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post #1 of 17 (permalink) Old 02-07-2008, 01:36 PM Thread Starter
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Financial Management Options?

I have a few questions on financial planners:

To whom do you all go to handle all your financial investments? Did you just look someone up in the phone book (who has the biggest add )? Did you just go to one of those huge financial companies like Merrill Lynch or Charles Schwab? In your opinions, is it better to go to independent guys, or better to go with the big mega companies?

I was at my bank the other day (Chase) and the gentleman there said he would be happy to look over what I have now and give recommendations on what he would do with it. It sounded like he was offering this review for free, and then I would only pay the fees to buy the various investments. He mentioned that they (the bank) are a safe option as their investments are chosen by corporate JP Morgan. So its not like I am just trusting the expertise of "the guy at the bank" to pick smart investments. Is it ok to use your bank to handle all you money, or will I not get the best advice or returns this way? It "seems" nice to have a one stop shop to handle checking, savings, investments, retirement items, loans, etc. My only reservation is that in my experience, one stop shops for anything usually compromise all those services a little for that convenience, and the best service is still attained from direct specialists. Like going to Walmart, its all there, but nothing is of the highest quality.

Do all these financial planners charge fees just to review your information, or do some offer the advice and review for free and then take a cut only of what you earn with the money? Are there any unfair hidden charges or fees some of them try to sneak in that more honest advisors do not? Even if some planners charge fees to see them, is it money well spent as they will get you even more for your investments? Like "you get what you pay for".

Will most planners only talk to you if you have at least "x" dollars to play with? Does "x" vary depending on if you go to a small guy or Merril Lynch? How much does "x" typically need to be, 5k,10k,25k,100k+?

Thanks for any advice.
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post #2 of 17 (permalink) Old 02-07-2008, 03:18 PM
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most good planners won't talk to without $100k. I do it myself and save the fees, but that's not for everyone. If I had to pay someone I'd go to Northern Trust or B of A.

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post #3 of 17 (permalink) Old 02-07-2008, 03:24 PM
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the folks at my local branch of Chase have done the same thing. They don't charge you any fees to review your assets and make recommendations.

The only fees they will get is from whatever investment plan you decide to invest in through them.

I have consulted with financial analysts from co-workers and they usually want somewhere in the neighborhood of $2-3k per year to analyze your assets, interview you about your retirement goals and make recommendations on what to do with your finances.

So feel free to sit down at your local Chase branch and fill out their questionaire. It took me about 2-3 hours on a Saturday. A few days later they prepared a report and sat down with me again to discuss their recommendations.
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post #4 of 17 (permalink) Old 02-07-2008, 03:26 PM
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post #5 of 17 (permalink) Old 02-07-2008, 03:28 PM
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orly? wha hoppin???
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post #6 of 17 (permalink) Old 02-07-2008, 03:49 PM
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orly? wha hoppin???
+1 Did they underperform?
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post #7 of 17 (permalink) Old 02-07-2008, 04:02 PM
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Hope this helps but here's my shpiel on planners:

Most financial planners will give you a free "review" of your financial situation because:
1) they can see how much you have which will tell them how much they can make on you.
2) they can see what you don't have so they know what they can sell you.

Nothing against Financial Planners but you gotta remember that it is a sales job and that they want to make money also. Granted, it's in their best interest to help you make as much as possible because they get to see that profit also.

As far as using Chase, or any other financial institution, for all your financial matters is not always a good thing. If Chase goes to shit, for example, then another bank takes over and everything changes. It's good to have everying in close proximity but at the same time, it's good to diversify.

In my opinion, it's better to use a specialist as opposed to a "generalist" and not always focus on convenience.

Classic line: you get what you pay for. Be prepared to pay fees if you plan on investing with a planner. Shop around. Referalls are the best. Make sure you understand what you're getting into.

-Maciek

Last edited by ABSOLUTnie; 02-07-2008 at 04:08 PM.
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post #8 of 17 (permalink) Old 02-07-2008, 05:47 PM
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I work for a bank and I didn't say this but.. Most financial planners... are you know.. salespeople. They don't make money unless you buy stuff or make trades. Think of this way, if they were so good... they probably wouldn't be working.

Here are some good thinks they will ask and to think about,

All invesments with stocks/mutual funds should be long term, at least five years. Otherwise, you're pretty much gambling..

Anything shorter should or could be held in a bank product that is safe and secure or bonds.

Other questions are do you want growth or income, ect.. As far as what any financial planner is going to put you in, it is based on what relationship they have with which company. In other words, who are they in bed with? They will show you the history on each product... ect.

The best FP's I know have the authority to trade on behalf of their clients. As was suggested before, you should have 100k.

As far as Schwab, Lynch, Smith Barney or Chase.. They're all the same as far as I'm concerned for a small investor. You will not hear from them for a while after they close your sale.
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post #9 of 17 (permalink) Old 02-07-2008, 09:12 PM Thread Starter
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Hmm thanks for the advice. Sadly, I do not have that sum, so I guess I may be out of luck on this. I just got mad the other day thinking that an inflation figure I saw was beating my high interest savings account and I was losing money. I thought maybe it was time to at least get that small sum earning a little better.

I suppose as mentioned its worth going to my bank branch, just to see what they have to say. I will just have too keep in mind that risk is introduced by putting all my eggs in one basket. Funny you mention salesman. Talking with the financial guy felt EXACTLY like talking to a used car salesman. Thats why I asked if it was ok as the experience made me feel as dirty as when leaving a car dealer.

I wish I found money and money making as interesting as bikes/cars. If I read as many financial articles and books as I did worthless car/bike junk, maybe I would have a little more cash in my pocket.
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post #10 of 17 (permalink) Old 02-08-2008, 09:27 AM
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www.vanguard.com

Like the man said if you don't have a crapload of cash do it yourself.

Read John Bogle's book on Index Funds. He's the founder of Vanguard. Don't make it harder than it has to be. Once you've saved up enough then start talking to the bigger fish.

Oh, and if you've already spent your economic stimulus money that the govt just dropped on the President's desk yesterday then you're not starting off on the right foot.

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post #11 of 17 (permalink) Old 02-08-2008, 09:44 AM
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post #12 of 17 (permalink) Old 02-08-2008, 09:52 AM
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Quote:
Originally Posted by 78montecarlo View Post
I wish I found money and money making as interesting as bikes/cars. If I read as many financial articles and books as I did worthless car/bike junk, maybe I would have a little more cash in my pocket.
try it, you might like it. It's by far my biggest and most capital committing hobby. funny thing is it's a hobby that pays me instead of drains me.

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post #13 of 17 (permalink) Old 02-08-2008, 01:18 PM Thread Starter
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I suppose I can give it a try.

Which Bogle book? he has written several.

Common Sense on Mutual Funds
Bogle and the Vanguard Experiment
Little Book of Common Sense Investing
John Bogle on Investing, the first 50 years
Bogle on Mutual Funds: New perspectives for the intelligent investor
The Battle for the Soul of Capitalism

Or all of them

Do you all have other publications/books you recommend buying or subscribing to to get my feet wet if I am to start to try to figure this out myself? Something for a "newb" who knows practically nothing?

Thanks for the advice
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post #14 of 17 (permalink) Old 02-08-2008, 01:36 PM
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Well, if you're serious about investing, the BEST thing you can do is invest in yourself. Education, Training and personal growth will help you in the long run the most.

But yeah, most financial money managers make their money off your money, except if they lose money, you still have to pay them. Unless you've got 100k or more to work with, talk to any accountant. They'll give you solid advice.

FWIW, my family uses Northern Trust. Solid, but Expensive.
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post #15 of 17 (permalink) Old 02-08-2008, 02:09 PM
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Quote:
Originally Posted by 78montecarlo View Post
I suppose I can give it a try.

Which Bogle book? he has written several.
Common Sense on Mutual Funds

Check a library as it might not be a book you read from cover to cover. He makes his point on page one and then keeps making it on each of the other 200 pages so you'll get the point.

The little book might be a condensed version. Either way his point is that there is a less expensive way to play the saving game. Indexing can save money and for people who are starting out and don't want to have to check the market all the time (worry about buying and selling).

Is it fine for everyone? Not by a longshot. But you just need to start out from some point and this is a less expensice option than the standard higher fee funds.

Sure you can also open an Ameritrade account and invest in individual stocks but how are you to know which ones to pick? Maybe think about joining an investment club. In fact, I'm sorta surprised there isn't a Chicagoland Sportbikes stock investment club already. I bet someone here is involved in one somewhere. FWIW, they are sometimes a good place to meet chicks who save more than they spend. That's important to me at least.

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post #16 of 17 (permalink) Old 02-08-2008, 02:11 PM
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Do some resurch, I found some interesting info at fundadvice.com
If I were looking for a fincial planner I would look for someone who didn't make anything off my investments. Find someone you can pay by the hour, that way they won't be pressured into selling you anything.
Vanguard has some good funds and charges very low fees.

Steve
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post #17 of 17 (permalink) Old 02-08-2008, 02:24 PM
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Quote:
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If I were looking for a fincial planner I would look for someone who didn't make anything off my investments. Find someone you can pay by the hour
I'm not sure if its the Bogle book, The Millionare Next Door, or Freakonomics but one of them says that before they were to use a financial planner one requirement is that they would ask to see the planner's own tax returns for the last 5 years. If they prove that they make more money on their investments each year or are wealthier then you then maybe they'd use one.

The point is that many of these financial planners don't practice what they preach or aren't worth as much as you. Why give someone control of your money if they themselves don't have money or don't follow their own advise.

Remember, these guys aren't doing you any sort of free service. You just have to find out how they are making your money. Most of the time the tools are pretty simple. People can save a lot by creating a budget or by reviewing their tax liability before Apr 15 and making adjustments.

Besides, they can't guaranty results. A better bet is to read a lot and invest in what you think is worthy. If you know HD DVD is going into the toilet and Blu Ray is awesome maybe find a stock that takes advantage of that.

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