How did you find a competent, honest and trustworthy financial planner?

[cantdrv55]

I’ve never used a FP and have done ok but I think now is a good time as I’m 10 years from retirement. I want to make sure I’m setting aside appropriately and also have adequate tax shelter in place. If you use a FP, how did you go about selecting one? Have you had a bad experience with one in the past? What’s an appropriate fee for services? Anything else I should consider? Thanks.

[pwd72s]

I married mine back in 1975.

Seriously, nobody cares more about your money than you...but there are "planners" out there perfectly willing to take some of it. And we read often of the ones who take all of it. Sports celebrities often suffer from shark attacks.

Strongly suggest a book for you:

The Bogleheads' Guide to Retirement Planning
by Taylor Larimore, Mel Lindauer, Richard A. Ferri, and Laura F. Dogu

[cantdrv55]

Thank you!

[KFC911]

I never have. What Paul said

[drcoastline]

Financial planner? I don't think so. Follow th basics, if you are doing well, keep doing it, learn. Get a good accountant.

[masraum]

I have not, but I've read about it. THere are folks that you have to pay and that have a fiduciary responsibility to do the best thing for you with your money. I've heard that it's best to interview them and find one that fits well with your financial sensibilities (are you very conservative or are you willing to expose yourself to more risk for the possibility of more gain?)

[Sooner or later]

Need is dependent on the complications of your situation .

They can make sure that all your financials work together. Investment, insurance, trusts/will, tax planning,, etc recommendations based on your family needs and risk tolerance.

A fee only CFP can be beneficial to some. A CFP must have at least a bachelors degree. They must pass the CFP test that consists of two 3 hour sessions in a closely monitored environment. About 2/3 pass the test. Complete somewhere around 4,000 hours in the financial planning area. They must also act as a fiduciary.

Back in the mid 90's I completed a CFP course and took the test. It was a MF. I didn't think that I passed it, though I did. I never worked in an area to allow me to get my certification.

[wilnj]

I’m in the same position as the OP and just started working with a fee only FP. I interviewed a couple who worked in different models and settled on this one.

What drove me to this point was that I realized I wasn’t taking full advantage of the gains in the market over the last couple years and decided to call in reinforcements.

[flatbutt]

Mine is a salaried FP who I inherited from my Dad. She has kept me in the black for 15 years now. I recently convinced my kid brother to use her and he is up from where he started. Of course it's not too hard to make money in this recent market, but my FP has minimized my losses in the downturns and has recovered all of them.

[Gus Berges]

Even though one of my majors is finance, early on in my life I did hire a financial planner to see if they could improve upon what I was already doing by myself. Turns out it was a total disaster. Most are motivated by the commissions they will make off your portfolio. The basics hold true for the last decades: time value of money (can't beat time, the earlier you start, the better off you will be); risk reward ratio: tons of fancy financial names for this, but essentially you will not make 10% return on a bond, unless it's junk, in which case odds are you'll never see your money; index funds: unless you are a full time trader and know how to write complex programs, odds are you will not be able to beat the performance of an index fund such as the Vanguard Total Index Fund (VTI).

There are other things to consider such as cashflow requirement, tax implications, fees, etc. but all of them are simple questions that only you can answer. If I were you, I'd take a look at no load mutual funds and filter them based on your preferences for risk and their corresponding ratings. That will equate to 90% of what a "broker" will do...

[sammyg2]

How did you find a competent, honest and trustworthy financial planner?

I asked similar questions here a few years back.
After I found out how much they charge, I said no tanks and started reading, studying, and becoming familiar with the rules of investing.
Didn't take long to find that most if not all the info you can get from a financial planner is already right in front of us, for free. If we're willing to do the work and be disciplined. That's the hard part.

I've developed an investment strategy consistent with my risk management plan for each of my funds (short-term, long term, tax-exempt, deferred etc), and have done very well.
I've also established regular communications with my Fidelity private client advisor to review my plans, a service which is priced just right

[pwd72s]

Another book I think highly of...

The Bogleheads Guide to Investing. Also written by Mel Lindauer, Taylor Larimore, and Michael Lebouf.

The two dovetail together...after reading them, you should have gained financial info you never knew about, and probably will have gained a pretty good defense against the attacks of financial sharks.

Vanguard and fidelity both offer good things for the small investor. Of the two, I lean towards Vanguard...because Jack Bogle set up this fund family uniquely...in effect, the investors own the company.

[Seahawk]

Sammy is spot on:

The history of Certified Financial Planners as a profession is a relatively recent career path in terms of processes and certs.

A brief history: https://www.cfp.net/about-cfp-board/history

Not really for me but I have a background in econ and finance.

Financial Planning, however, really doesn't require much more that a systems engineering approach to finance: I call it institutionalized common sense.

There are many, many really fine tools to help get you started to form a baseline of understanding so that you can ask the right questions, mainly to yourself and family (you have to work with your family): Risk tolerance, goals, work tolerance after retirement, current financial status, etc.

I never recommend specific stuff beyond books, which Paul has covered.

Spend at least six months getting familiar with the lingo, the never ending alphabet soup of finance and investments.

My nephew is an investment banker in Atlanta with all the certs and quals in the industry. I have to prepare to talk to him since I am not as fluid in finance as I used to be.

I also have a very good friend you does estate and financial planning in Richmond for a really great firm, which he owns.

I don't do business with either (never mix family, friends and money) but they provide me with insight, not recommendations, on trends. Once or twice a year, tops.

Start there. Expand your knowledge and ask your circle who they recommend for initial guidance.

[McLovin]

The problem with “financial planners” was summed up by Warren Buffet.

“NYC is the only place where people drive in their Rolls Royce to take advice from people who rode in on the subway.”

[greglepore]

Second the recco to just buy good funds from Vanguard, and diversify. If you have enough cash that it "matters" they give you a personal adviser, but its kinda pointless. My big accounts are managed and they charge around 1% annually, but they balance and do the tax filings. But you don't really need that. A CFP very rarely will beat the overall market, and only the best care about something other than their commissions. The only way to find a good one is thru a referral from someone who doesn't suffer from confirmation bias.

[Superman]

When you find an honest man, send Diogenes an email. He is still looking for one.

[flatbutt]

Originally Posted by Superman

When you find an honest man, send Diogenes an email. He is still looking for one.

I have an honest woman, does that count?

[LWJ]

Well, I fired my Grandfather’s FP

Interviewed a complete SNAKE

Hired a pretty good flat fee guy for about 20% of my portfolio.

I do real-estate and private equity decisions. He runs some of my stocks and is a great person to bounce ideas off.

I used to do my own stocks and did very well. But, as it grew, it outgrew my time and abilities.

And no, I’m not a billionaire even though it might sound like it.

(And, if you pay attention, there is a very talented FP on this board)

[Noah930]

Timely thread. We've had a financial advisor at Merrill Lynch for the past 6 years or so. Our advisor recently left ML, and he joined a new boutique firm. Obviously he's trying to get us to move with him. So it's given us a chance to re-evaluate our options: 1) stay with ML (fees expensive, so not likely), 2) move to the boutique firm with our advisor (nice guy, but Mrs. Noah is "meh" on him--fees are better there, though), 3) go to another advisor/firm, or 4) invest on our own (i.e. diversified selection of Vanguard funds and maybe dabble in a Ameritrade-type brokerage account on the side). I think the missus and I are leaning towards one of the latter two options.

edit: Oh, and to answer one of the OP's questions (and because the transparency doesn't seem to be there regarding this): Merrill charges us over 1% (maybe 1.25%?). The new boutique firm would charge us 0.9%. I don't know what the other firm will charge us, but my F-I-L has an account with them and he's being charged something like 0.75%. And Vanguard charges 0.3% for signing up with a FP.

[rfuerst911sc]

When my mom passed away 🙁 in 2005 her money was invested with Morgan Stanley . I met with her financial advisor to figure out what to do with the inheritance . I immediately felt a sense that he was honest/smart and not pushy . He calmly answered all my questions and I decided to stay with them .

My portfolio has grown nicely , maybe it would have done the same if I managed it . But I was busy with work/family/life and didn't want to be the financial manager . I am now retired and my portfolio is still with MS . As a matter of fact my wife and I have a telecon this morning with our advisor just to touch base . We have no regrets with our choice of advisor .