I started working with a financial advisor in January of 2019. I can honestly say the experience was mostly positive. When I started working with him, I had no idea which retirement accounts I should prioritize or even what a Roth IRA was. He set me up on a path of success, and was a good guy who I feel like had good intentions. So let's discuss the good and the bad..

The good

  1. Gave me a personalized financial plan—with breakdown of my assets, expenses, future needs, social security, etc. Very detailed and eye opening to look at retirement for the first time and all of the necessary elements
  2. Was available for texts and calls pretty much 24/7. Wasn't married and didn't have kids so he made himself readily available to his clients without having to work through a receptionist or assistant to get on his calendar. He did not charge for these meetings
  3. Thoroughly explained different retirement accounts, the tax benefits, and order of prioritization
  4. Encouraged me to get excess money off of the sidelines (in savings) and into the market
  5. Taught me about the value of insurance
  6. Stressed setting a budget for fun

The bad

  1. 1.96% annual management fee for my assets in Roth IRA and brokerage account. This seemed excessive but I fell for the "he'll beat the market by a few percent every year so it evens out"
  2. Encouraged me to move my 401K assets to a BrokerageLink account that he would manage for 1.75% annual fee, when it was already invested well in a Vanguard Target Date Fund
  3. He also sold insurance policies and pushed an independent disability policy on me, and a very expensive and unnecessary Indexed Universal Life Insurance policy that I ended up cancelling and losing $2-3K on
  4. Had me invested in too many different funds, all with higher than average expense ratios. Made trades often (though I was not charged for these)
  5. When I decided to stop working with him, though he was very cordial and helpful, it took a lot longer than anticipated to get my money out from his management and over to Vanguard (almost 2 months) because even though I was under the impression he was managing my money, he always seemed to have to check with other people and go through others to get anything done
  6. Bonus (edited with more detail*): When I initially received and paid him for a financial plan, he asked to not discuss it over email and to send the money via Venmo so that his broker dealer wouldn't see the email communication and charge an extra 20% fee. This was kinda sketchy. I guess it was to save ME money and him from having to fill out paperwork.

I think overall from this experience I learned that financial advisors are great for consulting with, answering your questions and learning from, and even getting set up with a financial plan or recommendations, but this should be done for a flat consulting fee. Once they get to managing your money, they're just charging you a ton to do the same thing that robo-advisors or low-cost Target Date Funds are going to do. I also hated the conflict of interest of him selling me insurance (an expensive policy at that) when we really should have just stuck to my retirement accounts. Ending my relationship with him was bitter because we got along great and he was a trusted advisor for a year, but I feel much better lowering my costs and sticking to a simple, long term investing plan with Vanguard.

All of this being said, what are your experiences with a financial advisor, and what say you: love 'em or hate 'em?

submitted by /u/mrtommyberry

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