I agree with the general view that, as cman put it, this planner sounds like a used car salesman. For two reasons: the annuity suggestion and more importantly the pressure to invest now.
However, I'm not ready to condemn the rest. Had the annuity suggestion come with a discussion of how income might be coordinated with Social Security, how much was needed at what time, this could have been a reasonable discussion and proposal.
"In this day and age", people are getting pushed into wrap accounts, typically costing 1%/year. Compared to this, a portfolio of American Funds A shares could look like a positive bargain. The front end load, once paid, is done with. If you switch from one American Fund mutual fund to another, there is no additional charge.
Further, the family seems to give breakpoints based on total AUM (excluding MMF), not just investment in the fund being purchased. It shouldn't take many years before an American Funds portfolio (A shares) comes out less expensive than one managed as a newfangled wrap account.
The shares the planner was recommending were A shares. These have a 3.75% (or less) front end load. B shares are no longer offered by American Funds.
The fact that 3.75% was mentioned as the load for these shares says that we're talking about less than a $100K total investment (across all American Fund mutual funds). Because that's where the load drops to 2.5%.
I'm curious about the 75/25 recommendation. That's more aggressive than "conventional wisdom" suggests. Not that I necessarily disagree with it, but rather that it could suggest that the friend needed hefty returns for retirement. But that seems to contradict the comment that she was in good shape due to the life insurance policy. Perhaps this indicates the planner wasn't paying attention (which would be enough to rule him out), or perhaps there are other issues we don't know about.
In any case, it sounds like there's a fair amount of miscommunication going on.

@jlev. Good new, if true. After you do the research, perhaps you should ask to have a discussion with the CFA. Make sure about the loads. Make sure about lack of churn. Then ask, why so many funds? Is the CFA being mandated by his firm to buy many funds? What is the CFA's investing philosophy?
You'll get lots of opinions on the boards, but I like to keep as few holdings as possible. If I have more than 4-5 funds (easy to do hanging out here), I start looking to pare back.
I think it is just great you are doing this due diligence. Thanks for sharing your concern and what you learn from it with the board.

A friend recently decided she must do something investment wiseOAS she has had her money in CDs for years so she went to an advisor/planner. Her husband, my former best friend, died 6 years ago and she is alone.
She is 57, would like to retire in 10 years and has no debt. Judging from what my buddy told me before he died, his insurance policy would leave her well off.
The planner is trying to pressure her into making a decision within a couple of weeks telling her she would have been a lot better off if she would have invested back in 2009.
First he suggested annuities but after doing some research she decided she doesn 't want to go that route.
She told me today one of the funds he suggests is American Funds American High Income Trust Fund (B grade I think). I don't know much about it but it has a decent 10 year average of 7 per cent. She would have to pay a front end load of 3.75 per cent which makes me think it's not good for her.
He told her a ratio of 25 percent bonds and 75 percent equities would be best. I think she would be better talking to Vanguard or Price for advice.
I am a friend and only want to give her a little advice and not get too involved.
Any suggestions would be appreciated.
Thanks in advance.

I can tell you that 75% of the portfolio is in taxable accounts because it is inherited money. The remaining 25% is in tax-deferred accounts (401K, Roth IRA, Rollover IRA). I'm maxing out my Roth IRA each year, but there's not much else I can do with this breakdown. As a result, taxes are a concern moving forward.

You mention that you're currently maxing out your Roth IRA but are you also maxing out your 401k?
The reason I'm asking is if you're not because you can't afford to, I'd suggest maybe taking some money out of the inheritance in order that you can.
For example if you're only putting in say $5500/year and can't afford any more, take $12k/yr out of the inheritance so that you can up your contributions to the max. That way you'll have more money in a tax-deferred vehicle and might not pay that much taxes on accessing that $12k. You didn't mention what form the inheritance came in (i.e. stocks, mutual funds, etc...) but if they were in any of those you'd get a stepped-up cost basis so the taxes owed on the money likely wouldn't be that much.
Just something to think about tax-wise if it applies. It won't solve your tax-problem completely but would help. I'd also suggest using some ETF's where you can as you stated just for the tax efficiency of them.

FYI:
Regards,
Ted
http://www.sfgate.com/default/article/California-drought-spawns-investment-opportunity-5321013.php#photo-6021950
M* Snapshot Of PGRNX: http://quotes.morningstar.com/fund/f?t=PGRNX&region=usa&culture=en-US

@msf Here is the wording regarding fees that I see:
"We receive service fees from Fidelity for various custodial support services we provide, which are based upon the amount of NTF funds and total client assets held in custody by Fidelity. When support service fees are generated by retirement plan assets, we offset these fees against the account fee payable by the retirement plan."
This seems like the desired outcome you indicated, it appears from what I can read that.
Also, the wrap subadvisor indicates in its that the combined subadvising fee and CFP management fee, contractually cannot exceed 125 bps as a condition of being a subadvisor. Seemed like a good sign.
@charles looking at his decently detailed year-end summary and based on his input amounts and year end amounts it looks like the loads were waived. And the advisor is a IAR and should follow fiduciary standards I believe? I don't see much churn in general which would have perhaps suggested some of the EDJones issues discussed in that thread.
@cman There is more than just portfolio management to be done.
Other research to be done. I'm mollified about some things, but still need to do followups on other things people have mentioned.

Loads are typically waived for investments through wrap accounts. For example, quoting from the prospectus of TPINX, sales charges are waived for:

Advisory Fee Programs. Shares acquired by an investor in connection
with a comprehensive fee or other advisory fee arrangement between
the investor and a registered broker-dealer or investment adviser, trust
company or bank (referred to as the “Sponsor”) in which the investor
pays that Sponsor a fee for investment advisory services and the
Sponsor or a broker-dealer through whom the shares are acquired has
an agreement with Distributors authorizing the sale of Fund shares.

Of course the planner is receiving trailing fees (12b-1) from the funds. Not loads. An obvious tip off is the use of TRP Advisor class shares. These are shares with an extra 0.25% 12b-1 fee. Quoting from a TRP prospectus:

Advisor Class shares are sold only through unaffiliated brokers and other unaffiliated financial intermediaries that are compensated by the class for distribution, shareholder servicing, and/or certain administrative services under a Board-approved Rule 12b-1 plan.

The question I would ask is whether the wrap fee is reduced by the amount of trailing fees that the planner receives.
For example, here's Edward Jones' brochure about its Unified Management Account (wrap account) program.
"Fee Offsets. ... If we receive Rule 12b-1 fees for the shares in your account, we will credit the amount received to your account."

I agree with the general view that, as cman put it, this planner sounds like a used car salesman. For two reasons: the annuity suggestion and more importantly the pressure to invest now.
However, I'm not ready to condemn the rest. Had the annuity suggestion come with a discussion of how income might be coordinated with Social Security, how much was needed at what time, this could have been a reasonable discussion and proposal.
"In this day and age", people are getting pushed into wrap accounts, typically costing 1%/year. Compared to this, a portfolio of American Funds A shares could look like a positive bargain. The front end load, once paid, is done with. If you switch from one American Fund mutual fund to another, there is no additional charge.
Further, the family seems to give breakpoints based on total AUM (excluding MMF), not just investment in the fund being purchased. It shouldn't take many years before an American Funds portfolio (A shares) comes out less expensive than one managed as a newfangled wrap account.
The shares the planner was recommending were A shares. These have a 3.75% (or less) front end load. B shares are no longer offered by American Funds.
The fact that 3.75% was mentioned as the load for these shares says that we're talking about less than a $100K total investment (across all American Fund mutual funds). Because that's where the load drops to 2.5%.
I'm curious about the 75/25 recommendation. That's more aggressive than "conventional wisdom" suggests. Not that I necessarily disagree with it, but rather that it could suggest that the friend needed hefty returns for retirement. But that seems to contradict the comment that she was in good shape due to the life insurance policy. Perhaps this indicates the planner wasn't paying attention (which would be enough to rule him out), or perhaps there are other issues we don't know about.
In any case, it sounds like there's a fair amount of miscommunication going on.

@willmatt72
A note about the taxable status of the majority of the monies.
Add this to your list of things to do :) ......
Fidelity Personal Retirement Annuity
The above link is an overview with some other internal links and a short video.
This link is for the investment choices within the annuity.
Normally, I am not a fan of annuities; as sold by insurance companies. However, if our house were to inherit a sum of money beyond our current needs, we would fully review the above annuity plan in order to defer taxation. A few notes from my recall about this product......55 fund choices, no brokerage feature (so no stock, etf, index or other vendor funds available, except the few along with the Fidelity choices). The cost of the annuity is .25% added to the expense ratio of a given fund. No surrender or holding periods that lock up the money at a cost, as is common with annuities. Review the exchange restrictions among the funds; as there are limits as to how often one may move monies around within the annuity.
Fidelity is not the only company to offer a similar plan; but I don't have that MFO discussion at hand and short of time today.
The short term downside for this would be the taxation of the sale of current holdings in order to fund such a plan.
Anyhoo........perhaps something to review relative to your circumstance.
Take care of you and yours,
Catch

I had a similar reaction to the taxable account issue. (Glad you jumped in first to serve as the lightning rod :-))
To add a few thoughts here:
- VAs are a lot like nondeductible IRAs. They're not much good for tax-efficient investments. If one is using them for equity investments, I feel one needs several decades for them to pay off. Given the time frame we're talking about (say, 20-30 years), I might suggest limiting their use to bonds or perhaps balanced funds.
- There is another short term downside - you won't be able to get at this money for a decade without paying a penalty. Like IRAs, there is a penalty if you withdraw money before age 59.5. So while this can hold bond funds, it's not going to be useful for current income. It's value is more for stability - sleeping well.
- I'm not a big fan of Fidelity's VA. When they lowered the cost of the VA wrapper to 0.25%, they also changed the share class of several of the underlying funds - so they cost more. A couple of VAs that may be better are TIAA-CREF's, and Vanguard's.
For example, with Fidelity's VA, you can invest in PIMCO VIT Real Return, but the share class you get costs 0.65% (for a total cost of 0.90% including the VA wrapper). With TIAA-CREF and a $100K annuity, the wrapper costs 0.35%, but the PIMCO fund share class costs 0.55%, so the total cost is the same. And after you own the annuity for ten years, the wrapper cost drops to 0.10%. TIAA-CREF also offers 50+ funds; some in-house, mostly outside.
Vanguard's offering is, well, Vanguard. Mostly large, dull, inexpensive Vanguard funds, but then again, that's what you're looking for. Many of the 17 funds offered are index funds. While they offer conservative and moderate allocation funds, these are not clones of Wellesley or Wellington. Rather, they are managed in-house by Vanguard (not Wellington Mgmt) - they have the same team that manages Vanguard Star, and they invest in mixes of Vanguard index funds. But the Balanced fund in the annuity is managed by the same (Wellington Mgmt) team that manages Vanguard Wellington Fund.
One other VA to consider (if you're not in NY) is Jefferson National Monument Advisor VA. This is an unusual annuity in that it charges a flat $240/year (rather than a percentage of AUM). So for a $100K portfolio, the wrapper costs 0.24%. It offers a gazillion (380) funds, including some that are very low cost (e.g. Vanguard); however if the fund is very low cost, there's a transaction fee - just as brokers have NTF funds but charge TFs for Vanguard funds. The insurer is not well rated; this doesn't matter for VA subaccounts (since the assets are segregated), but does mean that you should think carefully before annuitizing or getting a fixed annuity with them.

First, anyone who thinks their financial planner is a professional and a good one should watch this TV commercial

CFPs, like real estate agents and masseuses vary a lot from charlatans to experienced experts.
The first red flag is recommendation of funds with loads. You need to ask if the CFP receives commissions from the funds. If so, walk away because, the CFP has a conflict of interest and will not be able to provide recommendations wholly in your interests.
If the CFP does not receive fees and is not lying about it, ask for justification of load funds when similar no load funds are available. The answer will be important hints to evaluate.
Next, unless the financial plan involves planning and continuous monitoring of all finances, taxes, estate planning, etc on a regular basis, an asset percentage based arrangement is wasteful. If it is primarily portfolio planning with occasional planning of other finances, look for a flat fee financial planner.
The number if funds is a more difficult question to answer even after the above issues have been resolved. It can happen due to historical reasons, brokerages used, what funds are available where, etc.
The financial planners themselves have their own strategies and biases which may include a large number of funds for one or more of the following reasons:
1. Some advisors limit the allocation to any one fund to a maximum percentage to manage systemic fund or fund family risks. This may require a number of funds for large portfolios. Too many funds with small allocations (<5%) might indicate a problem with the advisor.
2. Some advisors manage their own risks via diversifying rather than manage the client's risks. This is particularly true of advisors who have come from a fund management background than portfolio management. It is always a good thing for a money manager's career to have some well performing assets at all times than take concentrated bets on fewer assets. Many of the latter may go through severe drawdowns and draw angry questions from clients at the end of every quarter even if that is the right thing over the long term. Moreover, having a small allocation to a risky fund that returns a great return in any quarter can psychologically mask mistakes elsewhere and can even grow the advisor's reputation as a genius.
Managing other people's money is never as simple as managing your own money.
3. Advisors are not immune from the same "fund collection" kitchen sink strategy as some participants here and have a tendency to add any fund that currently looks good just in case their earlier choices turn out to be not that great. It is human nature to always look for the next big thing.
Unfortunately, many look at their financial planners just like their doctors. As ultimate authorities that should not be questioned. This may result in unrecoverable tragedies.
Some suggestions to evaluating advisors:
1. Resolve all conflicts if interest.
2. Ask them to explain in simple terms their strategy for you without getting lost in fund names and lists. They should then justify their fund selection in the context of that strategy. If the cannot do this or unwilling to do this walk away.
3. See if they will set up a good benchmark for your portfolio performance, ideally a simple index fund allocation for your risk level against which your portfolio can be measured. This is where you will likely lose most advisors because nothing shows up an advisor's competence or lack of more than a suitable benchmark. Good advisors should be able to create a good benchmark and satisfactorily explain the deviations in your portfolio.
If it is just portfolio management that is needed, you can also explore cheaper online services like WealthFront or Betterment as an alternative.

I had run into a brick wall last time I tried to get any additional information about it, but I just learned that its invested in by some type (GMIB?) of variable annuity held in his IRA through MetLife. I found their summary prospectus and am editing the OP to link to it.
New link
Original link

Absolutely inappropriate for her to be pressured into making a decision within a couple of weeks. There's no hurry, especially for someone who has had their money in CDs and is facing a new world of investment choices and possible risks.
Yes, of course "she would have been a lot better off if she would have invested back in 2009." Too bad she didn't have a crystal ball.
She should reply to the financial planner/advisor: "Your clients would have been better off if you got them out of the market in October 2007 and kept them out until March 9, 2009."
Looks like the recommended investment is a junk bond fund. She needs to be fully educated on the huge differences between putting money in an FDIC Insured Certificate of Deposit and investing in a junk bond fund........night and day.
And paying a 3.75% load for any bond fund is questionable; and the load could be even more. The fund by that name that I looked up on Morningstar had a 5% load.
I agree with you, that she would be well served talking to Vanguard. They now have various levels of advice that they give, all the way up to and including the services of certified financial professionals. And I'm sure the financial professional that Vanguard would recommend to her would not be having her purchase load funds.
You also mentioned Price; and I'm sure that the Schwab and Fidelity advisors would be worth talking to. You can always screen people in advance before deciding to go with any service or any advisor.

A friend recently decided she must do something investment wiseOAS she has had her money in CDs for years so she went to an advisor/planner. Her husband, my former best friend, died 6 years ago and she is alone.
She is 57, would like to retire in 10 years and has no debt. Judging from what my buddy told me before he died, his insurance policy would leave her well off.
The planner is trying to pressure her into making a decision within a couple of weeks telling her she would have been a lot better off if she would have invested back in 2009.
First he suggested annuities but after doing some research she decided she doesn 't want to go that route.
She told me today one of the funds he suggests is American Funds American High Income Trust Fund (B grade I think). I don't know much about it but it has a decent 10 year average of 7 per cent. She would have to pay a front end load of 3.75 per cent which makes me think it's not good for her.
He told her a ratio of 25 percent bonds and 75 percent equities would be best. I think she would be better talking to Vanguard or Price for advice.
I am a friend and only want to give her a little advice and not get too involved.
Any suggestions would be appreciated.
Thanks in advance.

I fear Alex is right, especially if your father is paying the front-loads on these funds. Is he? Imperative you find out. The situation is my penultimate fear...very glad you are helping protect him.
Is the CFA charging an addition fee, beyond the loads and er listed?
Please read this thread: Ouch...biting commentary on Edward Jones
The series of painful articles by Sylvia Kronstadt...exploitation of uninformed or less able investors.
Here is full article: Edward Jones Saga
Besides that, there are just way too many funds here, in my opinion...you are right to be concerned.

Excellent read.....important for investors to know.
"Almost every major country has had a bear market in which share prices have dropped over 80%.........the Greek Stock market fell 92.5% between 1999 and 2012......someone who invested at the top in 1999 would have lost 99.2% of their investment by 2013 [in the Cyprus stock exchange]..........."

My father has just turned 70 and is about to retire and start drawing social security. He recently met with a CFP who is going to be managing his retirement accounts for 1% of assets as a fee. He really likes the guy and feels well taken care of, but the Portfolio seems a bit all over the place. It's not truly large enough for his retirement needs so he's hoping to keep a somewhat aggressive tilt and has about one third in an IRA that is 100% invested in the Blackrock Global Tactical Strategies Portfolio and the rest in a 401k with the funds summarized in the image below:

I'm glad that he feels like he is in good hands, but I'm concerned that the advisor is spreading him too thin to be useful (for commissions?) and the fee seems excessive since he is already concerned that he doesn't have enough for retirement. The fee does includes general planning help beyond just portfolio management whenever my father has questions along with some proactive discovery in order to get a good background.
I wondered what people's thoughts here might be?

Old_Skeet has pretty much just been pondering for the past 30 days, or so, since the S&P 500 has rebounded from a recent low, week of Fed 3rd, and has had a nice upward move since then. Even though it has pulled back form a recent closing high of 1878 by a little better than two percent I am looking for a price target of around 1800 before valuations in the Index become more to my liking. At this level I believe the Index will have a P/E Ratio (TTE) of a little better than 17 (trailing twelve month earnings) and a P E Ratio (FEE) of 15 and change (forward earnings estimates). I am thinking some of the emerging markets are now offering some good value if one has a mid to long term outlook and, with this, I have been nibbling in these. For the most part though, I have just been looking and buying a little around the edges. Unless I spend some cash soon I'll have had a cash build during the first quarter coming mostly from mutual fund distributions.
Have a good weekend ... and, I wish all "Good Investing."

@Scott: Your late, your late for a very important date ! 5 minutes to late.
Regards,
Ted
I'm Late: White Rabbit:

Hi Willmatt72,
Wow! You are presently in a superb position still 15 years away from retirement.
Given the magnitude of your current portfolio, its asset allocation distribution, and your planned savings/contributions, that portfolio will grow with high probability until your retirement date. Unless you anticipate extremely high withdrawal rates, you already have a high likelihood of portfolio survival for a long (30 years or more) drawdown period.
As General George Patton said: “Take calculated risks. That is quite different from being rash.“ You need not be rash in this instance and need not accept any unwarranted risk.
You might want to explore some what-if options, or, after a provisional decision has been made, become more comfortable with that decision by doing a few parametric Monte Carlo simulations. Today, Monte Carlo simulations are readily accessible to an individual investor. Here are Links to two easily used Monte Carlo calculators:
http://www.portfoliovisualizer.com/
and,
http://www.moneychimp.com/articles/volatility/montecarlo.htm
I especially like the Portfolio Visualizer version. Please give it a test ride. However, its inputs are a little more complex than the MoneyChimp version and requires two sets of sequential inputs: a pre-retirement period and a during-retirement period.
The MoneyChimp simulation links the two segments into a single Monte Carlo simulation. It permits a user to specify estimated portfolio returns and volatility (standard deviation) both pre and post the retirement date. You might want to start your Monte Carlo work at MoneyChimp.
Please exercise either simulator to explore a range of what-if scenarios that are within your risk tolerance zone. A major output from each Monte Carlo case explored is an estimate of portfolio survival probability at the end of the study period. By changing the inputs you get to test sensitivity of this end result to whatever portfolio asset allocation and performance statistical assumptions you wish to examine.
After a bunch of runs, you can decide what asset allocation and what portfolio drawdown level puts you into an acceptable risk zone. I might be happy with a 95 % likelihood of portfolio survival whereas you might demand a 99 % success probability. You get to explore various asset allocation percentages, the returns statistics, and the drawdowns that allow you to reach your goals. Monte Carlo analyses is easy, informative, and fun to use.
Good luck. You have already been blessed with good fortune given your inheritance.
Risk can never be entirely eliminated in the marketplace, but it can be controlled. Complete outcome certainty is impossible. That uncertainty is precisely within Monte Carlo’s wheelhouse. It was designed to precisely address uncertain outcomes.
You are doing the necessary fact-finding task. Monte Carlo simulations will allow you to put your fact-finding into a likely outcome context; it’s just another tool to tilt the successful retirement odds a little more in your direction. It should increase your confidence level.
As a general rule, I do not believe that financial advice casually offered over the internet is either reliable or trustworthy. I am not offering advice here. I am simply giving you an alert that Monte Carlo tools are accessible, are easy to use, and might help you in making your investment decisions. Freedom to choose your toolkit is always in your corner.
Best Wishes.

@willmatt72
A note about the taxable status of the majority of the monies.
Add this to your list of things to do :) ......
Fidelity Personal Retirement Annuity
The above link is an overview with some other internal links and a short video.
This link is for the investment choices within the annuity.
Normally, I am not a fan of annuities; as sold by insurance companies. However, if our house were to inherit a sum of money beyond our current needs, we would fully review the above annuity plan in order to defer taxation. A few notes from my recall about this product......55 fund choices, no brokerage feature (so no stock, etf, index or other vendor funds available, except the few along with the Fidelity choices). The cost of the annuity is .25% added to the expense ratio of a given fund. No surrender or holding periods that lock up the money at a cost, as is common with annuities. Review the exchange restrictions among the funds; as there are limits as to how often one may move monies around within the annuity.
Fidelity is not the only company to offer a similar plan; but I don't have that MFO discussion at hand and short of time today.
The short term downside for this would be the taxation of the sale of current holdings in order to fund such a plan.
Anyhoo........perhaps something to review relative to your circumstance.
Take care of you and yours,
Catch