Do you have a "Trusted Advisor"?

[am_vanquish]

Every so often I like to re-visit Thomas Stanley's The Millionaire Next Door. I'm reading it now and he states that high-wealth/affluent individuals (defined as big savers, not spenders) often have an advisor whom they trust for financial advice (CPA, financial planner, estate lawyer, etc). The only non-financial example he gives is a minister. His book even states "Another correlate of wealth accumulation is employment of a CPA, not just to do taxes but also to provide various kinds of investmnet advice.

I'm curious how many people here have such a relationship with a "finance professional." I get the impression that most people here are do-it-yourself types, but you all remind me of Stanley's "average millionaire."

[snafu]

The banks in Canada have a group of salaried, Certified Financial Planners [CFP] on staff for those of us who self manage our accounts. We can call/visit to discuss our portfolio, major purchases, investment options/products etc. They hold our hand during tough down drafts and do their best to talk us out of selling low and buying high.

We have been given good advice but it is up to us to follow their suggestion. I have regretted not following the advice I asked for! We have been using the same CFP for several years who does an annual review of our holdings. I know the 2nd Planner well because he was the Manager at the Bank [branch] that did our office payroll. He is much happier as a CFP and I have the impression he makes more money.

[MonkeyMama]

[QUOTE=am_vanquish;251473]"Another correlate of wealth accumulation is employment of a CPA, not just to do taxes but also to provide various kinds of investmnet advice.

Um, excellent question.

&, um, TERRIBLE advice from Stanley.

I am a CPA. So I do not have to hire people for tax advice (nice perk)! But I Cringed reading that statement. CPAs do not have any investment training, and it is usually a conflict of interest to have a CPA who recommends investments.

My own profession aside, I have a lot of real life "Millionaire NExt Door" mentors - my parents and boss being the main ones that come to mind.

1 - Millionaires Next Door tend to do their own taxes. I would recommend farming it out if you have a complex tax situation, or if you just hate numbers and rather poke a sharp stick in your eye than do your own taxes. In general, I would recommend a non-CPA tax-preparer (cheaper). CPAs come in when it comes to even more complex taxes. I would say we are a waste of money for the average individual. Though there are certainly CPAs who only do "Easy" taxes, and charge accordingly. But there are plenty of excellent tax advisors who are not CPAs, also.

2 - Investments - DIY all the way. I think the advent of All-in-One Retirement funds, and index funds makes this moreso in this day and age. I think not only is there a lot of distrust and bad experience with investment advisors, BUT, every penny counts, and you can save a lot going it alone. In general, this is not penny wise/pound foolish. My spouse had an account with a big broker, and the fees were just insane. I finally convinced him to drop the guy a few years back. Ugh! We do MUCH better on our own. But, that being said, there are good investment advisors out there. They are just really hard to find.

3 - Estate Lawyer/Legal service - "Millionaire NExt Door" types do not go cheap when it comes to legal fees. I think most people think, "Oh - it's so easy to do my own will online," etc., etc. In my line of business, I see all the time when the cheap legal documents go bad. The thing, is you aren't going to know you royally screwed up because you will be dead and your heirs will be left to deal with it. A good estate lawyer is worth every penny, if you care about your heirs. My mentors always hire excellent legal counsel when it is needed, & hire good estate lawyers to get their affairs in order.

Everyone will have different opinions, but this is a pretty standard model for the millionaire next door types that *I* know. #3 is what I learned fro my mentors, but hits home in my line of work - I have seen some real legal messes.

[Ima saver]

I have always been a do it yourselfer! When an office of Edward Jones came to town, I used them to make a few stock purchases. I found that I knew a lot more about investing in mutual funds than the investment advisor that ran the office.

[am_vanquish]

Um, excellent question.

&, um, TERRIBLE advice from Stanley.

I am a CPA. So I do not have to hire people for tax advice (nice perk)! But I Cringed reading that statement. CPAs do not have any investment training, and it is usually a conflict of interest to have a CPA who recommends investments.

Maybe the quote I provided was a bit misleading --- Stanley's point was that accountants are a great resource for referrals. He suggested that most wealthy people ask their accountant to refer them to a good financial planner, investment advisor, estate lawyer, etc. This was also in a chapter focusing on how wealthy people like to minimize their tax burden, so CPAs were front & center.

1 - Millionaires Next Door tend to do their own taxes. I would recommend farming it out if you have a complex tax situation, or if you just hate numbers and rather poke a sharp stick in your eye than do your own taxes. In general, I would recommend a non-CPA tax-preparer (cheaper). CPAs come in when it comes to even more complex taxes. I would say we are a waste of money for the average individual. Though there are certainly CPAs who only do "Easy" taxes, and charge accordingly. But there are plenty of excellent tax advisors who are not CPAs, also.

I think there might be some selection bias here in that most of Stanley's examples are entrepeneurs/business-owners ... which would qualify them for "complex taxes" if they have a CPA to do the taxes for their business. This is the case for my personal mentor (FIL - owns his own company & talks to his CPA nearly every month for the past 15 years). I also get the impression that there's a smaller concentration of self-employed wealth-accumulators on this board than there are in Stanley's studies.

[am_vanquish]

I have always been a do it yourselfer! When an office of Edward Jones came to town, I used them to make a few stock purchases. I found that I knew a lot more about investing in mutual funds than the investment advisor that ran the office.

DW's concern is that we're not getting "objective guidance." The only people we really talk to about investing & long-term planning are her parents. Then we'll discuss real broad-based stuff with few details in social settings with co-workers/friends. Then there's the helpful people here at SA! She's looking for more of a "financial planner" than an "investment advisor" ... but I just don't think she realizes that they can't do a lot that we can't do ourselves.

[elessar78]

No. Wish I did though. This forum is about as close at it comes. I'm a bit iffy when it comes to getting advice from family. Everyone brings their own life experiences and goals to it and cannot seem to empathize with what I'm trying to do. I take lessons from their financial lives, because some are admirable but when it comes to specific questions I find them "not what I'm looking for".

Most of my friends "don't get it" and close family, well, finances seem too personal to share with them.

[disneysteve]

I use a CPA for taxes. I know that is something many do themselves but between both our jobs, self-employment income from ebay, medical surveys and advisory panels, investment income, various deductions and all, I feel much more comfortable paying a professional to make sure I don't miss anything.

I don't use anyone for investment advice. More accurately, I don't use one individual with whom I meet in person. I use lots of professionals for investment advice but I access their information through Money, Kiplinger's, Smart Money and various websites. And, of course, I use the many knowledgeable non-professionals here at SA.

[Ima saver]

I think that is a problem. Money seems to be a taboo subject to talk about. That is why I like this forum.

[elessar78]

I think it's also problematic for me because I'm a bit of geek when it comes to this stuff and I read A LOT on the subject. While I know I still have tons to learn, I don't trust the average lay man to have studied enough that I can trust their advice. Even with professional advisors—how do I know that they actually know their stuff? I went to college with a lot of Finance majors that were dummies. Fun drinking buddies, but not really reliable.

Most financial advisors/gurus I've met were a little too "polished" for my tastes. They came across more as salesmen than actually concerned with making me money.

Stealing a "page" from Stanley— if this guy knew so much about $$, why does he seem to waste so much on "symbols of wealth"? Granted they have to play "the game" and perception is, unfortunately, reality but it makes me question their judgment in either case.

[feh]

We've always handled things by ourselves, but our assets have grown to the point where I'm ready to bring in an expert. Sometime in the next couple months, we'll be sitting down w/ an investment advisor. We're reaching the home stretch (10-15 years until retirement), and I don't want to screw things up at this point.

[disneysteve]

We've always handled things by ourselves, but our assets have grown to the point where I'm ready to bring in an expert. Sometime in the next couple months, we'll be sitting down w/ an investment advisor. We're reaching the home stretch (10-15 years until retirement), and I don't want to screw things up at this point.

I'm not quite there yet but I anticipate doing the same when I'm about 10 years out from retirement. My cousin, who is retiring in May, did that about 5-7 years ago just to have a pro look over everything and tweak things here and there. I don't want to turn over management to anyone but I wouldn't mind sitting down and laying it all on the table and getting a second opinion.

[ceejay74]

Ugh, I have really got to get going on finding some experts. I just wish I knew where to start. (I'm one of those people who has very complicated scenarios, so even though I don't have much money to work with yet, I need to do my planning and self-education on the front end or else I might end up making some costly mistakes.)

Thank you for starting this thread. I think it was the kick in the pants I needed. I'm just going to start calling around for starters, I think.

[feh]

I'm not quite there yet but I anticipate doing the same when I'm about 10 years out from retirement. My cousin, who is retiring in May, did that about 5-7 years ago just to have a pro look over everything and tweak things here and there. I don't want to turn over management to anyone but I wouldn't mind sitting down and laying it all on the table and getting a second opinion.

That's the approach we're taking also. The advisor is w/ RW Baird, and they can either give you advice, or manage your portfolio for you. I don't want the latter.

[sandrark]

Nope, no advisors. My brother is a sr. VP with Fidelity, and quite passionate about the "helpful service" aspect of his profession. But he deals almost entirely with high net-worth people, and thus his advice is not what I'm interested in.

I don't need an annuity since we've not yet maxed out all pre-tax investing. I'm not interested in single stocks. I prefer simple index stocks, asset allocation, and annual rebalancing.

Ironically enough, since I'm much more conservative in general, DH and I seem to be doing much better financially than my brother right now.

I'm pretty sure he'll be a millionaire by 50. But so will we.

Sandi