Any Financial Advisors out there?

[Pennylane]

The only financial help we have right now is the Advisor at our Bank. While she seems competent enough, I have heard it is best to deal with a Fee only Financial Advisor rather than someone associated with a bank or investment firm (like Fidelity or Schwab).

Does anyone have any experience with this. I have been bugging my husband to find someone for the past year and have given up on him doing it.

Thanks,
Ann

[mskitty]

The only one who truly has your best interests in mind is YOU. I highly recommend becoming financially savvy on your own. Start reading... Kiplingers is my preferred personal finance mag. The Motley Fool(www.fool.com) is a good online site for personal finance. I think the best general book is Jane Bryant Quinn's "Making the Most of Your Money" which was published in 1997. It's a huge book and gives good coverage to a lot of issues.

Check out the website www.napfa.org This is the umbrella organization many fee only advisors belong to. They are also sponsering a free call in session with Kiplingers on Friday January 26, 2007 from 9am to 6pm eastern time. 1-888-919-2345.

Anyone can call themselves a financial advisor, planner, etc. You have to be licensed to sell securities (Series 7,etc). If they have a securities license, make sure you check their Form ADV Part II which will show any major issues they have had. A Certified Financial Planner (CFP) has passed a two day comprehensive exam. They usually are better than a plain old securities salesperson.

How the financial person is compensated is a big thing. Most brokers are paid by commision (A, B or C shares of mutual funds, straight commisions on stock trades). They have a huge financial incentive to get you to buy. Do you know most advisors take a 5-7% commision by selling a loaded mutual fund to you? That means if you buy $10,000 of an A share mutual fund, $500 goes directly to them. Generally I would suggest a fee based advisor who you pay by the consultation. A fee for assets under management can be okay if you get the service you deserve since they are getting paid regularly.

I would avoid a single shop... such as Fidelity, American Century, Waddell & Reed, Thrivent, etc. They can't recommend items outside of their parent company. Vanguard is alright...they have low fees on their mutual funds, index funds and exchange traded funds in addition to their own mutual funds.

Schwab is basically a lower cost mutual fund superstore of no load mutual funds. They don't have the lowest fees but have access to thousands of mutual funds including the most of the really good ones and the stock market. You do pay fees at Schwab but I'd rather pay $49.95 a trade than write a check for $500 to a full service broker for the same fives minutes of advice.

Hopefully that answered a bunch of your questions....


MsKitty, previously licensed to sell securities

[HGraceMom]

My DH is a Fee Only advisor - he started his own botique-type firm 5 years ago, and was recently registered by the SEC (hooray!!!). I definitely recommend going this route with an advisor. It's amazing how many client portfolios he reviews where the accounts hold annuities (HIGHEST kickbacks around) and the Highest possible commission option of mutual funds in a group.

BTW... Because he doesn't custody or "hold" his clients assets, he is not required to hold any licenses. They custody through Schwab because, like the PP mentioned, they have a huge range of products available, and a great support system for FOFAs.

HTH -

[Pennylane]

Thanks to you both for your help. I just feel so confused about were to start and am petrified of losing our hard earned $$. I checked the website for fee only advisors in our area and found a few so I guess I will start there.

Thanks again for all the great advice!!

Ann