Identifying a good financial planner

MikeW

HI folks,
I wonder if I could ask for the board's advice on how to identify a good fee-only financial planner. I have had an initial meeting with an advisor at Merrill Lynch and he seems to be good. However, he only provides financial planning if I turn over my assets to him. He will create a financial plan and then charge me 1% for assets under management on an ongoing basis. I'm not sure that I want to go that route. I need to do some retirement planning that will evaluate my financial picture with the intention of retiring in 10 years. But I'm more of a buy and hold investor. I think that I might want to go the route of working with a financial planner who can develop the plan but that I would continue to manage my own assets. I'm not sure that the ongoing fee of paying 1% for someone else to manage my assets is worth it. I'd value your thoughts on how to identify a good planner. If anyone has had good experience with someone in the Washington DC area please message me.. Thank you.

slick

A place to start might be reading the info on this link to NAPFA , https://www.napfa.org/financial-planning/how-to-find-an-advisor
the National Association of Personal Financial Advisors. Good luck, they can develop a plan for you based on your needs and maybe review quarterly or semi-annually. They most likely will charge a flat rate for the plan and hourly for review.

catch22

Hi @MikeW
My question is why ML? Do you already have a ML account and need/want to use their advisors?
If this was my choice at the moment; my question to this board would be others experiences with ML in general, and in particular, a managed account with ML.
I agree with @slick and the link. The "find advisor" has a nice filter for choices.
Regards,
Catch

MikeW

@slick,
Thanks very much for the advice. This gives a good set of questions to ask. I'm curious if you hired a planner or did your own financial planning. Reading thru a number of the planners, it seems like its difficult to find a planner that doesn't also look to manage your assets. I'm also considering using the roboadviser service offered by Schwab to do a sanity check on my asset allocation and then using the tools available on this site to pick new funds.

MikeW

@catch22,
Great to connect with you again Catch. So I was referred to ML and specifically to an advisor that specializes in working with families with special needs kids -- my situation. I haven't decided to go with this person at ML which is why I was asking the question about identifying other advisors. But that's a great suggestion to ask for people's experiences with ML. I'm curious -- as I recall you work with T Rowe Price. Did you work with a financial planner there and if so what were your experiences? thanks.

davidrmoran

Edelman does this kind of thing all the time and I have heard various of their CFPs talk (they have a good weekly radio show) about just this subject. However, they are a bit more than 1%, I think. Like any good CFP outfit they are plugged into local trust and estate and special situations attorneys. I am not saying they are better than what you can find elsewhere, but they are honest and low-key from all repute and their radio show is good.

https://www.edelmanfinancial.com/financial-planner-offices/washington-dc/north-bethesda

https://www.edelmanfinancial.com/financial-planner-offices/washington-dc/

slick

@Mikew, I hired an advisor who was a certified financial planner ar ML whom I knew for a few years with my work for a nonprofit after I inherited money from my spouse. It was more than I had managed previously so I thought it wise. She created a plan for me and transferred my assets from Fido. There were some funds that would not transfer so substituted a few, which were perfectly good funds. We did buy stocks, but she was not a fan of etfs as I was. There were some funds I wanted that I could not buy because they were not compensated, and frankly I found I was better at fund picking than she was. I ended up transferring back to Fido after 3 years, and manage my own assets, but do have use of an advisor with whom I meet with quarterly, no charge. I had more of an issue with ML than my advisor there, and we are still friends. I think you are on the right track of finding a fee only planner but managing the assets yourself with occasional meetings to make sure you stay on track. Fido also has advisors for half the cost of ML if you choose that route.

catch22

@MikeW
Our house has been with Fidelity for 40 years and we're "self-educated" regarding investing. Our family backgrounds provided for learning and experiences from our parents which allowed both of us to be prudent in the area of personal finance and investing. No financial planners or advisors.
Thank you for being gracious enough to share your particular investment needs.
Not knowing your background or comfort level with investing; I tend to agree with @slick
that: "I think you are on the right track of finding a fee only planner but managing the assets yourself with occasional meetings to make sure you stay on track."
You noted, Schwab. I'm aware of the roboadviser, but not familiar with its functions as used by Schwab for guidance for an individual investor.
You also mentioned changing investments. Do you feel your current portfolio mix is not suitable?

Making a decision to use an investment advisor , would be a tough chew for me today (not to be confused with other estate planning functions). He/she would soon become tired of my questions.
Got to get pillow time. Perhaps other tomorrow.
Regards,
Catch

MikeW

@slick thanks very much for sharing this. I appreciate it. Do you feel you get valuable advice from your advisor at Fido and do they allow clients to interview planners there or do they assign someone to you? Also, just curious if your advisor has steered you towards bond funds or individual bonds. The Merrill planner was pretty emphatic that he puts his clients into individual bonds as a way controlling the interest paid and maturity date which you can't do with bond funds. thanks again.

MikeW

@davidrmoran thanks for the advice on Edelman. I will take a look at him.

davidrmoran

@MikeW, at Edelman as with most indies, maybe all, you can get an hour or more of free consult and general back and forth and scope of work for issue areas and all.

I am sure this is followed w gentle sales pings, probably more than one.

So you could get a headstart that way maybe if you could ward off followups.

I also failed to mention that I too do it all via Fido and ML myself, self-directed w/ conferring sometimes (rarely), and have for 35y. Don't use / have never used Edelman and don't know the first thing about them except what I hear from their show and from articles.

MikeW

@davidrmoran thanks. I'm leaning towards the self-directed route too. I'm curious how you went about determining what your asset allocation should be. For me that's probably the most important advice that I need. Once I have recommendations on that I can research and select the appropriate funds using tools on the board.

slick

@Mikew I actually used the advisor I had before I left Fido for ML, and I use him mainly to review decisions I've made or ask for his input on portfolios as to any weak spots or areas he recommends adding. Have taken one or two recommendations under advisement, but so far I'm staying with the portfolio as is. Did add a couple of Fido funds I liked though, to his surprise (FBALX, FSPHX) and more small cap funds to his surprise. I guess I was destined to manage on my own

davidrmoran

Like so many I was too conservative when I shoulda been more equities, but you know this is bull hindsight.

We have all been insanely fortunate to have lived in this time.

I had a lot of balanced and AA things in the 1980s and 1990s, also gogo equity funds (worked in tech; Robertson Stephens!!), and gradually moved more and more to LCV funds w some MC and SC and some balanced. Kids in college through the 2000s, plus lots of unemployment (freelancing).

But now I am 71 and do not have anything like your situation, and this have moved to 75-25 equity-bond (more 50-50 if you count SS as a bond), and it is chiefly DSENX and PONAX w/ a few other things here and there (FLPSX, PCI, FRIFX ...). I really think I should be tilting back toward 50-50, and shall. With SS it will be effectively much more bond-heavy than 50-50.

But ymmv, bigtime.

I do think sleep-at-night is a high criterion.

I like your diy approach but no reason not to mooch off edelman or equivalent, plus your ML friend as she is willing, plus free Fido. Depends on how much time you want to give to pondering. I assume you have a competent trust and estate atty already to help with your needs.

MikeW

@slick Sounds like you are ahead of your advisor! What small cap funds did you select? That is an area I'm really lacking in. I'm mostly large cap. This is one reason I want to get some outside advise on asset allocation.

MikeW

@davidrmoran very interesting. Is PONAX your primary bond fund?

slick

@Mikew, I added CCASX before it closed to replace Fido small cap FSCRX which lost its long time manager, added AOFAX . I am a fan of small cap funds if you can find them before assets reach $2B. I also added VBK as a blend. Also have UBVSX, but it too has closed. I'm sure you will be told to add small caps, but i may be more aggressive than most ,I'm 20% small mid, including International small caps. At 67, I'm 68/22 equity to bonds,cash

Derf

@slick: Where is the other 10% invested, if I may question ?
Derf

slick

Oops I mean 67/32.

davidrmoran

@MW, yes, for better or worse. I keep looking for uncorrelated alternatives that was not too risky. I have some in PCI but may bail out of that soon. I have to raise a year or three of cash. My greed gets ahead of my prudence (and hence timing) often.

MikeW

@slick thanks for sharing. Yes it appears challenging to find a good small cap fund thats still open. Is there a way of purchasing AOFAX without paying the 5% sales load? Looks like a very strong fund.

Sven

Wonder where BobC is today? I understand he retired but his worked in this industry and have informative approach on this topic.

davidrmoran

@MW, you might want to look at WEMMX and GABSX (some overlap) --- good SC, not the very top, not inexpensive, but long records and a smart manager.

MikeW

@davidrmoran thanks David... will take a look.

slick

@Mikew the fund AOFAX is available at Fido load free and ntf