Looking at getting a financial planner

I had a gentleman stop by my door about a year ago wanting to just let me know that he had moved into the neighborhood and was a EdwardJones financial planner and would love to help me plan for my future. Well about every other month or so he called me back and, being a bit impressed with his perseverence and with a year already going by, I decided to meet with him.

My wife and I met with him tonight and the meeting went well. We discussed our overall financial status, and I gave him paperwork outlying our financial status and desires. He is looking over our information and we have another meeting scheduled for next tuesday, we did not discuss any specific products that he wanted to show us nor did he push any specific products.

What has me wondering about going with him as my financial planner is:

-Do I really need a financial planner or do I just need someone to handle my investments (currently I don't have any investments)

-The fees seem high to me, it was $40 for starting a fund and then he collected a small amount on monies earned in the fund-Is there anywhere online where I can see typical fees for the larger companies?

Thanks for the help - I have a minor in Insurance and really enjoy the financial scene, but I also appreciate those that have gone farther in their education to recieve their CFP and other designations.

-Most Likely- you do not need a financial planner if you can figure out on your own what you need...

1) Life insurance (Term unless you fall into a ~1-2% odd situation scenario) just to cover loss of income for remaining spouse / children.
2) Investments for your future...

For life insurance, just check out http://www.term4sale.com/ - good way to get a quick gut check for term life insurance costs...

For Investments, set up a roth ira account on Vanguard (or Fidelity). I prefer vanguard simply because I am a bit of an index fund lover. It looks like what your financial planner is attempting to sell you is a managed mutual fund. The vast majority of mutual funds do not beat a simple index. IE: it is more than likely that a managed "Small cap" fund that charges 1-3% each year will perform worst than an index fund that charges 0.1 - 0.25% per year. See http://www.fool.com/investing/mutual-funds/2009/02/25/index-funds-are-hard-to-beat.aspx . You can see, I hope, why I am in love with the index funds. Easiest way to do this is to call vanguard up and let them know you have questions and are considering opening an account - they should be able to talk to you about it over the phone. If you have no idea what you want to do, then getting an automatic age based index fund may not be the worst idea I have ever heard - while still getting you into the market much cheaper than a mutual fund.

As for "perseverence" guy - you can keep him if you like but I would steer clear of hungry "financial advisors" - why is he that hungry for business? "Maybe he is just new... you were new once right?!" - great. Let him go be new with someone else. Look out for your own family, not his.

That said, there are other things a good financial planner may help you with:
- Estate Planning: Not useful for you right now as you really have no 'estate'
- Trust Planning: Talk to a lawyer about setting one up in the case that you and your spouse both die leaving insurance money to children...
- Multitude of insurance offers: MOST of these are not suitable for MOST people in ALL periods of your life. IE: Statistically, investing in "long term care" insurance at age 25, for example, makes no sense. Investing in "long term disability" at 25 does. A good financial planner can make suggestions for you in this fashion but if you want my -personal opinion- on insurance you can have it: Term life is good. Variable life / whole life is not good (For most people - probably including you). Annuity is not good. Short term disability - not good. Long term disability - good. Long term care - good at age 55+. Cancer / Accidental Death / Supplemental Insurance - Leave it alone.

Thats about it... go see a professional when you need to, not when they get a bit hungry...

destarr said: I had a gentleman stop by my door about a year ago wanting to just let me know that he had moved into the neighborhood and was a EdwardJones financial planner and would love to help me plan for my future. Well about every other month or so he called me back and, being a bit impressed with his perseverence and with a year already going by, I decided to meet with him.

That's EdwardJones' MO.

destarr said: I had a gentleman stop by my door about a year ago wanting to just let me know that he had moved into the neighborhood and was a EdwardJones financial planner

I think its time for me to move to a new neighborhood. The only people who knock on my door to let me know they move into the neighborhood are child molesters.

"let me know that he had moved into the neighborhood" = "I am a door to door salesman and my area within 50 miles of your house is my responsibility"

sunspotzsz said: stay away from him!!!

If you need help, why don't you post your financial situation here?
The FW collectively beats 99.9% of financial planners.

Yes, to the stay away from him

No, to posting the financial situation here (need to go to flame free zone)

FW collectively beats down 99.9% of posters that make that kind of post

ThirdJoker said: JesseLivermore said: A financial planner can destroy your savings and wealth much, much faster than you can. Trust me.

The Golden Rule of other peoples' money trumps all in this arena.

Save yourself much grief and financial loss, assuming your IQ is greater than 80, and manage your own money.

I agree. Change your own oil, do your own tune ups, fix your own plumbing and landscape your backyard yourself as well. Oh, and make sure when you buy and sell your house that you are doing a "for sale by owner". Hey, for that matter, manage your own health care too.

You insinuate that most financial planners are competent and have no conflicts of interest.

If I'm correct in your assumptions, you are extremely naive or are a financial planner yourself, or close to a financial planner, IMO.

edit - By the way, I do change my own oil, fix household issues when I am able (most of the time), and would rarely use a realtor.

You seem like the kind of person who pays everyone to do everything for you, because it's sooooo darn hard!

delzy said: Tell him you are only interested in getting in on the ground floor of ponzi schemes.

Sanford, Madoff, our very own FW spotted Agape World, and countless others have killed the Ponzi 401(k) - at least for now.

destarr said: -Do I really need a financial planner or do I just need someone to handle my investments (currently I don't have any investments)

Since you don't have any investments, I'll only charge you $20 per month to handle your investments.

So far every financial planners that I know are sales persons.

My uncle's financial planner sold him worthless UBS auction rate securities and after everything start to unfold, the so-called financial planner could not be reached. He's lucky because at the end UBS bought the securities back due to the multiple AG investigations.

Edward Jones is a better company to work for (it's usually listed among the top 10-100 best places to work in America) than to invest with, and you really don't want to pay somebody just to pick mutual funds for you. I realize that financial planning involves a lot more than that, but with planners who work on commission, that probably means selling insurance as well.

If you decide on a fee-only planner, make sure the person really is fee-only by having him or her putting that in writing and not using weasel terms like "fee based". About a decade ago, the Washington Post surveyed at least 100 financial planners who claimed to be fee-only, but 90% of them actually worked on commission. A comprehensive fee-only plan is likely going to cost $3,000-$8,000 at the start.

Offer to pay him a fee based on ROR. State that ROR should be calculated based on any money paid. So (his 40 + brokerage fees + cost of stocks/items) offer him 1% for market 2% for 5% above market 3% or 10% ect. Also state that if he will gain finical via a 3rd party payment, he must disclose that to you in writing. Failure to do so will result in some sort of fine.

This way he can't simply sell you stocks he is trying to dump. At the same time, you time is freed up minimal cost.

I'm assuming this was a private party thing and did not involve his company directly. If it does involve his company so much for my idea.

jakemoney said: Slightly off topic, but I really don't like door to door salesmen. Whether they're selling vaccums or church or whatever, they are just plain annoying.

Yeah, but there are SO many fun ways to annoy Jehovah's Witnesses who come to your door.

I believe in G_d, but am not deeply religious in the organized sense. I think organized religion is poppycock.

I am very moral, I think.

But I'd love for the Jehova's Witnesses to stop their door to door policy. Instead of 'do unto others,' I wish the bible instructed 'do not do onto others as you wish not to be done unto.'

Didn't mean to turn this into a JW thread ...

What credentials has this guy given you that makes you think he'd be any better than you at managing your money? Obviously he can talk a good game as he went from "neighbor" to your potential financial planner, but can he really back it up? Don't fall for the sales pitch. Beware.

lray said: Ask to see his schedule D.

OP, this should be the first cut off point for you. Get your prospective FP Schedule D for last 10 years. If he consistently outperforms you, there may be a reason to engage him. If he does not, show him the door.

destarr said: I had a gentleman stop by my door about a year ago wanting to just let me know that he had moved into the neighborhood and was a EdwardJones financial planner and would love to help me plan for my future. Well about every other month or so he called me back and, being a bit impressed with his perseverence and with a year already going by, I decided to meet with him.

My wife and I met with him tonight and the meeting went well. We discussed our overall financial status, and I gave him paperwork outlying our financial status and desires. He is looking over our information and we have another meeting scheduled for next tuesday, we did not discuss any specific products that he wanted to show us nor did he push any specific products.

What has me wondering about going with him as my financial planner is:

-Do I really need a financial planner or do I just need someone to handle my investments (currently I don't have any investments)

-The fees seem high to me, it was $40 for starting a fund and then he collected a small amount on monies earned in the fund-Is there anywhere online where I can see typical fees for the larger companies?

Thanks for the help - I have a minor in Insurance and really enjoy the financial scene, but I also appreciate those that have gone farther in their education to recieve their CFP and other designations.

I'm going to tell you not to use him, but for a very different reason than everyone else. An Edward Jones door knocker who is new to your neighborhood is probably brand new to the business. He probably doesn't have a CFP nor any other designation. He probably just has his Series 7 and his insurance licenses. He is a product salesman and not a financial planner. I don't mean that as a negative comment. You just need to understand that.

Personally, I think that a quality financial advisor is very important. The problem is that it is very difficult to know if you have one. From 20 years of experience, I don't think that it makes any difference whether the advisor is making his money from commissions, fees, or a combination of the two. It needs to be disclosed and understood.

ppatin said: Educate yourself and do your own financial planning. This stuff isn't rocket science, there's no reason to pay someone else to do it for you.

Actually, hiring someone else do do this may make sense - if that person really is good.

The big question that's hard to answer financially, is: "why this and not that?" Why would you rather have this type of insurance instead of that type of insurance? Why a Roth instead of a standard IRA? Why an index fund instead of an industry-specific fund?

If you're starting out, why is superseded by "what is all this stuff?" Having a vague idea of all the investment vehicles out there takes a while...and figuring out why one is better/worse takes even more time.

So...talking to a pro might be worth it, but you shouldn't pay them - maybe you can just take their recommendations, research the recommendations, then go back and ask more questions?

A Random Walk Down Wall Street by Burton G. Malkiel
Common Sense Investing by John C. Bogle
Fooled By Randomness by by Nassim Nicholas Taleb
The Black Swan by Nassim Nicholas Taleb

Use the library, you pay for it anyway.

Never hire someone who walks off the street and knocks on your door. I doubt he even lives in your neighborhood, and is just very aggressive.

Why not take him for a ride, and have him wine you, dine you, and buy you some H&B. When it comes down to sign the papers, tell him to F off, you found a better deal.

What InsuranceExpert said.