Tell me about fee-only financial planners...

[stretchad]

We're looking at meeting with a financial planner to help us manage our investments, make some decisions on how to set up a business, and overall financial planning assistance. It seems like a fee-only financial planner would be the most unbiased, broad-ranging guidance that we could get.

What have been your experiences with them? How do they structure their fees? How much do they typically charge?

[SJ]

If they are going to be doing the actual managing, ie making buy/sell decisions and everything, I would expect to pay between 1-2% per year.

Make sure there are no other fees, commissions, or conflicts of interest. They should have no other goal but to make your assets grow- no kickbacks for putting you in certain products and no bonuses for selling you anything.

They should be registered with the SEC and you should be able to get and read a copy of their Form ADV.

www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_Search.aspx

[Deleted]

sarajoy, while you're on the topic, at what point ($wise) do you think a couple should start using a financial planner instead of doing it themselves, and does that amount include 401(k)s/IRAs, or just other investable money?

And how do you find out about the $ thresholds for particular fps to be interested in you as a client?

[cjeanette]

Sept 19, 2012 15:35:10 GMT -5 v said:

sarajoy, while you're on the topic, at what point ($wise) do you think a couple should start using a financial planner instead of doing it themselves, and does that amount include 401(k)s/IRAs, or just other investable money?

Not sarajoy, but my firm recomends 250k in total assets. That's not to say you may not have a need before that though.

[SJ]

My quick answer is that I think we really start to add value in an account that is $250K or more. Our style is tailored to high networth individuals.

I do think there can be value in obtaining guidance from a professional before that- for example checking in with someone at a bank or Edward Jones or something like that. I'm just saying that for our type of intensive, full-service shop, $250K is a good threshhold for when we see new relationships.

Our general minimum is $1 million (now that is not per account, but total investable assets), but we take on LOTS of smaller accounts for existing family units (ie clients have a large trust and also smaller IRA's, parents start accounts for babies/children,etc.) so we can certainly develop a strategy at all levels.

[SJ]

Sept 19, 2012 15:35:10 GMT -5 v said:

And how do you find out about the $ thresholds for particular fps to be interested in you as a client?

Their minimum may be noted in their ADV form (see above).

As I said, our minimum is flexible and we will meet with just about anyone who is recommended to us to see if we can add value and if the relationship "clicks."

[Deleted]

If you guys by any chance have any recommendations in NY, would you mind PMing them to me?

[cahabalily]

I too have a question, if I may ask. H and I are (finally) starting Roth IRA's soon and we're a little bogged down with the various companies/options. VanGuard is always highly recommended here, but what specifically should we be comparing regarding fees, etc.?

[stretchad]

Can CFPs provide tax guidance or even tax preparation? Especially as it relates to DH setting up a business to be an independent contractor? I.e., could they tell us how much to set aside for quarterly tax payments, how to structure the business, etc?

[SJ]

Sept 19, 2012 15:44:37 GMT -5 v said:

If you guys by any chance have any recommendations in NY, would you mind PMing them to me?

Hard for me to recommend competitors (we have clients in NY too), but I will think on this and get back to you!

[SJ]

Sept 19, 2012 15:50:09 GMT -5 stretchad said:

Can CFPs provide tax guidance or even tax preparation? Especially as it relates to DH setting up a business to be an independent contractor? I.e., could they tell us how much to set aside for quarterly tax payments, how to structure the business, etc?

Some investment management outfits have CPA's on staff. We do not, but we work with an extensive network of legal and tax professionals so we absolutely are part of a team that consults on matters like this. I work very closely with our clients' accountants.

For estimates and such, you definitely want a CPA.

[SJ]

Sept 19, 2012 15:49:39 GMT -5 cahabalily said:

I too have a question, if I may ask. H and I are (finally) starting Roth IRA's soon and we're a little bogged down with the various companies/options. VanGuard is always highly recommended here, but what specifically should we be comparing regarding fees, etc.?

Great job!

If you are looking at mutual funds/ETF's, you can look at the expense ratio for specific funds and compare them to others are brokerage houses like Fidelity, etc.

I can tell you that Vanguard is known in the industry for high quality, low cost funds.

[cahabalily]

Sept 19, 2012 16:05:51 GMT -5 SJ said:

Sept 19, 2012 15:49:39 GMT -5 cahabalily said:

I too have a question, if I may ask. H and I are (finally) starting Roth IRA's soon and we're a little bogged down with the various companies/options. VanGuard is always highly recommended here, but what specifically should we be comparing regarding fees, etc.?

Great job!

If you are looking at mutual funds/ETF's, you can look at the expense ratio for specific funds and compare them to others are brokerage houses like Fidelity, etc.

I can tell you that Vanguard is known in the industry for high quality, low cost funds.

Great, thanks. We are definitely looking at mutual funds/ETF's, something we can just deposit money into and let it grow.

[Deleted]

Sept 19, 2012 16:04:11 GMT -5 SJ said:

Sept 19, 2012 15:44:37 GMT -5 v said:

If you guys by any chance have any recommendations in NY, would you mind PMing them to me?

Hard for me to recommend competitors (we have clients in NY too), but I will think on this and get back to you!

It wouldn't be competition! I'd be happy to work with you guys but I need a planner that is willing to help the poors

[noodleoo]

We met with one in our area (MA). They had a $250,000 minimum, but they wanted $6000 to do an initial financial plan. You had to do that first and then it was $5000 minimum a year for their services after that. Sigh... I need to keep looking. I'd like to do the initial financial plan, but am hoping to pay something like half that.