Sometime now and then, so called “financial advisors” cannot stop when to cut themselves off from signing up for their funds/accounts. They will boast about how great their portfolios are and brag about the bright sides, but will glitch whenever the “dark sides” are (about to be) referenced and mumble and move onto another topic abruptly on their own pace. They basically act like cheap car salespersons. What kind of pathetic compensation structure do they run on? This commission-based sales really annoys customers, and we have to bear the guts to say no to them.
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- Facebook public2Stop dealing with the sales guys and get a fee only fiduciary. It's that simple.
- FA's don't make sense unless you have at a few million or maybe tens of millions to invest. At that point they can do interesting things with private equity, tax planning, trust funds, equity exchange funds, etc. and access a variety of financial products that can only be sold to accredited or qualified investors.
For anything less than about 5mil you are better off putting your money in a lot fee mutual funds and using a CPA for basic tax planning.
- 1. Mutual funds good. For someone investing under 5 million I would say dump all into a market index fund, eg, vanguard VTSAX or choose the ETF version, VTI. At that level of income your goal is to lower fees and maximize exposure to the market. This likely covers 90% of people for life.
2. For someone investing under a few million a CPA will be much cheaper and give you good enough tax advice for your common and simple situation, financial planning at this level is making a budget and understanding how your home and employment or small business will be taxed. Your CPA has seen hundreds of cases just like yours and can tell you what you need to know for a much lower and simpler free on than you will get from a planner or advisor.
With over a few million in assets and particularly when you get to the tens of millions then FA's can start to do things you can't do easily yourself and which are beyond what a CPA can do, and you start thinking a lot more about things like estate planning and trust funds that don't make much sense for smaller portfolios. It also starts making sense to diversify into private equity and you may have complex capital gains that benefit from equity exchange products and other things that can only be sold to qualified investors.
- Why are you talking to these people? Find yourself a good financial advisor who doesn’t do this.
- Btw I disagree with wexxer. A good financial advisor more than earns their fee, even if you don’t have a couple million.
If you have the time and knowledge to set yourself up to not only take advantage of a bull market, but to protect yourself in a bear market and to follow the trends so you know how and when to position yourself for either, good for you. Continue to do that and I hope you do well.7d 0