Financial Question

[Cacia]

I have looked around at forums like Kiplinger's, etc...they surprisingly don't have much traffic/ activity.

I like getting information here, I find so much good advice.

here is my question.

If you look for an independent financial advisor...and get names of cats from Morgan Stanley, Smith Barney, etc....after charging you the 1% or so to build a portfolio, do they get another commission on the various funds they put you in?

(If you google independent advisors, you get them....but are they independent if they run everything through one brokerage house?)

How does one word the question to see ALL the expenses? (since they have so many slippery names?)

Are these loaded funds? (mutuals at Morgan Stanley, Smith Barney?)

Can you hire an independent "fee for service" advisor to help you select funds from a no-load assortment of various Vanguard funds?...I see the fees are only .21 on the expense ratios, and there are no loads, and no 12 B-1's.

What is the easiest way to compare apples to apples regarding performance (5 yrs, 10 yrs) and compare fees structures?

Is there a legal disclosure "page/ form" for each broker?

Anybody have a good forum?

 

[Wayward Son]

There are some no load mutuals available. American Century has some.

http://www.americancentury.com/index.jsp

There are others out there as well.

 

[mrjimboalaska]

Yes, you can find many no-load mutual funds in which to invest. Mix your Portfolio according to your short/long term needs, and manage them yourself.
I review all the time, but really only serious about it every 3-5 years, then compare return rates with comparable funds.
Investment Advisors will "model" your investments to your income/standard of living/time to retirement/comfortable level of "risk", why give them a 1-2% cut annually, when you can do it yourself.
Many companies offer a simple "model", check out Fidelity (i like), Franklin-Templeton, Vanguard (i like), T.R. Price, and American Century (i like), and USAA.
Oh, are you maxing JB's TSP contributions?

 

[Cacia]

Oh, are you maxing JB's TSP contributions?

what's that?

We both have Vanguard accounts...it returned 16% on the fund last year...I think the S/P fund.

Yes, I understand the no-load, I think. (I am curious about the USAA funds, cause they are a great bank...our insurance is about 300 less per vehicle per year than the next best thing I could get AND that is for 100/ 300 liabilty vs the standard 30 or whatever the norm for Hawaii is. 30K is about like being uninsured if you kill somebody....and thats all Hawaii requires.

What I want, is the best of both worlds. I am asking if I can hire a money guru/ adviser for fee for service (hourly) to help me optimize some stuff. Cause I have some things that area bit over my head. Pay him outright instead of a percentage....

Also, how do you know if you are generating tax consequences on stock sales? Look at the basis,... how?

Some of the international/emerging markets had huge returns last year, I missed the boat but would like to put 10 % in that this year. (not China)
That is one of the things I need to be advised on.--emerging markets are tricky.

Also, there are some private tuition tax shelters now...but they are new so I missed the boat on that too. I think it's only 2,500 per child, where as college is like 10 K a year. (Those are state funds)

HSA's are the big news of late. All that money if unused, rolls over year to year, compounding. AND can be used for long term health care when you are old ..TAX FREE! Beats giving it to an insurance company, the crooks.

It's time to grow up...I am trying to get serious about managing better.

But...HOW do you find a good independent financial adviser...because I get the feeling most of the GOOD ones are going to pimp you out to the big brokerage houses on the loaded funds.

That is basically my question.

 

[TeqP]

If you are looking for a one-time fee for an advisor, take a look at
http://www.cfp.net/
A CFP might be the way to go. The website has a search by zip code so maybe there is a CFP near you. Definitely stay away from loaded funds if you can. You can make the same returns on no load funds.

Try this site for selecting some mutual funds if you decide to go it alone.
http://personal.fidelity.com/research/funds/?bar=c
You just plug in your criteria and mutual funds that meet your criteria will pop up.
Also, morningstar has some good info on mutual funds.


Good luck.

 

[Cacia]

Thanks!

Yes, I don't understand why the load funds are so prevalent because they don't perform any better.....

TSP...Jimbo, to fully fund that...is it a percentage of income or a dollar amount?

 

[Charlie99]

Yes, I don't understand why the load funds are so prevalent because they don't perform any better.....

The brokers that sell them get a large portion of the fees. When someone named "Catherine" comes along, they'll point her towards those funds, hoping to make some easy bucks.

If a broker or financial planner steers you towards load funds, just walk away from them. They clearly put their interests far above yours.

You can do far, far worse than talking to the people at USAA. Good people. Well trained. Unlike the typical finanacial services company, the people at USAA will actually be trying to figure out what is right for YOU. I've been using them for a wide variety of services since 1971 and have been amazed at the level of service, and the knowledge and ability of even their lowest level customer service reps.

Your other good alternative is to find an independent financial planner, operating on a flat fee basis and do a one time "review and tuneup". Focus on understanding WHY he is advising various things with the aim of keeping track of such stuff on your own in the future.

A fairly common setup for financial planners is for them to manage your account at a company like Fidelity. They attempt to time the markets and move around back and forth between various mutual funds. The typical fee for this is 1 or 2% of total assets yearly. It's hard to justify the expense compared to the miniscule increase in return, if any, that these sort of guys manage to achieve.

Charlie Allen

 

[lamont]

w
Some of the international/emerging markets had huge returns last year, I missed the boat but would like to put 10 % in that this year. (not China)
That is one of the things I need to be advised on.--emerging markets are tricky.

some food for thought on emerging markets and financial advisors:

http://www.fool.com/investing/international/2007/04/14/forecast-worse-than-a-perfect-storm.aspx

 

[Meister481]

www.fool.com

Amazing resource for the lay person.

www.vanguard.com

I've got my kids' college funds, half my retirement and my money market account there. They have advisors you can talk to that will help you shape your financial future.

 

[Cacia]

Good people. Well trained. Unlike the typical finanacial services company, the people at USAA will actually be trying to figure out what is right for YOU.

I must say, I have gotten excellent advice from many of you...much in the form of PM's. Can't thank you enough. I have figured out quite a bit these past few weeks and have maxed out all the tax deffered stuff since Charlie pointed out that comes first. (I knew it, but was needing to be reminded again to attack that first)

In addition to the TSP (401 K for military) I came across the Savings Plan for hazardous combat zones which gaurantees 10% return even with tax free income. We had missed that, but are now "all over it". It's been around since VietNam and JB laughed that nobody had fallen all over themselves to tell him about it. What's this? Number five in "hazardous combat" and he never knew. Only good up to 10,000 per deployment to combat zones, but that would have meant about 1,000 (10% of 10K) per combat deployment so far..or 5 K which he missed.

Following is the information regarding the Savings Deposit Plan (SDP). I found this on MyPay, so I would assume it is up to date. You can find additional information at: http://usmilitary.about.com/cs/moneymatters/a/savings.htm and the actual DOD regulation can be found at

Of course the market has been returning better, but doubt it will this year if we stay in correction phase, and remember, this is readily available cash fund, if I understand it correctly.

Another surprise I had was getting an e-mail from someone claiming the "phase out" for Roth this year had a very narrow income requirement for eligibilty. Haven't had time to research what the phase out is all about.

Have you spoken to Charles (CPA) about this? The phase outs for single tax payors for Roth eligibility are as follows:

In order to qualify to make a Roth contribution, clients must meet certain income requirements. There are separate AGI limitations for each filing status, they are:
Filing Status Adjusted Gross Income (2007)
$99,000 - 114,000

I eliminated any loaded funds from the options plate since nobody has demonstrated to me a better return on a given benchmark load-fund vs the same benchmarked no loads.

So...for now, its Vanguard and USAA. I am phasing out the 1.25% guys over time and learning to read my statements. My head hurts.

Thanks again, it's kinda fun.

They have advisors you can talk to that will help you shape your financial future.

yes, I just got one there this Friday and set up the Roth and even funded it over the phone with him helping me on-line. Not many people available to help on "the big scramble" this close to the 15th, but they were fantastic. All these 1.25% guys with swanky offices haven't really done as much.

If the salaried guys at Vanguard are not getting a percentage of what they make for you, what is their incentive?...that's the only lingering question I have.

Oh...one more question I have is if you fund a Roth, you can't fund a regular IRA, can you? Because I have been sitting on that and only funded one, the Roth for 06. I heard it is going up to 5K next year.