Questions to ask Financial Advisors we interview before retiring

[mathjak107]

Originally Posted by bgrasser

In another life I hired a fee only financial advisor, I dumped him fast when I realized his goal was to structure a plan with up front load and high fee funds, along with annuities.
Since then, I subscribe to a monthly financial newsletter, and balance my portfolio with no load low fee funds.

you are likely confused between fee only and fee based adviser . many fee only advisers eventually get trained and certified to sell things like annuity products . they don't stay fee only -they become fee based . there is a difference between fee only and fee based which is what i bet that guy was .
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"Another word for a fee-only financial advisor would be a "no commission" advisor. Fee-only advisors can only receive compensation directly from you (like a CPA or attorney) versus being paid by commissions from products they sell. There are many, many reasons why you would want to choose a fee-only advisor.
Fee-Only Advisors Have a Fiduciary Standard
Fee-only advisors, or fee-only financial planners, almost always operate as fiduciaries.

A fiduciary must legally give advice that is in their client's best interest.
You would think all financial advisors would be required to give advice that is in their client's best interest - but that is not so. The majority of the financial advice industry has a "suitability standard." Suitability means a recommendation must be appropriate based on your financial status and goals - but if one product pays the advisor more than another, and both are suitable, they can recommend the product that pays more even if it may not be the best choice for you out of the two options. Ask a potential advisor if they have a fiduciary responsibility to you or a suitability standard. You want the answer to be fiduciary.
Starting in summer 2017, due to a new Department of Labor law called the Fiduciary Rule, a fiduciary standard may apply to almost all financial advisors who give advice on retirement accounts.

This new fiduciary rule, however, still won't apply to advice provided on investments held outside of retirement accounts. That means to find an advisor who can offer advice in your best interest you will still have to do your homework.
How Fee-Only Advisors Are Compensated
A fee-only financial advisor cannot receive compensation from a brokerage firm, a mutual fund company, an insurance company, or any source other than you.

They represent you and your interests when giving you advice. I think it makes sense to seek out fee-only advisors, after all, think about where someone's paycheck comes from, and that will tell you quite a bit about where their loyalty lies.
A fee-only advisor may have a rate that based on a percentage of the assets they manage for you, and thus debited out of your account each quarter, or it could be a flat annual fee, or an hourly rate.
Some financial advisors use the term "fee-based" to describe how they charge for their services. Fee-based is not the same thing as "fee-only."
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Fee-Based Is Not the Same As Fee-Only
A fee-based financial advisor can receive fees paid by you, and commissions paid to them by a brokerage firm, mutual fund company, insurance company, or investment partnership. These fees should be disclosed to you.
Many advisors who use the term "fee-based" recommend something called a managed account. The investments offered inside this managed account may pay incentives to the company the advisor works for, which means it may not be as objective as it appears.
Even though both fee-only and fee-based financial advisors may have accounts they manage where they charge a percentage of the assets, the investments they place inside these accounts can be very different.

Fee-only financial advisors have a fiduciary responsibility to choose investments that are in your best interest. They typically use investments that have low internal expenses, such as no-load mutual funds, stocks, and bonds; investments that have no 12(b)1 fees.
Regardless of how they are compensated, financial advisors differ in the services they offer. Some offer only investment management, while others include financial planning as part of their offering, and some are specialists, such as those who specialize in retirement planning. It is important to decide which type of financial services you need so you know what type of advisor to look for.

https://www.thebalance.com/what-is-a...dvisor-2388452

[bgrasser]

Call them what you like, I paid a fee, they structured a plan with front end loaded funds, and higher fees compared to
funds I currently hold. I'm not sure if commission was paid by others or not.
With due respect to people that work in the world of finance, if one has the time and resources, you can
steer your ship.

[mathjak107]

there is a big difference between the two so you do want to make sure you understand that you did not see a fee only planner .

as far as steering your own ship ? planning is so much more than buy voo and agi and have a nice life .

i wish i was smart enough in the earlier days to know all the things i needed to know about retirement planning when i laid the building blocks in place .

i mistakenly thought because i was doing well investing i knew whatever i needed to know . well all the things i didn't know that i didn't know got me later on and it was to late to redesign things . there is so much linked to retirement taxable income as well as what assets to put in what vehicles , as well as how they mesh with rmd's and everything income dependent , that you want to get this right early on .

my tax situation would be so different if i saw a knowledgeable planner early on , but who knew i didn't know what i didn't know .

[craigiri]

Put your money in Buffets fund and forget about everything else.

[mathjak107]

not a bad choice but you dropped the ball with the " forget everything else " there certainly is more to putting a diversified portfolio together as well as a whole lot more that is involved with financial planning.

much of poor investor behavior in down turns is because of poor financial planning and taking money invested in long term assets and trying to use it for short term needs.

the best investment in the world does not mean much if it is not right for you or you don't or can't stay the course