As a college student I remember going to see a fee only financial adviser with my mom. It left a bad taste in my mouth. The financial adviser had my mom in a multi-year Jackson National Life annuity and actively managed mutual funds that were front-loaded (fee charged hen purchased).
As I got more life experience, I learned about the efficient market hypothesis and therefore learned that indexing makes the most sense. Buying and holding for the long term. I came to the conclusion that a Vanguard-type index fund or ETF is a wise choice; or, arguably a dozen or two of diversified stocks.
And I also came to the conclusion that the financial manager my mom used only offered what he offered because: 1) He could only offer certain financial products through his organization, and they were not the right ones (he was independent but worked through LPL); 2) Multi-year annuities can "lock-in" the customer--he could keep getting his fee because she could not get out--there was a financial penalty to get out of the annuity too early. 3) Maybe he thought that if we knew that all we had to do was index through Vanguard maybe he would worry that we could figure it out on our own and no longer need his services.
But what I have also found out is that even investing as simple as index funds is outside the grasp or interest of some people. I have aunts, uncles, and friends who are clueless about these funds, how to allocate based on their age, etc. I can see myself being a fee only financial adviser who actually looks first for clients' interest. I could in no way feel good about myself selling financial products that I would never buy for myself.
I did some searching online and there are some fee-only financial advisers that simply index and allocate for the clients without long-term commitments that are common to annuities. I also imagine it will be harder going this route to make money but I was to be honest and ethical.
If I go this route, how will I get my management fee? I know some fee-based planners bill the clients quarterly for arrears based on assets under management, although I would prefer to have it automatically withdrawn somehow--is that possible? Is fee-based financial planning using an indexed approach viable as a career? Thoughts? By the way I can't stand tax and want to avoid that area as much as possible and stick with investing--I would refer to a CPA.
Submitted August 25, 2018 at 12:41PM by Justsomeone82 https://ift.tt/2BNaQWi
