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Last night, I met with a Financial Planner associated with Ameriprise Financial. We spoke for about 45 minutes on goals, needs, etc….The upshot is the cost for services ranges from $550 - $700. The response involves analysis of all assets, retirement plans, estate planning and budget management. My income is modest at $35K with a 3% increase as of July 1. The services involve a team of financial folks to analysis and advise about investments most likely in mutual funds and stocks. I asked if there was a sliding scale on cost and that’s where the $550 came from. OF course, a higher fee gets a higher service.
I checked Ameriprise financial+scam on the internet and had a litany of complaints come back. Based on the range and number of complaints, I will move on. I don’t have the time or energy to do this myself. How on earth do you find a planner not tied to a larger organization? The other financial planner in the area is tied to Edward Jones which probably will have a similar scenario. What is a normal cost and how do I proceed?
I liked the service this guy would have delivered including follow up on a yearly basis. My debts include a mortgage which I would like to refinance and include an addition the house. The other debt is a 0% interest loan on a newly installed heat/hot water system. This will take 5 years to pay if I chose to take the slow root.
What is it that you are looking for a financial person to do for you? Are you just looking for investment recommendations or something else? What is your risk tolerance? If its low, you might not want to directly invest in stocks.
You can buy many mutual funds without a broker. Some companies allow you to buy just one share of stock through a DRIP (I think that's what its called) program, where you sign up for an ongoing basis to keep buying. I think brokers tend to specialize in either the high net worth individual or the unsophisticated investor, and often you are better off doing it yourself. Yes, I know you said you didn't have the time, but if you select something like an index fund, there's really no work at all. At the high net worth end, there are some funds with high minimum investment requirements that are only available through a broker.
For what its worth, I've known a few people that have worked for Ameriprise and or Edward Jones, and they had less investment background than I did. It was a second career for these folks, and while there was some training in the particular lines they were selling, I did not get the impression they had a well rounded financial education. So expecting them to pick what is right for you is really a gamble.
iris lily
6-20-12, 10:31am
While conventional wisdom will tell you to strike out on your own 'cause you will do just as well, there is nothing wrong with using a financial planner get your education up to speed. With that in mind, you'd better make sure that you are comfortable with his/her communication style.
I say that being pretty unsophisticated about our investments. DH is the mastermind of our family money. I check in once a year to look at our net worth, I state overview goals, and I make occasional decisions when he asks or when a particular investment opportunity comes up.
Some of our assets are with the local Edward Jones office down the street and I like that because it 1) supports a business in our little business district and 2) she was able to go out and buy particular municipal bonds for us when I flagged her that they were coming up for sale and I wanted in. I didn't have the time or knowledge to go shopping for them.
I would say your need to get up to speed on financial investing by reading as much as you can. The internet is ideal for getting financial information. Do this before you listen to a financial adviser. You need to know a little about investing to understand what they are advising and if it is the right method for you to use.
ABSOLUTELY STAY AWAY FROM AMERIPRISE! They have been at the losing end of class action lawsuits proving they operate against the interests of clients. Any agent will steer you toward the products that give them the most commission (and don't let them tell you they don't get commission - they absolutely get kick-backs, all agents of their ilk do. That's how they really make their money.
Okay, now on the constructive advice side. (I see Ameriprise and I start to bare my teeth and foam at the mouth!)
You are to be absolutely commended for taking on the challenge of being conscious about conserving your "life energy" and investing it wisely. There actually are some people out there who aren't crooks and who can help you preserve and build your resources for the long haul. I keep hunting for them, and although I can't say that about most financial advisors I've talked to, there are a few gems amidst the blockheads.
My rest draft post just got inadvertantly erased :|( and I have to run out to the bank (ironically) so will chime in with hopefully something you'll find useful later today. But in the meantime, I recommend reading the Financial Integrity Program Guide (http://financialintegrity.org/index.php?title=Downloadable_Guides) steps 8 & 9 to start to think about a framework for what you want to accomplish with your investments, and to develop your personal criteria. More soon...
Before hiring a financial planner, read this book first - Serious Money by Richard Ferri. He's a CPA who formerly did financial planning and knows all the tricks they use to make money from your money.
The reason I am considering a financial planner is I am 52 and want to understand wants, needs, goals at this stage of my life. The bulk of my savings is in TIAA Cref, I am not sure the distribution within the account is to my best advantage and an independent analysis considering I prefer a conservative approach to money management would be worthwhile. I have no desire to buy mutual funds or blocks of stock as I cannot see what my money is invested in. I have a social conscious about what my money is doing. I will not invest in tobacco industry to name one. I'd like to take my $5K out of the money market account and watch it grow by 3-4% yearly. There are ways to do that but I do not know how. Interest rates on mortgages are steady at 4% or so, considering mines is at 5.5% how can I take advantage of this considering I have only owned the house 2 1/2 years. These are questions for someone with experience and savvy within the financial marketplace. I just cannot wrap my little grey cells around this topic. It's dull as a door nail for me but not others. Someone suggested a traditional local accounting firm as a potential resource.
Cypress, I'm a huge fan of the Gardner brothers-the Motley Fools and with their books I got into two DRIPS and into Vanguard. They will tell you that "a broker is a salesman" Repeat that as many times as you can until the lightbulb goes off. What you may end up needing is a fee only planner who does not sell anything but advice. Hope I added something to the pot....
fidgiegirl
6-20-12, 6:21pm
You can use a fee-only financial planner who has no attachment or incentive to get you to sign up with them for anything. The idea, therefore, is that their advice will be what is best for YOU, not just what might be lucrative for THEM. We have used one and been happy. He cost about $200 to review our accounts and then have an hour-long meeting.
http://www.napfa.org/
simplelife4me
6-20-12, 7:44pm
Financial planners are a waste of money.
Financial planners are a waste of money.
And why do you feel that way, simplelife4me?
Last night, I met with a Financial Planner associated with Ameriprise Financial. We spoke for about 45 minutes on goals, needs, etc….The upshot is the cost for services ranges from $550 - $700.
About 20 years ago, my (then-)wife and I spoke with a financial planner at IDS (Ameriprise's original name). For a similar discussion and analysis (but no annual followup), we were charged around $350 and that seemed reasonable to me. When the planner came back essentially confirming my (undisclosed) plan, though, we quit going to financial planners for a while. :treadmill:
How on earth do you find a planner not tied to a larger organization? The other financial planner in the area is tied to Edward Jones which probably will have a similar scenario. What is a normal cost and how do I proceed?
For what it's worth, unless their model has changed a lot, Ameriprise is a fee-only financial planning firm. Yes, they offer their own portfolio of financial instruments, but you are under no obligation to buy them -- I was wary of that when we used them because IDS had very few funds which were near the front of their class. I had no intention of putting money into their funds.
That said, at one point in my life, I was ready for a different career. I enjoyed the money management aspect of it, so I went to one of IDS' career nights. What I found out is that you had to spend about as much time drumming up business as actually discussing needs and making recommendations. I got to the second round of interviews, but that position wasn't what I wanted.
Your best bet is to look for an accounting firm or independent financial planner. Look in the phone book or use your favorite Web search engine to type the name of your town and the words "financial planner" and see what comes up. There are certifications for planners; you can use that as a guide, too, if you value certifications.
[different post]
I am 52 and want to understand wants, needs, goals at this stage of my life. The bulk of my savings is in TIAA Cref, I am not sure the distribution within the account is to my best advantage and an independent analysis considering I prefer a conservative approach to money management would be worthwhile. I have no desire to buy mutual funds or blocks of stock as I cannot see what my money is invested in. I have a social conscious about what my money is doing.
Cypress, you really will be well-served by learning some on your own about investment. You say you have no desire to buy mutual funds, but I'm guessing your TIAA account likely is a bunch of mutual funds (or a default "lifestyle" fund geared to your cohort but not necessarily to your risk tolerance or social-investing preferences). As it turns out, mutual funds (good ones, not the mediocre ones loaded with fees) are inherently safer than individual stocks because of their built-in diversification). You also need to investigate for yourself the reality of making a real 3-4% (after inflation) on your money without what you perceive as risk and without investing in organizations you find objectionable. There are funds out there for "socially-conscious" investors, but are you willing to risk some of your savings -- and possibly "leave money on the table" -- to participate in them? Given their constraints, will they make enough money for you to meet your 3-4% objective? Can you live with less if it lets you sleep better at night?
Learning on your own will give you an idea of the possibilities -- or at least of the questions to ask a planner. You don't have to learn the ins and outs of credit default swaps and SPIDRs and ADRs; just the basic kinds of financial instruments (stocks, bonds, funds, trusts, etc.) and the major pluses and minuses of each from gain/loss and tax standpoints. Then talk with a financial planner. If the chemistry isn't right with that one, find another one if you can, even out of town. After the initial meetings, it's not like you have to be face to face every other week or month. Unless you need to be.
Good luck!
awakenedsoul
6-23-12, 11:24pm
I've heard and read very good things about a woman in Los Angeles named Libby Agran. I rented a room from her when I was a teen ager. I have been thinking of looking her up and asking her about investments. My father suggested Phillip Morris but I don't want to invest in tobacco, either. He also said Chevron gets a good return. (He has done very well in the stock market.) I feel safer investing in land.
I am a fan of Fidelity for brokerage services. They've provided me with several retirement planning tools and projections and a little budgeting help free of charge. Their advisers don't work on a commission basis and are not pushy, though they do favor their own products a little. I can't say enough about learning the ins and outs of investing on your own. My homework has basically saved my financial future from disaster. It doesn't hurt to have some advice or advisor to help, but I would not turn over the driver's seat to anyone.
After the last financial meltdown, I threw out a handful of my investment books as being outdated. My current favorite is "The Bogleheads Guide to Retirement", but it still isn't perfect.
I have almost given up on socially responsible investing. Socially responsible sector funds very generally have high fees and lower performance. Even some government bond money is used to fund the military. My opinion has come to the place where I think the most responsible portfolio is light on stocks and includes some things like municipal bonds and selected utilities.
awakenedsoul
6-24-12, 7:59pm
Rogar,
In Suze Orman's last book, The Money Class, she recommends utility companies like The Gas Co., too. That makes sense to me. Utilities are a need. She had most of her money in bonds and didn't lose anything. I read an article and she said that she likes to "keep what she has." She stays cash heavy, and sets goals to increase her income each year.
As far as business, I feel like food is a good business because people have to eat. I figure I could make more money selling fruits and vegetables to my dance and yoga students than I was making last year on classes! Plus, I wouldn't have the overhead.
jennipurrr
6-29-12, 7:56pm
The reason I am considering a financial planner is I am 52 and want to understand wants, needs, goals at this stage of my life. The bulk of my savings is in TIAA Cref, I am not sure the distribution within the account is to my best advantage and an independent analysis considering I prefer a conservative approach to money management would be worthwhile.
In my office I keep getting emails about planning sessions available with a TIAA rep or one from our other 403b provider (name escapes me right now...) I really assumed they were just selling sessions. I had a coworker who is not particularly financially savvy go and I was really impressed with what they did over the few months they have met. She is just starting a 403b, and is one of those folks who does not have a good savings strategy. They met several times before she even signed up to contribute to the 403b (which I am sure was the ultimate goal)...they got her house refinanced (lower term and rate), she started using mint.com, got some cash savings solidified, really a much more comprehensive plan than I expected. So, I would check and see what they offer as far as more advanced planning...you certainly don't have to take their advice, but it is free!
The Ameriprise folks here just try to get you to sign up for expensive insurance products...its a racket.
Cypress, If you are part of TIAA CREF you are entitled to meet for free with one of their planners who will discuss and benefits/risks of many different investment options. Granted, they are employees of TIAA CREF, but within TIAA CREF there are many options. Meeting with someone at TIAA should be one step--not necessarily the only or the last step in reviewing your situation and your goals.
I also do not like spending my life energy trying to figure out investments---I always feel that no matter how much I learn there are still whole areas that I don't even KNOW that I don't know. But we all are better off at least trying to get educated and self-empowered so that we at least have an understanding of what the questions might be and what the answers mean to us personally.
Having said all that, I would suggest considering one of Dave Ramsey's approved financial planners, and also do take a look at Financial Peace University. Dave's process is ethical and it works.
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