What value does a financial advisor have? (Full Version)

All Forums >> [Life] >> Finances



Message

mrtigger -> What value does a financial advisor have? (9/20/2008 6:31:21 PM)

The other evening a young guy was going door to door in my neighborhood. It turned out he was a financial advisor looking for new clients. That was a bit odd - (lots of pesty magazine salespersons try to sell me stuff but no finance guys before now). But he was very young and I guess was just trying to get started in the job.

I don't think I really need an advisor. I've done ok with me making my own financial/investment decisions. But his visit prompted me to wonder what do financial advisors actually do? The pamphlet he left me didn't really give details of what specifically a financial advisor does. It seemed to empasize annuities which at this point in my life (I'm 50 & still working) I think is a bit premature.

Why would I use a financial advisor (who will presumably charge fees for his services) vs sticking my money into a stock index fund and sitting on it? What services could an financial advisor provide that would make them worth the money and time I would spend on one?

I do think he was legitimate... My deception sensors did not trigger when I was talking to him and he was with a nationally known investment company. I won't say the company name but I'm sure you all have heard of them. So, I don't think he is a scammer.

Some of you are financial advisors I know so, if you like, tell me why I might want to use one.



LCannon -> RE: What value does a financial advisor have? (9/20/2008 7:01:39 PM)

Probably if one has a lack time, inclination or 'more money then sense'; it's best to have some type of support. My broker is my 'financial adviser'(if any)although I do(direct)most of the shuffling. The only time he 'advises'(alerts)me is in crisis or buying opportunity.



metoo -> RE: What value does a financial advisor have? (9/20/2008 10:59:38 PM)

Anyone can call themselves a "financial advisor". Some of them are really just selling something: annuities, insurance, load mutual funds or other products. It's important to understand how they are being paid and what education they have.

Some financial advisors have special training and have passed tests such as CFP (Certified Financial Planner), PFS (Personal Financial Specialist...they are already a CPA and take additional training to get this designation), CLU (Chartered Life Underwriter...a life insurance sales person with additional training), and CFA (Chartered Financial Analyst) are the primary ones that IMO really mean something. Lots of financial services companies give their employees titles and "initials" that may or may not mean much.

Financial Advisors are typically paid one of three ways: Fee-Only, Commissions and a combination of fees and commissions. I believe it is best to have someone is who fee-only. You pay a fee for their advice. Because they do not have anything to sell you they should be able to be objective. If someone is working fully or partially on commissions they may recommend something that gives them a higher commission when it may not be the best thing for you or there may be something else that is less expensive that is just as suitable for you.

Some people are fine with a "do-it-yourself" approach to investing an planning for their financial future. Some people may be mostly "do-it-yourself" and may have a professional "check-up" every 10 years and a bit more frequently as they get close to retirement. Some people do not have any desire to deal with financial issues themselves want to delegate it so they pay someone to help them. Some people may like to deal with finances but don't have or want to spend the time doing it so they pay someone help them. Some people may work on their own cars or may paint their own house because they know how to do it and enjoy it while others prefer to pay someone else to do these things. It's the same with finances.



coolfamily6 -> RE: What value does a financial advisor have? (9/23/2008 1:10:32 PM)

We found our financial advisor this way. We had just moved into our first home and he was doing the door to door introduction of himself because he was new in the community. DH took his card, called the parent company and checked him out with the local Chamber of Commerce. We hired him and he was our advisor until he suddenly passed away two years ago, there was a time when we were earning and others weren't. My MIL who did our taxes used to tell us we did a great job finding him.

We do pay a slight fee for the services they provide: less than $50 per account we hold with the company. We have money market accts, traditional IRA'a and ROTH's with the company.



NoShow -> RE: What value does a financial advisor have? (9/23/2008 1:45:59 PM)

I think that for many people, it's like LCannon said, self-education isn't a desirable route to go. Add to that most people's lack of willingness to have a personal financial plan and you find a niche for a FP to fill.

Personally, almost all of the FP I've met are more "sales" people, than "financial" people, regardless of what designation they hold.



allisonbrett -> RE: What value does a financial advisor have? (9/23/2008 3:33:28 PM)

My family and I have financial planners (CFP who are highly educated and certified) but that is different from an advisor.

Primerica (I think that's the name) is a company that "trains" people to be financial advisors. Basically through selling insurance, etc. From people I have talked to in the past that have signed on with them, it's a training program to get people to pass insurance exams and be licensed insurance salesman. I can see them going door to door. We've had them call us and stop by our business trying to "sell" us advice.



Dancre -> RE: What value does a financial advisor have? (9/23/2008 6:25:57 PM)

i work with my Financial Advisor and he gave me GREAT advice on my 401K and my savings account. It wouldn't hurt to look into on.



Page: [1]



Forum Software © ASPPlayground.NET Advanced Edition 2.5 ANSI