Topic: Financial advisors

[Always THE HERD]

I currently have a financial advisor and have had one for approx. 16 years or so. My question to those of you who may use one is this: Should a person seek a privately owned company, a bank or credit union etc. Which place do you feel is best for maximum value?

[Big City]

My wife and I work with Huntington and have a great relationship with our advisor. Great communication and excellent with advice, planning etc.

[Always THE HERD]

My wife and I work with Huntington and have a great relationship with our advisor. Great communication and excellent with advice, planning etc.

So, you prefer to work with an advisor from a bank? Is that correct?

[marshallmark]

So, you prefer to work with an advisor from a bank? Is that correct?

I use Janney out of Pittsburgh and have been very pleased. 

[Big City]

So, you prefer to work with an advisor from a bank? Is that correct?

Yes, to me it's just easier that way. We do a lot of business with Huntington and they also have my LLC accounts.

[herdloyal]

If anyone has not put everything into a proper Structured Trust got yourself out of system you?re screwed! Lose the name to win the game as we say. 1% do it in everything. Bankers are not the most informed and Banks are not anything but brokers themselves. I am totally out of the system. Federal Credit Union are the most solvent at this time and we all should have Gold and Silver hard assets at this time and access to them in a properly insured and bonded Safekeeping house with SKR (Receipts). Texas is becoming the safest place for assets in the country why? Texas can tell Washington to go to hell! It is a true Republic in every sense of the word.

[Flat Tire 2]

I would make sure whoever you hire that they would have a fiduciary responsibility. Be sure to check the fees they charge.

[Always THE HERD]

I would make sure whoever you hire that they would have a fiduciary responsibility. Be sure to check the fees they charge.

How can that be proven? Is it included in their profile?

[Flat Tire 2]

How can that be proven? Is it included in their profile?

Just ask the company, SEC requires companies or individuals to inform clients of their fiduciary responsibility if they have one. It also should be noted in the sales prospectus. 

[Always THE HERD]

Just ask the company, SEC requires companies or individuals to inform clients of their fiduciary responsibility if they have one. It also should be noted in the sales prospectus.

What about a banking institution?

[Flat Tire 2]

What about a banking institution?

Just ask them or anyone you are considering. Read the prospectus that they are required to give you.

[Always THE HERD]

Just ask them or anyone you are considering. Read the prospectus that they are required to give you.

I've tried to find one in Beckley WV (25801) without success.

[miltonherdfan]

ATH, you stated you currently have a FA. Why are you looking to switch? & what kind of outfit is your current FA with (bank, broker, etc)?

[Always THE HERD]

ATH, you stated you currently have a FA. Why are you looking to switch? & what kind of outfit is your current FA with (bank, broker, etc)?

Bank

[miltonherdfan]

I currently have a financial advisor and have had one for approx. 16 years or so. My question to those of you who may use one is this: Should a person seek a privately owned company, a bank or credit union etc. Which place do you feel is best for maximum value?

i use a mutually-owned company -- northwestern mutual.  they're known for their insurance, but they do it all. I've been with my advisor for over 20 yrs & been really pleased.

[carolinaherdfan]

i use a mutually-owned company -- northwestern mutual.  they're known for their insurance, but they do it all. I've been with my advisor for over 20 yrs & been really pleased.

I know the terms financial planner and financial advisor are used inter changeabllly, but a planner is a well educated person and an advisor needs to be vetted...

Northwestern is one of several companies to have planners...

[chris88]

I have been an advisor for some time. I don't even think I have been very good at it for reasons explained below. I would do some things much different if I were starting today.  Due to level of debt by the country etc and other things I am NOT accepting any new clients. I don't think navigating the financial future will be easy. In fact I think it will be near impossible. I also will not recommend anyone so please don't ask.  The ONLY reason i'm responding is I know alot of people need help and don't understand the industry at all. What you read here is my opinion based on my experience in the industry. You have to make your own decisions and since everyone's situation is different do not construe what I say as advice. Maybe I'll write a book some day. Here goes:

It doesn't matter where they work for most part except certain institutions (yes banks and Insurance companies and others) often limit what they allow their advisors to invest in. They put you in a box that they think fits you. If it is determined you should be in a e 60/40 (stocks/fixed income) you will be in same box as everyone else with that mix...meaning you'll have the same investments. Almost all will have you overdiversified. Overdiversification is the springboard to underperformance (Warren Buffet and I agree on that). Many of them will use institutional or proprietary funds and try to sell you other products under their umbrella. There are good advisors at those places despite their restrictions. Institutional advisors are almost all "buy and hold" advisors and most can't even tell you what companies make up their funds. Independents or non captive advisors have much more flexibility but that can be dangerous too depending on your situation and risk tolerance. They, in my opinion, are more likely help you avoid big losses because they may be open to not just "buy and hold" strategies. They don't have the same restrictions of working with same fund companies. They should be able to use any and all for most part. If they recommend an annuity, they will likely have access to almost all companies and know how to compare to find you the best assuming they know what they are doing. "Buy and hold" has been effective for most for several decades with same caveats I won't discuss. I'm not sure that it will be better going forward.

Here are some things i've learned many people won't like:

- The stock market is rigged against individual investors.  Institutional buyers/sellers (pension funds etc), hedge funds, day traders, option houses, consortium of short sellers etc all have huge advantages over retail investors and retail advisors. They can have huge impacts on markets swings and even bigger impacts on individual stocks etc.  They decide in many cases what goes up and down and when, they often have inside information, and have huge timing advantages. You may say "yea everybody knows that" but it is to a much larger degree that most could imagine. Think of them as the "house" in a casino operation.

- Modern portfolio theory is a joke and so is ESG investing.

- I estimate 90%+ of general public doesn't understand investing to the extent that they should if they are investing at all.  They don't know the right questions to ask, when to ask them, and how to ask them. Thus they have no idea about how to evaluate the answers. The line from movie "Wall Street" that "those boys don't know preferred stock from livestock" is more true than most would believe.

- Most advisors don't know what they don't know. Meaning the institutional advisors and some indy's all believe the products they use are the best. That is because most use a limited number of things mentioned above and it's all they know.

- The graphs and charts they show you are pretty much just for your piece of mind and mostly bs. You likely won't remember what any of it means or ever refer to it outside your meetings.

- The majority of target mutual fund (2030 fund for example) options in 401k etc are subpar. Too many companies in their funds, too much crossover/overlap, and due to rules about funds, each option generally has some good funds, some middle road, and some bad funds. That leads to underperformance in up and down markets.

- For all of these reasons and more, most advisors and their products rarely, if ever, beat the indexes and that is before fees. If you have a 60/40 mix and you just put the 60% in an SP500 index ETF and 40% in an aggregate bond index ETF you will most likely beat the performance of whatever the hodgepodge of investments your advisor puts you in over just about any period of time. But remember, a big part of their job is to manage your risk tolerance and emotions. Not to overreact or underreact to things going on. Performance is just one metric.

So the key, in my opinion, is to find someone you like but especially trust...no matter where they work. Someone open to things that are best for you and not just them. If an advisor says "I don't like annuities" for example I would steer clear of them because annuities in this environment can be one of best options for retirement income for SOME people. Someone capable of thinking outside the box for your situation. Someone you feel like is accessible almost 24/7 and not just an annual or semi annual meeting if YOU want more communication. I mean if you can call your advisor about a subject that goes beyond the financial ramifications to your account and say, "I'm thinking about buying a car, can we talk through the advantages and disadvantages of doing so at this time and whether new or used is better etc". This is a good advisor. Fees should be reasonable. Anything over say 1.5% is likely not value warranted in my opinion unless they are outperforming consistently. If you like your current advisor and what they have done for you there is no real reason to allow some person off the street to evaluate your portfolio. It's easy to poke holes in anything without an apples to apples comparison. Someone capable of keeping it simple. Like I said, most won't beat the indexes anyway. Pray about your decisions.

[Always THE HERD]

I have been an advisor for some time. I don't even think I have been very good at it for reasons explained below. I would do some things much different if I were starting today.  Due to level of debt by the country etc and other things I am NOT accepting any new clients. I don't think navigating the financial future will be easy. In fact I think it will be near impossible. I also will not recommend anyone so please don't ask.  The ONLY reason i'm responding is I know alot of people need help and don't understand the industry at all. What you read here is my opinion based on my experience in the industry. You have to make your own decisions and since everyone's situation is different do not construe what I say as advice. Maybe I'll write a book some day. Here goes:

It doesn't matter where they work for most part except certain institutions (yes banks and Insurance companies and others) often limit what they allow their advisors to invest in. They put you in a box that they think fits you. If it is determined you should be in a e 60/40 (stocks/fixed income) you will be in same box as everyone else with that mix...meaning you'll have the same investments. Almost all will have you overdiversified. Overdiversification is the springboard to underperformance (Warren Buffet and I agree on that). Many of them will use institutional or proprietary funds and try to sell you other products under their umbrella. There are good advisors at those places despite their restrictions. Institutional advisors are almost all "buy and hold" advisors and most can't even tell you what companies make up their funds. Independents or non captive advisors have much more flexibility but that can be dangerous too depending on your situation and risk tolerance. They, in my opinion, are more likely help you avoid big losses because they may be open to not just "buy and hold" strategies. They don't have the same restrictions of working with same fund companies. They should be able to use any and all for most part. If they recommend an annuity, they will likely have access to almost all companies and know how to compare to find you the best assuming they know what they are doing. "Buy and hold" has been effective for most for several decades with same caveats I won't discuss. I'm not sure that it will be better going forward.

Here are some things i've learned many people won't like:

- The stock market is rigged against individual investors.  Institutional buyers/sellers (pension funds etc), hedge funds, day traders, option houses, consortium of short sellers etc all have huge advantages over retail investors and retail advisors. They can have huge impacts on markets swings and even bigger impacts on individual stocks etc.  They decide in many cases what goes up and down and when, they often have inside information, and have huge timing advantages. You may say "yea everybody knows that" but it is to a much larger degree that most could imagine. Think of them as the "house" in a casino operation.

- Modern portfolio theory is a joke and so is ESG investing.

- I estimate 90%+ of general public doesn't understand investing to the extent that they should if they are investing at all.  They don't know the right questions to ask, when to ask them, and how to ask them. Thus they have no idea about how to evaluate the answers. The line from movie "Wall Street" that "those boys don't know preferred stock from livestock" is more true than most would believe.

- Most advisors don't know what they don't know. Meaning the institutional advisors and some indy's all believe the products they use are the best. That is because most use a limited number of things mentioned above and it's all they know.

- The graphs and charts they show you are pretty much just for your piece of mind and mostly bs. You likely won't remember what any of it means or ever refer to it outside your meetings.

- The majority of target mutual fund (2030 fund for example) options in 401k etc are subpar. Too many companies in their funds, too much crossover/overlap, and due to rules about funds, each option generally has some good funds, some middle road, and some bad funds. That leads to underperformance in up and down markets.

- For all of these reasons and more, most advisors and their products rarely, if ever, beat the indexes and that is before fees. If you have a 60/40 mix and you just put the 60% in an SP500 index ETF and 40% in an aggregate bond index ETF you will most likely beat the performance of whatever the hodgepodge of investments your advisor puts you in over just about any period of time. But remember, a big part of their job is to manage your risk tolerance and emotions. Not to overreact or underreact to things going on. Performance is just one metric.

So the key, in my opinion, is to find someone you like but especially trust...no matter where they work. Someone open to things that are best for you and not just them. If an advisor says "I don't like annuities" for example I would steer clear of them because annuities in this environment can be one of best options for retirement income for SOME people. Someone capable of thinking outside the box for your situation. Someone you feel like is accessible almost 24/7 and not just an annual or semi annual meeting if YOU want more communication. I mean if you can call your advisor about a subject that goes beyond the financial ramifications to your account and say, "I'm thinking about buying a car, can we talk through the advantages and disadvantages of doing so at this time and whether new or used is better etc". This is a good advisor. Fees should be reasonable. Anything over say 1.5% is likely not value warranted in my opinion unless they are outperforming consistently. If you like your current advisor and what they have done for you there is no real reason to allow some person off the street to evaluate your portfolio. It's easy to poke holes in anything without an apples to apples comparison. Someone capable of keeping it simple. Like I said, most won't beat the indexes anyway. Pray about your decisions.

I concur with everything you have said. The overall system is rigged and most likely cannot improve/change, due to the fact throughout the world, there are just a very small elite group of the "super wealthy" individuals who control most of what happens today.

[gtrman4herd]

i use a mutually-owned company -- northwestern mutual.  they're known for their insurance, but they do it all. I've been with my advisor for over 20 yrs & been really pleased.

Same I have used my agent with Northwestern for the past 30 years. Hes' done a very good job for me

[Flat Tire 2]

I have been an advisor for some time. I don't even think I have been very good at it for reasons explained below. I would do some things much different if I were starting today.  Due to level of debt by the country etc and other things I am NOT accepting any new clients. I don't think navigating the financial future will be easy. In fact I think it will be near impossible. I also will not recommend anyone so please don't ask.  The ONLY reason i'm responding is I know alot of people need help and don't understand the industry at all. What you read here is my opinion based on my experience in the industry. You have to make your own decisions and since everyone's situation is different do not construe what I say as advice. Maybe I'll write a book some day. Here goes:

It doesn't matter where they work for most part except certain institutions (yes banks and Insurance companies and others) often limit what they allow their advisors to invest in. They put you in a box that they think fits you. If it is determined you should be in a e 60/40 (stocks/fixed income) you will be in same box as everyone else with that mix...meaning you'll have the same investments. Almost all will have you overdiversified. Overdiversification is the springboard to underperformance (Warren Buffet and I agree on that). Many of them will use institutional or proprietary funds and try to sell you other products under their umbrella. There are good advisors at those places despite their restrictions. Institutional advisors are almost all "buy and hold" advisors and most can't even tell you what companies make up their funds. Independents or non captive advisors have much more flexibility but that can be dangerous too depending on your situation and risk tolerance. They, in my opinion, are more likely help you avoid big losses because they may be open to not just "buy and hold" strategies. They don't have the same restrictions of working with same fund companies. They should be able to use any and all for most part. If they recommend an annuity, they will likely have access to almost all companies and know how to compare to find you the best assuming they know what they are doing. "Buy and hold" has been effective for most for several decades with same caveats I won't discuss. I'm not sure that it will be better going forward.

Here are some things i've learned many people won't like:

- The stock market is rigged against individual investors.  Institutional buyers/sellers (pension funds etc), hedge funds, day traders, option houses, consortium of short sellers etc all have huge advantages over retail investors and retail advisors. They can have huge impacts on markets swings and even bigger impacts on individual stocks etc.  They decide in many cases what goes up and down and when, they often have inside information, and have huge timing advantages. You may say "yea everybody knows that" but it is to a much larger degree that most could imagine. Think of them as the "house" in a casino operation.

- Modern portfolio theory is a joke and so is ESG investing.

- I estimate 90%+ of general public doesn't understand investing to the extent that they should if they are investing at all.  They don't know the right questions to ask, when to ask them, and how to ask them. Thus they have no idea about how to evaluate the answers. The line from movie "Wall Street" that "those boys don't know preferred stock from livestock" is more true than most would believe.

- Most advisors don't know what they don't know. Meaning the institutional advisors and some indy's all believe the products they use are the best. That is because most use a limited number of things mentioned above and it's all they know.

- The graphs and charts they show you are pretty much just for your piece of mind and mostly bs. You likely won't remember what any of it means or ever refer to it outside your meetings.

- The majority of target mutual fund (2030 fund for example) options in 401k etc are subpar. Too many companies in their funds, too much crossover/overlap, and due to rules about funds, each option generally has some good funds, some middle road, and some bad funds. That leads to underperformance in up and down markets.

- For all of these reasons and more, most advisors and their products rarely, if ever, beat the indexes and that is before fees. If you have a 60/40 mix and you just put the 60% in an SP500 index ETF and 40% in an aggregate bond index ETF you will most likely beat the performance of whatever the hodgepodge of investments your advisor puts you in over just about any period of time. But remember, a big part of their job is to manage your risk tolerance and emotions. Not to overreact or underreact to things going on. Performance is just one metric.

So the key, in my opinion, is to find someone you like but especially trust...no matter where they work. Someone open to things that are best for you and not just them. If an advisor says "I don't like annuities" for example I would steer clear of them because annuities in this environment can be one of best options for retirement income for SOME people. Someone capable of thinking outside the box for your situation. Someone you feel like is accessible almost 24/7 and not just an annual or semi annual meeting if YOU want more communication. I mean if you can call your advisor about a subject that goes beyond the financial ramifications to your account and say, "I'm thinking about buying a car, can we talk through the advantages and disadvantages of doing so at this time and whether new or used is better etc". This is a good advisor. Fees should be reasonable. Anything over say 1.5% is likely not value warranted in my opinion unless they are outperforming consistently. If you like your current advisor and what they have done for you there is no real reason to allow some person off the street to evaluate your portfolio. It's easy to poke holes in anything without an apples to apples comparison. Someone capable of keeping it simple. Like I said, most won't beat the indexes anyway. Pray about your decisions.

I have been in the stock market since the mid 1970's and I am retired and currently have all my equity investments with Vanguard Advisors. I got a request from Vanguard Advisors wanting to have a Zoom meeting with me. I currently have all my investments in the Vanguard Moderate portfolio. The portfolio model normally has 40% of your equities in international funds, but I only have a 20% stake in international funds. It seems that Vanguard might change their policy and not let the investor modify their accounts. I pointed out to the Vanguard advisor that the five year YTD performance or return of international stocks is 3.5% versus 9.8% for the total US stock market return.

A couple of my thoughts on investing in stock market for nearly 50 years. Over time, index funds will outperform most managed funds. The stock algorithms do control the stock market, but you are better off investing in an index fund versus purchasing you own stocks. Know your fees, expenses can eat up a lot of your profits for long term investors. You get exposure to international stocks with the US Stock Market since a lot of US companies do business overseas. I agree with you about over diversification for younger investors, but not for a retired person. Always go with ETF funds.

Over the years I had funds with American Century and Fidelity which had high fees and that is why I consolidated my equities at Vanguard which have 0.04% fees for Total US Stock Mark Admiral Shares. High fees will kill you over time. Fidelity has an office in the city I live in Florida. I was shocked when I found how that Fidelity had dropped is its fees. FBALX (Balanced Fund) now has a 0.43% fee Vanguard has 0.18% fee! YTD for Vanguard is 9.6% and Fidelity is 13.32% so you could make more money with Fidelity. Of course Fidelity is a managed fund and Vanguard is an index fund. I may move some money over a the Fidelity fund.

[chris88]

I have been in the stock market since the mid 1970's and I am retired and currently have all my equity investments with Vanguard Advisors. I got a request from Vanguard Advisors wanting to have a Zoom meeting with me. I currently have all my investments in the Vanguard Moderate portfolio. The portfolio model normally has 40% of your equities in international funds, but I only have a 20% stake in international funds. It seems that Vanguard might change their policy and not let the investor modify their accounts. I pointed out to the Vanguard advisor that the five year YTD performance or return of international stocks is 3.5% versus 9.8% for the total US stock market return.

A couple of my thoughts on investing in stock market for nearly 50 years. Over time, index funds will outperform most managed funds. The stock algorithms do control the stock market, but you are better off investing in an index fund versus purchasing you own stocks. Know your fees, expenses can eat up a lot of your profits for long term investors. You get exposure to international stocks with the US Stock Market since a lot of US companies do business overseas. I agree with you about over diversification for younger investors, but not for a retired person. Always go with ETF funds.

Over the years I had funds with American Century and Fidelity which had high fees and that is why I consolidated my equities at Vanguard which have 0.04% fees for Total US Stock Mark Admiral Shares. High fees will kill you over time. Fidelity has an office in the city I live in Florida. I was shocked when I found how that Fidelity had dropped is its fees. FBALX (Balanced Fund) now has a 0.43% fee Vanguard has 0.18% fee! YTD for Vanguard is 9.6% and Fidelity is 13.32% so you could make more money with Fidelity. Of course Fidelity is a managed fund and Vanguard is an index fund. I may move some money over a the Fidelity fund.

I think you misunderstood my point about overdiversification. Young and old investors should be diversified but not overdiversified. Owning an indexed based ETF is diversified but not over diversified, there is a difference. However, many portfolio's have people in 6 to 15 different mutual funds and/.or ETFs and each fund/ETF has hundreds of companies. That is over diversification. The overlap will be significant. Honestly, a couple of indexed ETF equity funds and a couple of ETF bond/fixed income funds is probably enough for most people. Most Intl funds are not US funds doing business overseas, they are non US based companies.  Most advisors could not tell you much of anything about the top 5 holdings. They are selling diversification while frequently not fully accounting for added risk. The performance of any fund/ETF is relative to benchmarks which are confusing to most investors. SPY ETF mirrors SP500 with very low fee structure, easy to understand, and easy to track. It is a large cap blend ETF. SPY is up 16.67% YTD. Why even have an equity based Fidelity Fund/ETF or Vanguard fund/ETF that gets less?? That's my entire point. Honestly, you have a much better chance making a performance difference in the bond/fixed income side of a portfolio than the equity side when you fully consider risk in my opinion.

Sounds like you have done well with whatever strategy over time so you are doing something right:)

[Flat Tire 2]

Chris88 do you have any thoughts about Rob Berger? https://robberger.com/

I just found his videos and he seems to take a more conservative approach to investing. He seems to favor index funds over managed funds. He is big on the risk versus rewards of a fund and the problem when managed funds change managers.

[chris88]

Chris88 do you have any thoughts about Rob Berger? https://robberger.com/

I just found his videos and he seems to take a more conservative approach to investing. He seems to favor index funds over managed funds. He is big on the risk versus rewards of a fund and the problem when managed funds change managers.

I think he has some good information on his site. Some appears to be geared to a higher net worth or higher financially educated audience but lots of good stuff about the best of xyz. Would have to read the book to get a better idea.  For anyone into ETFs, here is a link to ETF database screener that can be used to compare ETFs.  You have to play with it a little but it is one of best ETF sites imo.  https://etfdb.com/screener/#page=1&sort_by=name&sort_direction=asc&asset_class=bond&issuer=charles-schwab%2Cfidelity%2Cfirst-trust%2Cvanguard%2Cwisdomtree

I wholeheartedly agree that equity index mutual funds or especially equity indexed ETFs are better than managed funds for a variety of reasons. They are simpler, cheaper, outperform managed funds for most part, and don't have portfolio turnover implications. I once audited every Voya managed fund vs SP500 ETF SPY and not one of their funds outperformed the index over time. All underperformed. That's when I stopped using equity mutual funds/managed funds. I once audited a huge local firm who claimed to have top notch proprietary investments. Every equity fund they created underperformed the SP500 Index fund SPY some by double digits consistently. I have had literally hundreds of vendors tell me their product is better than XYZ or a great product. Most were either new without much if any track record during recessional times or underperformed SPY or similar SP500 index fund. Something I left off my initial email is the importance of getting out of debt.  That will be huge going forward. Be blessed.

[Flat Tire 2]

Chriss88 thanks for your response. I found one of Berger's videos about comparing Fidelity's Balance Fund compared to Vanguard's Balance Fund.

Here is the link to any posters who are looking for moderate exposure in stocks and bonds.