Working with a Chartered Financial Consultant (ChFC)

[sent]

I just signed on with a Chartered Financial Consultant (ChFC). I had to look up exactly what this credential is. He was recommended by my accountant whom I have trusted for 11 years as my practice has grown.  I'm nervous because it's just so new to me. I have a tendency to keep things sitting in cash and I know that's not the way to go to build wealth. My husband is terrible at saving so I brought him into the loop also to use the consultant but we are still keeping our finances separate. The consultant said that was a little unusual but still totally workable. I also don't know anyone who would personally discuss their experiences with me, even though I'm sure other doctors use these kinds of services. I follow this page of doctors discussing investments all day and they all say "do it yourself! don't pay a planner!" which is not helpful.

The first thing we have to do is move all of our random retirement and brokerage accounts into the brokerage his company uses. I'm not totally sure how he gets paid beyond getting us set up with a life insurance policy and I guess investment vehicles he may recommend, but I decided I need to not get hung up on that since he presented himself as being available pretty much all the time for any financial or business related question I may have. Like how my dad was asking me the other day if he should sell his investment property because of the crazy markets and I was wondering if there was some kind of beneficial way for me to buy it from him - the consultant said he will set up a meeting to discuss this issue and what we should consider doing instead of my dad just calling a realtor to randomly list on Zillow. He also set us up with some software where we can each log in and see what our net worths are. 

Any experiences to share using a professional like this?

[bee20]

I've not worked with a ChFC, but from some quick searching it looks like they are held to the same fiduciary standard as Certified Financial Planners so it's not some guy going to sell you a whole life policy.

As a business person you often make the choice between doing it yourself or hiring out a service or skill so it's reasonable to hand this over, especially if you academically want a higher risk tolerance in your investments than you can do for yourself. It looks like they are getting paid off of your investments (you are transferring them to their brokerage) so understand how you are being charged, whether that is a flat percentage or a fee based on trading volume. If they're coy about this I would be hesitant to sign over my money and might look around for someone who is more transparent, because that is important to me.

I think I would make sure I had sufficient understanding of what the consultant will do as far as balancing your portfolio or reacting to market changes. For example, how active will they be in managing your portfolio if you don't make any appointments?

[sent]

bee20, thank you, I just send an email asking for a phone call to ask some of those questions. He said they take a percent of what is invested.

[sicilygirl]

May 13, 2021 4:47:23 GMT -5 sent said:

bee20 , thank you, I just send an email asking for a phone call to ask some of those questions. He said they take a percent of what is invested.

Charging a percentage of assets under management is the best arrangement, in my opinion!  And it aligns with him being a fiduciary aka putting your interests over this own, so that's great!  The bigger your portfolio grows, the more he makes so win/win.  Hopefully it's a good fit for you, and he can bring some value to the table.

[imojoebunny]

I know some people who do similar things (I have an MBA in Finance, so some of my friends are in the financial planning industry), though I am not familiar with that company. You will pay a higher percentage of your returns, than a mutual fund through Vanguard or the like, but they might be able to help you make better selections, and keep you on track with investing, which could well be worth it, if you are not interested in learning about investing or spending much time on it. We invest ourselves, outside of mutual funds, but it takes time, and interest. If all he is doing is buying some index funds for you, it is not worth it, but if he is actively seeking value stocks or guiding you toward specific asset funds that make sense for your risk profile, then it can well be worth it. You don't have to stick with it, if it ends up not having better returns than what you could get in a low cost fund that fits your risk profile. You might learn enough from him, in time, that you don't need him anymore, if you do become interested in it.

[sent]

May 13, 2021 19:47:42 GMT -5 imojoebunny said:

I know some people who do similar things (I have an MBA in Finance, so some of my friends are in the financial planning industry), though I am not familiar with that company. You will pay a higher percentage of your returns, than a mutual fund through Vanguard or the like, but they might be able to help you make better selections, and keep you on track with investing, which could well be worth it, if you are not interested in learning about investing or spending much time on it. We invest ourselves, outside of mutual funds, but it takes time, and interest. If all he is doing is buying some index funds for you, it is not worth it, but if he is actively seeking value stocks or guiding you toward specific asset funds that make sense for your risk profile, then it can well be worth it. You don't have to stick with it, if it ends up not having better returns than what you could get in a low cost fund that fits your risk profile. You might learn enough from him, in time, that you don't need him anymore, if you do become interested in it.

Yes, I was also thinking let me give this a shot for the next 5 - 10 years and see where I am at. Our financial picture is so much different now than 10 years ago when I met with a CFP and decided not to use him because I was like "meh how hard is it for me to just buy stuff on Fidelity.com myself?"  Our finances becomes more complicated day by day and I'm going to end up like the grandma with the bills in the pickle jar if I don't take things more seriously. 

I feel like I have so many things to learn and keep up with, I can't take on learning more seriously about investing at this point beyond the very basic stuff discussed here on MM.