mike734

I'm considering using a CFP with a great deal of experience to manage my "wealth" to prepare for retirement. He will act as a fiduciary and provide financial education in addition to investment management and peace of mind for me and my family. Like a lot of money managers he will charge 1% of money under management for his services.

Do any of you do this and what do you think so far?

Columbusohio

Maybe I am just your run of the mill middled aged loser but why cant you manage it yourself in a no load índex fund? Is your guy going to beat the market?

Packrat

I think its a good idea to get investment advice. You go to a lawyer when you need legal advice. You go to a doctor when you're sick.

It always amazed me how many pilots think they're financial savants. However, I've seen many of the same guys lose 50% of their 401k when the market went south.

Check your PMs.

flap

If you do not have the desire to do it yourself, then professional help is a great idea.

If you would like to do it yourself, then you can always hire a CFP for hourly consultation a few times a year at a fraction of the 1% cost.

Spend as much time doing your research on the advisor as you would any major purchase or medical procedure. Know what the advisor can and cannot do within your accounts. It is fine to put limits on the advisor so that you don't wake up one day and find that your assets have been invested with considerable more risk than you are were aware and you have sustained significant losses.

All advisors have potential conflicts. If you have the option of a pension with annuity vs lump sum, and the advisor recommends lump sum, is that because that is the best option or because if you take the lump sum the advisor will get 1% of that amount annually?

I am a big fan of hiring help on an hourly basis. Get advice on tax strategies,insurance, long term care, Social Security, asset allocation and risk tolerance. If you have substantial assets under management you may be paying $10,000-$20,000 a year for the handholding the advisor provides.

If it lets you sleep better at night, then it's worth it. If you feel that may be a bit too expensive, there are other options.

Don't know your situation, but if you are an ALPA member, Schwab has an arrangement with ALPA to provide a free consultation for an overall financial checkup. Just mention you are an ALPA pilot and they will get you set up.

This is a good first step to check for retirement readiness, and if nothing else will give you a second opinion on your financial health.

mike734

I'm more interested in reducing losses in a down turn. I've been pretty good at picking funds and stocks but lousy at rebalancing and selling.

Rama

Bloomberg radio has a lot of good shows. Different finance guys, retirement, social security planning how and why things happen in the market etc.

bedrock

Definitely vet this person as much as possible. I agree that it may be better to pay someone an hourly fee, because there would be no conflict of interest; at least you should do this before agreeing to any long term asset mgmt. deal.

You should make sure they have a hedge strategy for your core assets, that is the assets you don't want to risk too much. If you designate a certain part of your investment toward higher returns, i.e. riskier investments, what is the amt you are willing to lose as a % or dollar amt? Does the mgr. use options? Is there a plan for if the mkt. downturns or crashes, i.e. short sell options? Does the mgr offer advice on investments outside of the stock mkt, such as real estate, precious metals, etc? These are a few things I can think of off the bat.

mike734

I would not sign an "agreement" other than making him sign a fiduciary agreement. As for options, they have no place in my core, I agree. And, yes, he is available for advice on all things financial with respect to retirement planning and wealth management. Do you have any advice on how to vet other than a simple web check?

satpak77

1. So isn't everybody

2. Don't mistake a bull market for your own brains and market savvy-ness

mike734

1. Yes, nobody likes losses. But many or most just watch the price drop and fail to pull the trigger and sell.

2. I'm not talking about my ability to buy an index fund and watch it go up and think I'm a genius.

Thanks for playing though.