce taxes. So a good adviser needs the full disclosure. That said they should be okay with working around your other accounts, if you have pretax accounts in boglehead type allocation they could work with the after tax part to provide diversity and tax free growth. If too greedy to accept 1 million AUM at 1% fee then that tells you their biases, find someone else. I dumped my FA not because of their fees but because they did not beat the benchmarks and my self managed accounts doubled the return of the FAs managed accounts. A plan would be beneficial, look at things like paying off your primary residence, health care cost pre and post Medicare, Roth conversion to minimize RMDs, etc. but a fixed fee advisor probably would be more cost effective.

beckhamstears

That FA is licking her chops, wanting to get another mil AUM. It'll be no extra work for her and double the fees. Sales pitch incoming. And I bet it's a big emotional play. She senses your vulnerability.

Vast_Cricket

You can use one broker compete for another. All of them want you buy funds or research portfolio with high expense ratio. I have no personal issue if your investment print better than market indicies. 12 years ago I was less sophisticated and would take my wealth mgmt FA suggestions. Her fee was 0.75% later I learned one research account had 1/3 in cash. That cash was lend out to others by the research llc at 9-10%. I ordered a stop as soon as I figured out the motivation. Because that portfolio has been frozen for 2 years with no trade I began to experience some losses that they could have stopped by trading. I still have 15% managed by her. Technically I am not qualified to do business because I transferred several funds lately to reduce expense. I know as much if not more than most FAs. Whether it is margin, option or bonds. I have her on a retainer since I need to check with her sometimes. Her strength was in bonds. But last 3 years I do good in bonds also. At least here folks agree with me and ask my opinion frequently. I do have another FA in name only. He actually asked me for personal adivices and I believe my portfolio return is better than his own. I use wealth mgmt to fend off forced purchases such I remain independent. By DIY I have merged and reduced 3 figure stocks which was way too many.

btweber25

If you have access to a Bloomberg it's under FA>Segments>By Measure, breakdown of revenues, profits and margins by segment.

BiologistBro

FA here. I could give you lots of reason why you should be transparent but I’ll give it a shot at answering both 1 and 2. 1) If you want to gauge how the advisor treats when she thinks you have a “small” amount of investable assets, then refrain from sharing information on any assets outside of the account under her care. You’d be surprised how much advisors are naturally prone to segment clients by assets under management or total revenue opprotunity. 2) No I often see clients with two sets of advisors in the $20mm+ space. It forces both sets of advisors to be at the top of their. They know they can lose you at a moments notice because they already have like-titled accounts and a relationship across the street. It does add some potential issues (wash sales, rmd’s, etc) but those can be mitigated with cooperation between the 3 parties.

Mrknowitall666

So, first, you're talking some internal at an FA. Because, the client facing FA doesn't have time to talk to wholesalers. And, you don't know anything about financial planning either.

zhiharng123

Oh and also options are time wasting asset/instruments, really get your TA and FA down first and practice with a paper account and stocks before using options. Alternatively u could just all in your savings on a 0dte and pray. (Hope u are ready for wendys)

allbutluk

Itt: people no idea what an actual competent FA does and think their 100k portfolio or 80k salary is comparable to a person with millions or earning 250k+

gnocchicotti

As opposed to firing my FA at the bottom and getting a new one who tells me they will invest in gold and farmland to protect my wealth from dropping further? Either you can handle market fluctuations or you can't. Just a question of allocation and risk tolerance. Index investing is great for this because it can take the regular decision making out, which is where people often hurt themselves.

rickle3386

D Full disclosure - I am an FA. I don't have a set way of doing things / pricing model. Charge planning fees, manage money via % of AUM, receive commissions on types of products. Depends on what I'm doing for the client. In any case I'm their FA. In many cases I've become their "personal CFO" and help them think through basically anything financial. You'd be surprised by how many people ask me about buying vs. leasing a car, which accounts to use to fund, how to pay for college (cash, liquidate stocks, heloc, etc). The Plan itself I find to be kind of useless (I'll do it if they want one) as it's just a snapshot in time within a very fluid world. No such thing as set and forget.

PokeyTifu99

It's all good. Digital ID and 2FA for all is coming. The Era of cybersecurity devs being underpaid and turning to fraud is starting. Your about to have thousands of devs laid off and you better believe they ain't gonna stay white hat for too long before bills come down.

revcaves

I talk to financial advisors for my job every single day. Most people on this subreddit know more about investing than most FA’s. Unless you’re getting in moving qualified money or trusts accredited investing ect stay away from them. You know your needs and you have YouTube and google

chooiiiii

This is strictly my opinion. FAs come in all shapes and sizes. Can a really good financial advisor be worth $375/hr? The answer to that specific question is yes. But you are not their target audience. Their target audience are HNWI, and they can justify the charge because of complications in dealing with HNWI. Do the majority of FAs justify that pay? No. Most FAs, especially those who are ‘self taught’, have no or little clue what they are spouting and they often aren’t worth that amount of money. Generally, people like you and I would be better off researching on our own and doing DIY investments than to hire an FA.

Low-Ad-1574

Jesus Christ OP please just go talk to a new FA, for you, it’s worth paying the 1-2% fee he’s going to charge you. Trust me

SeaworthyGlad

Regards, I think the bottom line is you can invest better than the FA. You should pick 5 or so stocks and just go with it.

Discount_gentleman

Beautiful illustration of dealing with a fabulist here. They said they only were investing 30k with the rest controlled by an FA, but the moment you injected the idea that a real hustler would dump 100k into gold on whim, they suddenly remembered that is exactly what they had done!

Minute_Quote_8496

Yeah. I will agree with the folks on here about FA. They don’t have any insider knowledge that’s not available anywhere else on the internet. All they do is invest in index or managed funds and take a %. Not cool over the long term. Adds up quick. As long as you’re willing to lose money you’ll be fine. Trust me…. 😈😈😈😈😈 buy dips, sell when you make some money, and don’t be too greedy. Plenty simple way to stay green

Massive-Rock-8294

Thank you like leave this independent woman alone. But yeah the crux I’m at is I’m faster to invest on something than my FA and then don’t know what to do with it. Honestly I think my best bet is to get some like 29 year old dude advisor and have a more open line of communication w him I don’t mind/ notice the fees. Actually yes I mind them.