ppatin said:InsuranceExpert said:ppatin said:IMO it's a lot easier for a typical middle class American to handle their own finances than it is to repair a car. If I could find a financial professional who had a consistent ability to get above average returns then sure I'd pay for his services, the problem is that there's no reliable way to find such a person.

This misunderstanding is part of the problem. The job of a money manager may be to get above average returns. That is not the job of a fiancial advisor. The job of a financial advisor is to help a client achieve their financial goals. Sometimes, this means investing in such a way that will typically get below average returns.

Ex. John is retired and is fairly financially comfortable. His only goal is to not run out of money. If his investments just get a positive rate of return, he should be able to do this easily. His investments are 100% low cost index funds. A good financial advisor is going to get John to invest much more conservatively, thus making it very likely that he will get below average returns, but at the same time, drastically increasing his odds of hitting his financial goal.

Fair enough, but what you've described isn't a particularly complicated concept. A few good books on personal finance would allow "John" to do all that for himself.
I understand what you're saying, but different people simply value their time differently. This applies both to working time (there's probably a point at which you'd actually save money by having someone else assume the financial advisor role) and leisure time (harder to quantify, but many consider their leisure time priceless ). And this doesn't even matter if one's financial situation is so complicated that it would really require the services of an expert.

brinnan said:How do you guys feel about using a financial planner like this to buy municipal bonds? Are there better alternatives?

Go to Vanguard.com and look at the tax-exempt bond funds. No need to get your own broker. Are you considering buying individual muni's?

If nothing else, I have to admire your imagination. I'm looking for anything that remotely even hints of rage in any of my posts. The "snide" remark was a serious question because I was failing and am still failing to see how you had trouble understanding what I said and a Venn diagram as drawn made it crystal clear.

My guess is that you have the presumption that all sales people are bad and fighting against the world, so you find these traits when they don't exist.

Xane said: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.

What you suggest is very much against the law.

ThirdJoker said:Xane said: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.

What you suggest is very much against the law.

Really? What is the illegal part? I know the managers of hedge funds and private equity funds routinely collect 20% of the profits as part of their fee. Do stock brokers operate under a different set of rules?

brinnan said:Yes. I thought I knew about investing, but after talking to one of the Edward Jones guys, it turns out there is so much more to know. (The more you know, the more you find you really don't know) I have a Fidelity account and I checked there last night. No rates were as good as what he offered. I'll check Vanguard.Because there's no such thing as a free lunch, either somebody has to pay for the higher rates offered by Jones and the cost of their salesman, or the portfolio is invested in higher risk securities (but the insurance co. may cover that risk).

Also beware of the practice of creating a dependency, where some salesmen and their shills (teachers of personal finance short courses at community colleges) toss out a lot of terminology to make finance seem more complex than it has to be so that the customer thinks that he or she needs the salesman. There was even a person who went around the country and held seminars where he taught financial salesmen the art of creating a dependency.

larrymoencurly said:InsuranceExpert said:If nothing else, I have to admire your imagination. I'm looking for anything that remotely even hints of rage in any of my posts. The "snide" remark was a serious question because I was failing and am still failing to see how you had trouble understanding what I said and a Venn diagram as drawn made it crystal clear.

My guess is that you have the presumption that all sales people are bad and fighting against the world, so you find these traits when they don't exist.Your obsession with this thread, for one.

You may have meant:

(financial advice) ⊃ (investment advice)

but when you said, "It's very easy to confuse investment advice with financial advice. They aren't the same thing", you actually said:

(investment advice) ∧ (financial advice) = 0

Can you translate this into English?

germanpope said:InsuranceExpert said:If nothing else, I have to admire your imagination. I'm looking for anything that remotely even hints of rage in any of my posts. The "snide" remark was a serious question because I was failing and am still failing to see how you had trouble understanding what I said and a Venn diagram as drawn made it crystal clear.

My guess is that you have the presumption that all sales people are bad and fighting against the world, so you find these traits when they don't exist.

I am sure you realize that the presumption against Sales People like yourself is much stronger in a forum like this than in the greater world

there are a lot of reasons to for paying a premium for extra service and hand holding and many are willing to pay that premium

one example may the wealthy widow that is being absolutely gouged by his bank for fees --- but that widow is useless without the constant hand holding of the trust department

the original topic is whether the Edward Jones guy is worth sending your money too --- well, in most cases from a FWF perspective --- the answer is a resounding NO

OK German, but here is my problem:

Let me preface this by saying I have no idea if the EJ is good or bad. I am sure some EJ are terrible and others are good. There is no absolute guage to measure that unfortunately.

You say FWF people don't need or should not use a financial planner. I compleltely disagree and here is why. If you look at the portfolios that many here have, along with many of the portfolios of some of the people on bogleheads and look at the numbers you can plainly see that their returns are not in line with the risk they take. They are not seeing returns that they shoudl with the amount of risk they are taking or they are seeing returns that are in line with the market, but edxposing themselves to more risk than necessary. Very dangerous IMO. Now I can absolutely agree that there are a few (maybe 5%, but probably less) here who know how to structure a proper portfolio and are able to either beat market returns or obtain market returns with a proper amount fo risk, but that is far and few between.

The second issue I have is that the notion that sales people are bad. 99% of the most successful people are the best sales people. The best lawyers are the best sales people. they either sell a jury, a company, a judge, etc. The most successful doctors are the best sales people. They know how to talk to their patients, the hospitals, etc. The best engineers are the best sales people. They can sell their projects, etc. Find me a successful person in their industry and 99% of the time they are the best sales person. What % of their job is sales may differ. For IE 90% of his job may be sales, for me it is about 25-30%, and for you it may be 10% (or whatever), but either way most people are sales people, at least most successful people

mikef07 said:You say FWF people don't need or should not use a financial planner. I compleltely disagree and here is why. If you look at the portfolios that many here have, along with many of the portfolios of some of the people on bogleheads and look at the numbers you can plainly see that their returns are not in line with the risk they take. They are not seeing returns that they shoudl with the amount of risk they are taking or they are seeing returns that are in line with the market, but edxposing themselves to more risk than necessary. Very dangerous IMO. Now I can absolutely agree that there are a few (maybe 5%, but probably less) here who know how to structure a proper portfolio and are able to either beat market returns or obtain market returns with a proper amount fo risk, but that is far and few between.
I don't understand. You're saying that dumping all your money in the total stock market index won't give you returns in line with the market or with too much risk?

FuzzyWombat said:mikef07 said:You say FWF people don't need or should not use a financial planner. I compleltely disagree and here is why. If you look at the portfolios that many here have, along with many of the portfolios of some of the people on bogleheads and look at the numbers you can plainly see that their returns are not in line with the risk they take. They are not seeing returns that they shoudl with the amount of risk they are taking or they are seeing returns that are in line with the market, but edxposing themselves to more risk than necessary. Very dangerous IMO. Now I can absolutely agree that there are a few (maybe 5%, but probably less) here who know how to structure a proper portfolio and are able to either beat market returns or obtain market returns with a proper amount fo risk, but that is far and few between.
I don't understand. You're saying that dumping all your money in the total stock market index won't give you returns in line with the market or with too much risk?

No that would be fine if you just wanted to be in the market and did not want to diversify, but what is a portfolio and what is an investor trying to do?

They are trying to minimize risk by diversifying. 10 year returns on an Total Stock Market index fund are around -1.34% at a specific risk level. When I look at people's portfolios here they are diversifying, but are either not getting above the total stock market return, or they are getting barely higher with significantly more risk. If you are just decent (not even good) at putting together a portfolio you should have at a minimum seen returns of about 4.5% over 10 years with significantly less risk than by just having a total stock market fund . IF you are good you would have seen from 5-6% with risk levels pretty much the same as the total stock market fund.