Is the stock market going to tank?

[yeahman]

Opinions on financial advisors? Yay or nay?

Been talking to some since my dad's estate was settled. Standard procedure seems to be to give them every scrap of financial information about yourself so they can create a financial "plan" (I've never had one), then they want to take control of your assets and do their thing for a fee. And if you want access to your own money you need to go through them. I have a really hard time relinquishing control like that. Like, a really hard time. But the portfolio my dad left needs work. It is heavy on equities and has some concentrated positions that seem unwise to hold, but the unrealized gains make it tricky to deal with from a tax perspective. Maybe all I need to do is to work with my accountant?

I feel like if I could consult with somebody for a flat fee and develop a strategy on how to deal with the portfolio, I could implement it myself. It's not hard to click a mouse and move stuff around. But nobody I've found seems to want to do that type of consultation. They want a looooong relationship where they control your assets and the fees go on forever. Seems like a bit of a racket but maybe I'm being too cynical about this? Should I just submit to the system and pay somebody?

[byates1]

https://www.westendadvisors.com/

Some of my nut is w these ppl. 50/100k min portfolio value. .5/1% fees

My FA says they are tits. Rolling w it.

[byates1]

I can get my fa to chat w you via email for free most likely. He's over 1M buy in at this point. My family has been w JMS forever, this guy was picked as senior VP but the outgoing VP 80 yrs old. Manages 700 families.

[Danno]

Opinions on financial advisors? Yay or nay?

Been talking to some since my dad's estate was settled. Standard procedure seems to be to give them every scrap of financial information about yourself so they can create a financial "plan" (I've never had one), then they want to take control of your assets and do their thing for a fee. And if you want access to your own money you need to go through them. I have a really hard time relinquishing control like that. Like, a really hard time. But the portfolio my dad left needs work. It is heavy on equities and has some concentrated positions that seem unwise to hold, but the unrealized gains make it tricky to deal with from a tax perspective. Maybe all I need to do is to work with my accountant?

I feel like if I could consult with somebody for a flat fee and develop a strategy on how to deal with the portfolio, I could implement it myself. It's not hard to click a mouse and move stuff around. But nobody I've found seems to want to do that type of consultation. They want a looooong relationship where they control your assets and the fees go on forever. Seems like a bit of a racket but maybe I'm being too cynical about this? Should I just submit to the system and pay somebody?

My GF is a financial planner (I confess to not knowing the ins and outs of "financial planner" vs "financial advisor" vs "investment advisor" or whatever other terms may exist). I know she does some stuff on a flat fee basis, and also has long term clients. So they're out there.

[up an down]

Try Vanguard

[Danno]

Try Vanguard

I hope they have better services than their retail facing investor stuff, because while I like their products, their website sucks, and when I have called to talk to someone, the hold time was abysmal.

[J. Barron DeJong]

https://www.nerdwallet.com/article/investing/fiduciary

Fiduciary duty vs. suitability standard


The main difference between a fiduciary duty and the suitability standard is that fiduciary duty means an advisor must act in the best interest of their clients. The suitability standard means a broker-dealer must have a reasonable belief that an investment, transaction or the frequency of transactions is suitable for the customer.

The Investment Advisers Act of 1940 states that an investment advisor (or anyone in the business of giving investment advice) has a fiduciary duty to their client
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. The act itself calls these measures broad and doesn't provide specific regulations beyond requiring that advisors act in the best interest of a client.
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The suitability standard is set by the Financial Industry Regulatory Authority, or FINRA. The “reasonable belief” in the suitability standard leaves room for broker-dealers to recommend products that will increase their bottom line through commissions, but may not necessarily be the best investment for you.

Registered investment advisors are legally fiduciaries, but broker-dealers and other types of money managers are not. Some financial advisors, such as certified financial planners, may also be fiduciaries.

A broker-dealer is a broader term used to describe a person or firm that buys and sells securities on behalf of a client as well as for themselves or their organization. They aren't uniformly governed by a fiduciary duty, though under particular circumstances (such as state law), some may be held to a fiduciary standard.

If your financial advisor doesn't have a fiduciary duty to you, they may be able to recommend investments or products that pay them a bigger commission over ones that would be the best fit for you, which could cost you more. Fiduciaries, on the other hand, must act in your best interest. That's why it's considered better to work with a fiduciary rather than an advisor who is simply following the suitability standard.

How do I know if I'm working with a fiduciary financial advisor?


There are many different types of financial advisors, and beyond that, several certifications and licenses those advisors can hold. Few titles beyond investment advisor and broker-dealer are regulated at all, including common titles like “wealth advisor” and “financial advisor,” so it’s especially important to vet any potential advisors before committing to one.

The easiest way to verify that a potential advisor is a fiduciary financial advisor is to simply ask and then verify their status.

To check that they’re registered with the SEC, use FINRA’s BrokerCheck database
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. If you’re working with an investment advisor firm, you can also check for an advisor’s Form ADV on the SEC’s IAPD page, which catalogs their registration with the SEC or state, along with disclosures about the firm, the firm’s business operations, and any misconduct the firm or advisor may have been involved in
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.
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Another way to ensure your advisor is a fiduciary is to work with a certified financial planner — a highly trained specialist with significant financial education and experience. The CFP code of ethics states that all CFPs “must act as a fiduciary, and therefore, act in the best interest of the client.”
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So if you see the CFP designation, you know you’re in good hands. You can verify a CFP through the CFP Board’s website
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.
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[406]

I'll likely never have this "problem", but I thought inherited stock doesn't incur capital gains on any growth prior to your inheritance, but any change in value thereafter will likely trigger capital gains taxes when sold? If that is true, I would just sell the individual stocks and put in mix of vanguard ETF, like VOO, VYM, etc

[dan_pdx]

My GF is a financial planner (I confess to not knowing the ins and outs of "financial planner" vs "financial advisor" vs "investment advisor" or whatever other terms may exist). I know she does some stuff on a flat fee basis, and also has long term clients. So they're out there.

Yes, fee for service financial advisors (or are they called financial planners?) are definitely a thing. For the reasons you outlined, it absolutely makes sense to use a fee-for-service planner if you can find one rather than someone that wants to manage your money forever.

[up an down]

I hope they have better services than their retail facing investor stuff, because while I like their products, their website sucks, and when I have called to talk to someone, the hold time was abysmal.

Yep.. I dont trade anymore so the website problems don't bother me.. And I have never had a problem reaching my advisor.. But.. Vanguard has admitted in a round about way..that their tech is bad... And is now committing billions to upgrading it.. Time will tell if they succeed

[up an down]

I'll likely never have this "problem", but I thought inherited stock doesn't incur capital gains on any growth prior to your inheritance, but any change in value thereafter will likely trigger capital gains taxes when sold? If that is true, I would just sell the individual stocks and put in mix of vanguard ETF, like VOO, VYM, etc

Correct. But if the inheritance is large enough there may be inheritance taxes from federal and state... I forgot to add... IRS rules apply if the inheritance is in a tax deferred account.

[bfree]

Yeahman, The search term you want is "fee-only" advisor/planner. You're absolutely on the right track in that situation. Tell the AUM advisors to fuck off.

[AdironRider]

You should just park it in an 80/20 etf portfolio equities to bonds. Everybody offers one that tracks the s&p 500 for basically zero money in fees. Same for a bond etf. When it comes time for you to retire, rebalance to 60/40. I just saved you 1% for life and you won't have to think about this at all.

Where an advisor provides value is if you have plans to get "creative" or have a multitude of different assets like real estate holdings, stock portfolios, & stakes in businesses. That adds complexity and you will want good advice, and you will also need a good accountant as well. A financial advisor is not going to do both of those tasks nor should you trust one to do both.

And if they start pushing annuities just tell them to fuck off and find somebody else. 9 times out of 10 they are just trying to hustle you for a commission.

[Danno]

Yeahman, sent you a PM but posting here because no idea if the shitty software will notify you.

[Master of Energy]

You should just park it in an 80/20 etf portfolio equities to bonds. Everybody offers one that tracks the s&p 500 for basically zero money in fees. Same for a bond etf. When it comes time for you to retire, rebalance to 60/40. I just saved you 1% for life and you won't have to think about this at all.

Where an advisor provides value is if you have plans to get "creative" or have a multitude of different assets like real estate holdings, stock portfolios, & stakes in businesses. That adds complexity and you will want good advice, and you will also need a good accountant as well. A financial advisor is not going to do both of those tasks nor should you trust one to do both.

And if they start pushing annuities just tell them to fuck off and find somebody else. 9 times out of 10 they are just trying to hustle you for a commission.

That's fucking great advice.

and thats 1% per year those asset % fees get. for just doing the same thing. Thats a lot of fucking money. Lets say you get a reduced rate of say .5% of 2mil over 30 years. compounded at 5% thats 700k. They aren't providing more than 100k worth of value over that time period.

Do what AD says, and get a good CPA/CFP who is fee based.

Also, check on the step up in basis like has already been mentioned. Unless it was in an irrevocable trust already (pretty common scenario now adays. with your dad as income bene and you as remainderman which in that case in usually no step up) you should probably get it

[Cono Este]

Opinions on financial advisors? Yay or nay?

Been talking to some since my dad's estate was settled. Standard procedure seems to be to give them every scrap of financial information about yourself so they can create a financial "plan" (I've never had one), then they want to take control of your assets and do their thing for a fee. And if you want access to your own money you need to go through them. I have a really hard time relinquishing control like that. Like, a really hard time. But the portfolio my dad left needs work. It is heavy on equities and has some concentrated positions that seem unwise to hold, but the unrealized gains make it tricky to deal with from a tax perspective. Maybe all I need to do is to work with my accountant?

I feel like if I could consult with somebody for a flat fee and develop a strategy on how to deal with the portfolio, I could implement it myself. It's not hard to click a mouse and move stuff around. But nobody I've found seems to want to do that type of consultation. They want a looooong relationship where they control your assets and the fees go on forever. Seems like a bit of a racket but maybe I'm being too cynical about this? Should I just submit to the system and pay somebody?

Full disclosure, I was an options trader, not an investment guy.

Everyone has a different history of risk, and no one can decide your comfort level for you. These advisors never know enough to consider that. You can take risk at work, have millions, but still not have the history, or your family does not, to ride the up’s and downs of the mkt. it takes experience. These advisors. just want to put your money to work and make a %. I mean no disrespect to any of them, but they are largely un qualified. That’s why the average mutual fund is not held very long. In general, way too many people in the mkt. in my opinion. Back in 2001, my ex would come home and tell me about 20mm Acct’s that were now 5mm, and these “sophisticated” types shitting the bed and selling.

If you’re a blue collar guy, they can at least give you a plan, but most don’t even do that. They simply don’t have time for small accounts. They need their to ,10 clients or they get the hatchet.

Id recommend going with vanguard balanced fund, and forget it. Bonds are paying again too. Or some kind of “lazy etf portfolio”.

[yeahman]

I really appreciate the replies, this is all super helpful. The reason for the unrealized gains is that my parents separated their assets into two separate trusts, mom died in 2015, and my dad took over as trustee. So everything that was in her trust reset in 2015 but not since. The stuff in my dad's portfolio did reset upon his death last year. Anyway I like the idea of searching for a flat-fee advisor because I'm not intending to get fancy and try day trading or anything, I just want to rebalance in a conservative way and more or less track the market. I'm meeting with my accountant next week to help determine if it makes more sense to do this over time to minimize tax liability, or maybe just do it all at once and take the tax hit and be done. I also enrolled in a basic investing class online so I can at least "know what I don't know." A lot of what you guys said kind of confirmed my own ideas and suspicions, and that's helpful. I just don't want to fuck it up by being naïve and thinking I'm smarter than I am. But at the same time I don't want to pay somebody a bunch of money for years to do something that I can actually do myself if I'm careful. Thanks all.

[LeeLau]

I'm wondering how the higher for longer thing is going to play out for equities. So far it doesn't seem to be making a huge difference, since the total stock market indices are near all-time highs.

Will the $6 trillion on the sidelines flow to assets in a long-term inflationary environment, wait in money market funds for distressed assets to become available, or just hold onto yield in the money market funds?

If we do go into stagflation, wouldn't it be good to own assets instead of holding cash/ money market funds?

Dividend yielding US entities with lots of cash + parking cash in 5.5% insured savings accounts imo still seems a fairly safe bet. As a Canadian, for FX reasons the buy and holds are then effectively neutral

[skaredshtles]

Yeahman, The search term you want is "fee-only" advisor/planner. You're absolutely on the right track in that situation. Tell the AUM advisors to fuck off.

Yep - and *confirm* with whomever you select that they are a fiduciary, as per DeJong's post. It sure looks like AUM is NOT: https://adviserinfo.sec.gov/firm/summary/287653

FTR, it sure looks like West End Advisors probably aren't fiduciaries either. I'd avoid them unless you can confirm they *are* actually fiduciaries: https://adviserinfo.sec.gov/firm/summary/124606

[skaredshtles]

You should just park it in an 80/20 etf portfolio equities to bonds. Everybody offers one that tracks the s&p 500 for basically zero money in fees. Same for a bond etf. When it comes time for you to retire, rebalance to 60/40. I just saved you 1% for life and you won't have to think about this at all.

Where an advisor provides value is if you have plans to get "creative" or have a multitude of different assets like real estate holdings, stock portfolios, & stakes in businesses. That adds complexity and you will want good advice, and you will also need a good accountant as well. A financial advisor is not going to do both of those tasks nor should you trust one to do both.

And if they start pushing annuities just tell them to fuck off and find somebody else. 9 times out of 10 they are just trying to hustle you for a commission.

I think where a CFP comes in handy for a lot of folks is when it comes time to start pulling $$ from all the accumulated wealth. Making sure you take it at the right time, in the right amounts, in order to not run out, and not leave a bunch leftover when you die... that's shit can get COMPLICATED.

[Cono Este]

I think where a CFP comes in handy for a lot of folks is when it comes time to start pulling $$ from all the accumulated wealth. Making sure you take it at the right time, in the right amounts, in order to not run out, and not leave a bunch leftover when you die... that's shit can get COMPLICATED.

I would agree with this, like when to take SS etc. I get referrals from smaller independent guys, and they seem to offer that more than the big wire house advisors.


The only big reason I’d use a big wire house firm, like JPnmorgan etc is for estate planning. Trusts, corporate trustee etc. if you rich etc.

My ex works for a firm now that started off doing trust work. They do the whole package. The only reason I’d pay some schmuck like me is for estate planning, and the whole 9 yards, which is a good thing for some.

[Kevo]

Opinions on financial advisors? Yay or nay?

Been talking to some since my dad's estate was settled. Standard procedure seems to be to give them every scrap of financial information about yourself so they can create a financial "plan" (I've never had one), then they want to take control of your assets and do their thing for a fee. And if you want access to your own money you need to go through them. I have a really hard time relinquishing control like that. Like, a really hard time. But the portfolio my dad left needs work. It is heavy on equities and has some concentrated positions that seem unwise to hold, but the unrealized gains make it tricky to deal with from a tax perspective. Maybe all I need to do is to work with my accountant?

I feel like if I could consult with somebody for a flat fee and develop a strategy on how to deal with the portfolio, I could implement it myself. It's not hard to click a mouse and move stuff around. But nobody I've found seems to want to do that type of consultation. They want a looooong relationship where they control your assets and the fees go on forever. Seems like a bit of a racket but maybe I'm being too cynical about this? Should I just submit to the system and pay somebody?

Flat fee is entirely the way to go. Don't pay an assets under management fee if you don't have to, especially if the portfolio value is over a million.

My parent's used Vanguard for awhile and their service was terrible.

I set my parent's up with this group who I found through this article- https://www.whitecoatinvestor.com/ho...ncial-advisor/

My parents are really happy with them.

They get unlimited access to a fiduciary CFA/CFP/RICP and who has them in very low cost index funds and optimizes their situation for tax strategy. They have regularly quarterly check in meetings with my parents and monthly disbursement checks sent to them for a flat fee per year. They would pay way more in AUM fees.

There are also some advisors on the White Coat Investor page that I linked to above that are willing to charge a one time fee for setting things up for you.

You could also do it yourself... www.bogleheads.org

[4matic]

I haven’t looked into the fees (says zero) but it’s a good way to learn about how allocation works. It will use the same metrics a human advisor uses:

https://www.schwab.com/intelligent-p...4aAm-pEALw_wcB

[4matic]

Did a quick search on Schwab robo. There are premium services at $300 a year and their portfolios do keep a high cash reserve relative to others. I like that part especially if you don’t need it to generate income because it will automatically balance back into other portions on weakness

[4matic]

Crude oil into support. Weak demand, high inventories, and a Middle East agreement could send it back to the $60’s