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So I use personal capital to just keep my investments in one place and use it as an X-Ray for what I'm invested in. It's nice. I plan everything. Well I get this email about a free CFP consultation. I say fine I"ll give them an hour. The first meeting was a 30 minute sales pitch, then a week late for a "specialized" financial plan. So today I listened for an hour about why index funds are bad. Why I can't do it myself. Why I should pay them 0.89% to manage my investments.
Here's what they said. They actively help keep the portfolio balanced by selling high and buying low keeping all 90 stocks they pick in proper balance. This way there is no need for VTI or any other index fund I own. I am TOO heavily invested in index funds and bonds for my age and aggressive risk tolerance. They also feel that I should put bonds and stuff into my IRA and not invest in municipal bonds. I am in not the highest bracket that municipal bonds are not good investments. She also did not know what an I-bond was when I told her I already bought I-bonds. She also said I am keeping too much in cash right now and that I need to invest in stocks because I am too heavily invested in technology 23% because I have too much VTI. That means my risk exposure is too much. That owning index funds means I can't tax loss harvest and I have to pay too much on dividends.
Their recommendation get this was 90 stocks they actively manage and tell me when to buy and sell and it's out of balance. Then for small caps they have the NERVE to suggest using a small cap index fund because they aren't familiar enough with small stocks. SIGH. They also use index funds to invest in internationally which I already do owning both emerging markets international, index international, and international bonds. I also have REIT ETF sectors and I have a UCO which we lost a bundle a few years ago.
So she said I am obviously not familiar with how to tax allocate. I told her that based on my calculations on our portfolio I am efficiently investing with risk in Roth, best choices for DH's 401k (lowest cost and best mutual funds), and I am buying and holding once a year in our taxable account. I also have i-bonds. Right now most of our dividends are qualified. So 15% so WTF is she talking about why I would put bonds into a Roth IRA or any IRA we hold when you want things with explosive growth? Plus we plan on converting money upon retirement before age 70.5? I sat there stunned that this woman (who by the way didn't even have CFP) had the nerve to tell me I don't understand tax loss harvesting, when I asked her if she understood what a qualified dividend was and she couldn't explain it.
I sat there so stunned. I was like look tell the cost. She finally said 0.89% which is small fee for such large gains. I told her you can beat my gains using index funds and my balanced portfolio with proper tax balance by 1%? I doubt it. Maybe to someone who invests in CDs or nothing. But I was horrified that this is what most people sell. I know this is what is being sold to my parents. I mean I told my mom to buy some i-bonds. Her financial advisor had to go and "research" such things. Yep.
Apparently when I told her I didn't want help evaluating my portfolio she insisted I needed advice. When I told her I had a 10 year plan but more like 16 year plan she didn't listen. 2034 puts us at 56 and 55 for DH and I and both kids are 22 and 25 and out of college. Now my plan puts us at 2028 being done but I know my DH hesitates with college looming big at that point. So we'll take it OMY at that point.
But the suggestions that they could use Data to properly balance and track our 90 stocks and keep 'buying' and holding just selling stocks to rebalance was CRAZY. The tax implications, the costs of buying and selling.
Has anyone else thought this? I was thinking if I posted in bogelheads it would be horrifying this experience.
Here's what they said. They actively help keep the portfolio balanced by selling high and buying low keeping all 90 stocks they pick in proper balance. This way there is no need for VTI or any other index fund I own. I am TOO heavily invested in index funds and bonds for my age and aggressive risk tolerance. They also feel that I should put bonds and stuff into my IRA and not invest in municipal bonds. I am in not the highest bracket that municipal bonds are not good investments. She also did not know what an I-bond was when I told her I already bought I-bonds. She also said I am keeping too much in cash right now and that I need to invest in stocks because I am too heavily invested in technology 23% because I have too much VTI. That means my risk exposure is too much. That owning index funds means I can't tax loss harvest and I have to pay too much on dividends.
Their recommendation get this was 90 stocks they actively manage and tell me when to buy and sell and it's out of balance. Then for small caps they have the NERVE to suggest using a small cap index fund because they aren't familiar enough with small stocks. SIGH. They also use index funds to invest in internationally which I already do owning both emerging markets international, index international, and international bonds. I also have REIT ETF sectors and I have a UCO which we lost a bundle a few years ago.
So she said I am obviously not familiar with how to tax allocate. I told her that based on my calculations on our portfolio I am efficiently investing with risk in Roth, best choices for DH's 401k (lowest cost and best mutual funds), and I am buying and holding once a year in our taxable account. I also have i-bonds. Right now most of our dividends are qualified. So 15% so WTF is she talking about why I would put bonds into a Roth IRA or any IRA we hold when you want things with explosive growth? Plus we plan on converting money upon retirement before age 70.5? I sat there stunned that this woman (who by the way didn't even have CFP) had the nerve to tell me I don't understand tax loss harvesting, when I asked her if she understood what a qualified dividend was and she couldn't explain it.
I sat there so stunned. I was like look tell the cost. She finally said 0.89% which is small fee for such large gains. I told her you can beat my gains using index funds and my balanced portfolio with proper tax balance by 1%? I doubt it. Maybe to someone who invests in CDs or nothing. But I was horrified that this is what most people sell. I know this is what is being sold to my parents. I mean I told my mom to buy some i-bonds. Her financial advisor had to go and "research" such things. Yep.
Apparently when I told her I didn't want help evaluating my portfolio she insisted I needed advice. When I told her I had a 10 year plan but more like 16 year plan she didn't listen. 2034 puts us at 56 and 55 for DH and I and both kids are 22 and 25 and out of college. Now my plan puts us at 2028 being done but I know my DH hesitates with college looming big at that point. So we'll take it OMY at that point.
But the suggestions that they could use Data to properly balance and track our 90 stocks and keep 'buying' and holding just selling stocks to rebalance was CRAZY. The tax implications, the costs of buying and selling.
Has anyone else thought this? I was thinking if I posted in bogelheads it would be horrifying this experience.
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